The Vietnam Cement Association said it has proposed a road map for a cement price hike in a bid to compensate for the increasing prices of materials. The association said it proposed to raise the price of cement by VND50,000 (US$3.11) per tonne for this year, a rate that was generally supported by industry insiders and relevant ministries.

Production costs of cement rose by VND30,000 per tonne last year and if the price of coal and electricity rise by 20 per cent and 10 per cent as scheduled, production costs will rise by another VND20,000 per tonne.

Deputy Minister of Construction Tong Van Nga said rising commodity prices increased cement prices in the global market since 2004, while prices in Vietnam have been stable over the last 10 years. He said if the depreciation of the Vietnamese dong against the US dollar is taken into account, prices of cement in Vietnam have decreased by 30 per cent over the last several years.

According to the country’s largest cement producer, the Vietnam Cement Corporation, cement prices increased by VND30,000-40,000 per tonne in Ho Chi Minh City since April. VNCC, which holds a 46 per cent market share, said cement producers profits have been decreasing annually, and may see a sharp decline in 2006 as the result of scheduled price increases in coal, power and petrol.