Cement exports set to rise as more factories start production

VIENTIANE (Vientiane Times/ANN) - The export value of cement is expected to rise further as several cement factories have been built and are ready to go into production. 

In 2016, Laos earned just US$200,000 from cement exports, which shot up to US$47.6 million in 2017 and US$47.8 million in the first 10 months of 2018, according to the Ministry of Industry and Commerce.

Cement prices are likely to drop further with sufficient cement available on the domestic market.  

After the Vientiane Hongshi Xaythirath Factory in Phabong village, Hinheup district, went into production, the cost of cement in Laos dropped, especially in the central region, a vendor of construction materials in Vientiane, Ms Ngeun, told Vientiane Times yesterday.   

Last year, the price of Lion brand cement in Vientiane sold for 500,000 kip to 600,000 kip a tonne, but earlier this year it fell to 380,000 kip a tonne, while other cement brands also slashed their prices, she said.

Hongshi cement brand now costs only 370,000 kip a tonne in Vientiane, Ms Ngeun added.

With Hongshi cement selling so cheaply, many locals are happy to buy this brand for private construction purposes.

 The factory’s daily production capacity is 5,000 tonnes. It sells to Laos and exports to Thailand.

A Chinese company invested US$300 million in a cement factory on a 76-hectare site, with a 50-year land concession.

But some cement manufacturers are yet to slash prices as their production costs are still high.

According to the Lao Cement Public Company (LCC), Red Bull brand cement is selling at 690,000 kip, green bull brand at 610,000 kip and blue bull brand at 580,000 kip.

Laos began exporting cement products in 2017 after the government allowed domestic and foreign investment in the commodity.

The country earns a significant amount from cement exports.

The increase in the number of cement plants is a challenge for domestic cement producers as they are forced to make their prices competitive, which translates into good news for consumers.

Some companies are trying to lower their prices to boost their domestic market share.

At present, there are cement factories catering to the domestic and export markets in Savannakhet, Khammuan, Vientiane, Saravan, Oudomxay, Xieng Khuang and Luang Prabang provinces, as well as in Vientiane.

 Laos has 16 operational cement plants while some are still under construction. When all of these are operational the country will be able to produce up to 6.76 million tonnes a year. There are no updates on the precise number of cement plants in Laos and their capacity.

The amount of cement needed for development projects is rising due to the inflow of foreign investment into Laos.

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