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Cement prices rise without ministry approval
Cement producers in Laos have decided to increase the prices of their products, claiming the move is necessary to maintain profitability.
Lao Cement Producer G roup Secretary General Mr. Inpone Phananoulack said yesterday that producers had initially planned to increase prices after the general election on April 30 but had to speed up the process due to rising oil prices in the world market.
The Ministry of Commerce and Industry told Vientiane Times yesterday that it did not know of the increases to cement prices, meaning they were made without approval.
But the Lao Cement Producer Group claimed the increases are still within the ceiling price previously approved by the ministry so it was not necessary to again seek approval.
According to the group, the price of green cement yesterday increased from 680,000 kip to 710,000 kip per tonne and retailers are allowed to sell it at 740,000-750,000 kip per tonne.
Red cement increased from 750,000 kip to 780,000 kip per tonne and retailers are allowed to sell it at 810,000-820,000 kip per tonne.
Vientiane Times inv es-tigated the issue yesterday and found some retailers in Vientiane are selling green cement at 780,000 kip per tonne and red cement at 850,000 kip per tonne.
Traders have claimed that they surcharged customers the extra costs as they needed money to pay their workers, despite it seeming unfair to customers.
A senior official from the ministry's Domestic Trade Department said yesterday it does not have measures to punish or fine traders who surcharge consumers. It can only continually warn traders not to repeat their mistake.
Vientiane has faced a severe cement shortage for the past week, hurting the construction sector which wants projects to be completed on schedule.
Mr. Inpone said the demand for cement in Vientiane this week increased to 2,000 tonnes per day, but supply is only 1,000 tonnes per day.
He said the shortage occurred because a factory in Khammuan province decided against supplying cement to the capital due to the rising costs of transport. The factory said it would only resume supply to Vientiane if the prices of cement were raised.
“Representatives of the factory told me they earn more by selling cement to neighbouring provinces than to Vientiane,” he said.
When asked if some cement producers are hoarding their products, causing prices to increase, Mr Inpone responded that this is not the case in the capital.
“I'm confident that the price of cement will go down in the near future when supply meets demand.”
Laos has seven cement manufacturers with a total production capacity of about 1.55 million tonnes a year, but this figure is only enough to meet 80 percent of total domestic demand.
With the continued growth of the Lao economy driven by an inflow of foreign investment, many new projects and buildings are appearing in the country every year, boosting the demand for cement.
vientiane times
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