1. For the 10 years up to now, Cement price of Vietnam is always lowest in the ASEAN region, keeping at 50USD/T or even below 50USD/T, while ASEAN cement price is in average of from 65 to 75 USD/T .
Cement industry is regulated by the Government and its price and quantity were always kept at stable level to curb inflation and to stabilize macro-economy. From 2008 to now, the price of cement increased by only about 30%, while coal prices have been increased 4 times, electricity price and diesel oil is being increased continuously.
2. From late 2010 until now, the cement industry would not exist if the selling price was not adjusted by the pressure of rising prices of coal, electricity, oil, exchange rate and interest rate.
3. The increase of coal, electricity, fuel price in recent time:
- Gasoline, oil price rose nearly 18%
- Electricity price rose 15,3%
- Coal is planed to increase 40%
And these pushed up the cement production price increased from 10 to 15%.Total expenses for fuels in cement production always account for 45 to 50% of the total production expenses.
4. The increase of the exchange rate USD / VND to 9.3% and interest rates above 20% per year has caused great difficulties for cement producers, specially for the new cement producers.
For example, in 2011: VICEM expected to pay for loan of 3,200 billion VND, Cam Pha Cement is expected to pay for bank loan of 800 billion VND.
The increase of the exchange rate USD / VND and interest rate will make price of cement increasing from 12 to 15%. Therefore, factors such as price of electricity, coal, petroleum, exchange rate and the interest rate will make the price of cement increased from 22 to 30%.
If cement producers keep selling at the unchanged price, all most of them will loose in 2011. Therefore, cement producers have to increase to cover up the increased price of inputs. However, salary fof labors is not increased while CPI has been highly increased.
More seriously is that together with the rising price of inputs, the electricity and coal producers only commit to supply up to 70% of electricity and coal demand used for cement production. Moreover, the power supply unstable will lead to stoping clinker kiln, causing much loss for the cement producers and shortage of cement for construction works of about 30%.
(Source: Vietnam Cement association)