Cement makers urged to cut costs

Cement producers should cut energy and other costs and restructure in order to enhance their financial capacity and sharpen their competitiveness, said Deputy Prime Minister Hoang Trung Hai in a meeting with representatives of the State-owned Viet Nam Cement Industry Corporation.

The economy was in a harsh situation, with a heavy adverse impact on the cement industry, Hai said last Friday. The sector therefore faced an urgent need to diversify its products and markets in order to boost exports.

Hai also urged the ministries of Finance and Construction to address foreign exchange fluctuations between the Vietnamese dong and the US dollar which have eaten into the industry's profit margins.

He also urged the Viet Nam Cement Industry Corporation to work closely with the Ministry of Transport on its regional and provincial road-building programme, which would help to boost cement consumption.

The corporation should also strike an agreement with the Ministry of Industry and Trade to source raw materials and avoid the kinds of shortages that have halted production at a number of cement plants in recent months, he said.

Hai also praised the cement industry for reaching price targets set by the Government this year despite high inflation and rising input costs.

The corporation earned VND20.5 trillion (US$985.6 million) in the first nine months of the year, producing nearly 11 million tonnes of clinker and 12.3 million tonnes of cement. Its subsidiary companies have begun repaying debts incurred to finance construction of the Hoang Thach No 3, Binh Phuoc, Bim Son and But Son No 2 cement plants.

The corporation's general director, Nguyen Ngoc Anh, acknowledged, however, that the corporation would be unable to meet its pre-tax profit target for the year of VND1.25 trillion ($59 million), having alread suffered losses totalling VND7.8 billion ($371,000) in the first nine months due to soaring interest rates and the rising costs of raw materials.

Demand for cement also decline dramatically in the third quarter, he said, compared to the same period last year, due to the effects of heavy rains on the construction season.

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