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Along with the pressure of raising electricity prices, fuel
prices, adjusting the VND/USD exchange rate, price of coal sold to cement
households has risen by 40% since the beginning of April, which has added a greater
burden to cement enterprises.
According to Mr. Nguyen Van Thien, Chairman of Vietnam Cement
Association, currently, the total energy costs account for 45% - 50% of cement production
costs. An 18% increase in gasoline price, a 15.3% increase in electricity price
and a 40% increase in coal price have made price of cement increase by 10% to 15%.
On the other hand, increasing the VND/USD exchange rate by 9.3%
and raising interest rates (some cement plants have to borrow capital with the interest
rate of above 20% per year) have caused great difficulties for cement plants, especially
for cement projects which have become mature.
The increase in the VND/USD exchange rate and interest rate has
made the price of cement increase by 12 to 15%. Thus, electricity, coal, oil, exchange
rate and interest rate have made cement price increase by 22 to 30%.
From late 2010 until now, cement industry has been unable to
withstand the pressure of rising prices of coal, electricity, fuel, VND/USD
exchange rate, interest rate on bank loans ... If no price adjustments are made
to partially offset the cost due to increases in prices of factors mentioned above,
the cement industry will not survive; this year, it will lack resources to
repay domestic and foreign investments.
In 2011, Vietnam Cement Industry Corporation (VICEM) is
expected to pay a debt of VND 3,200 billion; Cam Pha cement plant has to pay a
debt of VND 800 billion... Therefore, the plants have been forced to adjust prices
to offset part of the cost due to increases in prices of inputs mentioned above.
Mr. Thien added that this time, the price would increase by VND
120,000 per ton (about 10% of cost), there has been no salary adjustment for
employees despite the rise of inflation and consumption index.
According to Mr. Le Van Chung, Chairman of the Board of VICEM,
in 10 recent years, Vietnam's cement price has been the lowest in ASEAN, steady
at USD 50 per ton or less than USD 50 per ton, while the average cement prices
of other ASEAN countries are usually USD 65 to USD 75 per ton.
Cement industry is always conscious of keeping cement prices
and supplies stable to help curbing inflation, stabilizing macro-economy. From 2008
to now, the price of cement has increased by only 13% to 15% while coal price has
doubled; prices of electricity and gasoline have also been rising continuously...
A more serious problem is that, along with the price
increases, electricity and coal industries can ensure the supply of only 70% of
electricity and coal demands for cement production. Moreover, power cut will stop
clinker kilns from operating, causing stagnancy for production lines and large losses
for cement plants. The most worrying is that if electricity and coal can satisfy
only 70% of demands, the source of cement for construction shall lack about 30%.
To overcome difficulties in input price increases, Mr. Chung
said VICEM had directed unit members to actively seek all possible measures to reduce
production costs, especially saving energy.
Accordingly, along with the revision of consumption norms of
materials, fuels such as electricity, coal, petroleum, shell ..., cement plants
have reschedule the operation of production lines and devices which use much power
such as stone crushers, material grinders, cement grinders... so that they operate
only in low-load hours.
Besides, VICEM has urgently speeded up the project of utilizing
extra heat of the clinker kiln to generate electricity at Hoang Thach and Tam
Diep cement factories.
VICEM strives to 2014 so that all the cement factories of
the Corporation shall install devices that utilize extra heat of the clinker kiln
to generate electricity, and can self-supply 18% to 20% of electricity for production.
By Minh Duc
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