Cement shortage results in price inflation
Cement shortage results in price inflation
The cement price in select construction equipment stores across the country has increased due to a supply shortage of cement products from factories.
Due to the increased construction during this dry season, retail cement stores have taken the opportunity to raise the price of cement for their personal profit.
The red cement brand BMC Cement Industry Factory (Lion brand) and Lao-Phatthana Cement Factory (Elephant brand) are usually sold between 800,000 kip and 820,000 kip per tonne. However some shops are currently selling it for around 840,000 kip to 860,000 kip per tonne.
Green cement also increased from the usual price of around 700,000-720,000 kip per tonne to 750,000-760,000 kip per tonne.
According to Souksomboun Group Ltd, which is a major cement producer in Laos, the cost of cement in factories stands at a stable 660,000 kip for red cement and 590,000 kip for green cement.
The company said due to the high demand of construction during the dry season, they had to backorder and suspend product shipments as there was insufficient stock.
The company's marketing department said every year during the dry season the demand for cement increased and would usually decrease during the wet season as it becomes difficult to carry out construction works.
The boom in infrastructure development requires vast amounts of concrete.
Many large projects such as hydropower plants and road construction are still importing cement products.
Vangvieng Cement Plant No. 3 produces between 850,000 to one million tonnes of cement every year while Souksomboun Group Ltd is supplying around 5,000 tonnes of cement per day.
Around 1.7 million tonnes of cement is produced by cement factories in Laos every year but as the economy booms, the demand has soared to 3.5 million tonnes per year.
The demand for cement is likely keep increasing as the government implements several infrastructure development plans and other building construction projects.
The price of cement is under the government's list of product controls however, the rising cement prices are a result of the vendor's decisions.
vientiane times
