|
Reform or die, cement producers warned
Before Laos joins the Asean Free Trade Area (AFTA) in 2015, cement producers must overhaul their marketing policy or they will not survive.
 |
| A cement factory in Vangvieng district, Vientiane province. |
Vientiane Industry and Commerce Department officials point out that imported cement is cheaper than the cement that is produced in Laos. If this situation continues, it will pose a serious challenge when Lao cement factories go head to head with overseas producers in 2015, when cheap imported cement will flow freely into the country.
At present, the government limits the amount of cement that can be imported in order to protect Lao producers. This enables Lao cement factories to sell the product for a high price, especially as the construction industry is booming.
A cement factory in Khammuan province has called on the government to immediately stop importing cement from Thailand, saying the imports are hurting their sales volume.
The factory has 20,000 tonnes of cement ready for distribution and another 100,000 tonnes of unpackaged cement in its warehouse, so it is not appropriate for the government to import foreign products, the company said in a media statement published on January 22.
Since the end of last year, the Vientiane authorities have imported about 16,000 tonnes of cement to counter the short supply in the capital.
Vientiane Times has learnt that disruptions to distribution between the factory in Khammuan province and sales agents in Vientiane have contributed to the short supply of cement in the capital. This has driven the price of cement above 780,000 kip per tonne, despite the fact that the approved wholesale price is 710,000 kip.
The factory's call to the government to halt imports is a strong signal that the industry must reform its marketing policy before Laos joins the AFTA in 2015.
A company official admitted changes were necessary to ensure sufficient supply for the Vientiane market.
One of the reasons for the high price of Lao-produced cement is that the factory has to import charcoal from Vietnam for use in processing.
The Vientiane Industry and Commerce Department's Domestic Trade Division Chief, Mr Nouman Phothisane, said every Lao business must prepare for stiffer competition when Laos opens up its doors to imports in 2015.
He pointed out that it would be impossible for the government to protect domestic firms as this would infringe AFTA regulations.
Under AFTA policy, all Asean members must cut import tariffs to zero. This is intended to create a single Asean production base and market, where goods, capital and labour can flow freely.
vientiane times
|
