Cement manufacturers raise prices as electricity costs drive up inputs
The price adjustment will see an increase of VNĐ50,000 per tonne for most companies, while The Vissai has set a smaller increase of VNĐ46,300 per tonne.
Major cement producers – including Vicem Bỉm Sơn, Bút Sơn, The Vissai, Thành Thắng Group and Xuân Thành Cement – have announced price increases starting from October 20 in response to rising production costs driven by higher electricity, coal and packaging prices.
The price adjustment will see an increase of VNĐ50,000 (US$1.97) per tonne for most companies, while The Vissai has set a smaller increase of VNĐ46,300 per tonne.
A representative from Thành Thắng Group said: "Electricity prices recently rose by 4.8 per cent, and electricity expenses account for 14-15 per cent of production costs, leading to higher overall manufacturing costs. Despite implementing various cost-cutting measures and improving efficiency, such as utilising waste heat from production lines, we have not been able to fully offset the increased expenses."
The price hike of VNĐ50,000 per tonne is expected to help cement manufacturers maintain stable operations and ensure product quality, he said.
According to producers, Decision No 1046/QĐ-EVN issued by Vietnam Electricity (EVN) led to a 4.8 per cent electricity price increase starting on October 11. In addition, ongoing global geopolitical conflicts have caused significant fluctuations in input costs, including for coal and oil, which are expected to continue rising, making it unsustainable for the industry to maintain previous price levels.
According to the Vietnam National Cement Association (VNCA), price increases are inevitable, as cement has been sold below production cost for several years. Without adjusting prices to partially cover rising input expenses, companies would struggle to survive.
In the first nine months of 2024, domestic cement consumption remained roughly on par with last year and continued at a low level. Exports also declined, with only 22.5 million tonnes worth $863 million shipped, down 4.3 per cent in volume and 15.1 per cent in value compared to the same period last year.
The list of manufacturers raising cement prices is expected to grow in the next few weeks. VNCA noted that electricity accounts for approximately 15-20 per cent of cement production costs, depending on the plant. As a result, when electricity prices are adjusted upwards, cement companies must also raise their prices to stabilise business operations. — VNS
