Lao Cement Group calls for halt to new plants
Lao Cement Group calls for halt to new plants
The Lao Cement Group has suggested that the government suspend the approval of new cement plants in Laos as they are concerned about the impact on the domestic market.
The government has so far approved the establishment of 18 cement factories around the country with a combined capacity of 12 million tonnes a year but the demand within the domestic market is only 3 million tonnes, according to the cement g roup.
If Laos is looking to produce cement for export to neighbouring countries it may find that it suffers from high transportation fees while some countries also have sufficient domestic supply, the group noted.
Laos has 12 cement factories in operation with a production capacity of more than 5 million tonnes a year, while another six are under construction and six in the feasibility study stage.
However, some cement products are still imported from neighbouring countries for trading and supply to major infrastructure projects.
Siam Cement Group (SCG) headquartered in Thailand plans to invest US$370 million for cement plant construction in Khammuan province with a capacity of 1.8 million tonnes per year, which is the biggest cement plant in Laos and SCG's first cement plant in the country.
The project began construction last year after the government approved a feasibility study in 2014 and the plant, located in Phowa village, Mahaxay district, is expected to start production next year.
Most of the large cement plants will be set in Khammuan province, which has considerable potential in terms of raw material supply.
There is also the Hinboun cement plant construction project under the Lao Cement Industry Development Company, which has a production capacity of 1.7 million tonnes a year and the Nhommalath cement plant under construction by the Phonesack Group.
However, the Southeast Asian cement market has seen rapid demand growth in recent years. Backed by favourable macroeconomic trends, it is likely to remain one of the fastest-growing cement markets.
Many cement producers, both local and international, perform very well in this region and are keen to expand their capacity, while for others entering these enticing markets has become a priority, according to The Jakarta Advisory Group, Indonesia.
On a regional level, Southeast Asia has experienced a supply surplus for the past two years. While overcapacity is mainly concentrated in Vietnam and Thailand, almost all other countries in the region import clinker and cement to meet local demand.
The remaining surplus is exported to Bangladesh, Sri Lanka, eastern parts of Africa and even South America.
