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Cement shortage hurting small firms
A shortage in the supply of cement in Vientiane is negatively impacting on small construction companies, according to a representative of Lao construction firms.
Construction Business Group President Mr. Phimmaha Panyanouvong said on Friday that a number of small construction firms in Vientiane have had to halt construction projects because of a lack of cement.
“Many small and medium size construction companies are complaining about the cement shortage which is impacting on their business operations,” he said in an interview with Vientiane Times.
He said that the two-week long shortage of cement in the capital will cost construction businesses between five and 10 percent of their revenue as they continue to pay labour costs while there is no work for employees.
Some companies have been forced to pay higher prices for cement because they need to complete construction projects in accordance with contracts.
Mr. Phimmaha, who is also director of Panyathip Construction Company, said major construction companies in Vientiane are not facing supply shortages because of the good relations they have with cement suppliers.
“The big construction firms undertaking major construction projects are not facing cement shortages because the firms and cement suppliers have good relations as they do not want to lose customers.”
He said that the group supports the government's plan to keep the price of cement stable over the next few months, adding that an increase in price will have severe impacts on the industry.
“We signed construction contracts when price of the cement was low and it is difficult to revise the contract when the price of cement increases,” he said, adding that construction projects have no additional funds to cover an increase in costs.
He said that the government should allow imports of foreign cement for use in Vientiane if they have difficulty stabilising the price of domestic cement.
The Ministry of Industry and Commerce has confirmed that any imports of foreign cement will be restricted as the supply of domestic cement should be sufficient. However they will increase efforts to investigate the hoarding of cement in construction supply yards.
Cement producers said they have agreed with the government to keep the price of cement low but truck operators who provide transport services for cement want to increase the price of their services, making supply of cement to Vientiane for the same price impossible.
The current demand for cement in the capital is between 1,000 and 1,500 tonnes a day.
vientiane times
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