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Ministry imports cement to tackle shortage
The Ministry of Industry and Commerce has decided to allow cement to be imported, to ease the current shortage and enable construction projects to go ahead.
The ministry has so far approved the import of about 5,000 tonnes of cement, mainly for use in Vientiane.
Speaking to Vientiane Times yesterday, Lao Cement Producer Group Secretary General Mr Inpone Phananoulack said the group is unable to supply enough cement to meet demand in the capital, where construction is booming.
The group asked the ministry to allow cement to be imported, not only to address the shortage, but also to deal with the problem of dealers taking advantage of the situation and adding surcharges.
At present, 100 to 200 tonnes of cement are brought into Vientiane every day. Major construction projects have not been affected by the shortfall as large developers have long term contracts with local producers to supply them on a regular basis.
Minister of Industry and Commerce Dr Nam Vinhaket told Vientiane Times yesterday the ministry is committed to adhering to market principles.
“If local producers cannot supply the market, we have to import to address the shortage,” he said, adding that he had delegated responsibility for the matter to the Domestic Trade Department.
The price of cement sold by factories remains the same but most dealers in Vientiane are putting up their prices, claiming their profits have been hit by the irregular supply.
The dealers say they have to continue to pay their workers despite the dip in turnover, so they must raise their prices.
Vientiane Times journalists, investigating the situation, learned that the current price of green brand cement at the factory is 710,000 kip per tonne, while red brand cement sells for 780,000 kip. However, local dealers are charging 800,000 to 850,000 kip per tonne for green brand cement and more than 900,000 kip per tonne for red brand cement.
Local authorities and cement factories allow dealers to add only 30,000 kip to the factory price, but most dealers fail to comply with this regulation, reflecting the weakness of law enforcement in Laos.
Director of Vientiane's Department of Industry and Commerce Mr Beulin Phetchanthalath, explaining product price regulation yesterday, admitted that his department did not have enough staff to monitor all illegal activities.
“If anyone has experience of a dealer overcharging, please call our department,” he said, adding that a lack of staff made it difficult for them to identify such offences without public help.
Currently, the demand for cement in the capital is about 1,500 tonnes daily, but only 1,100 tonnes are supplied each day.
Laos has seven cement factories with a total production capacity of about 1.55 million tonnes annually. This amount is insufficient to supply the growing number of construction projects triggered by the influx of foreign investment.
vientiane times
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