VietNamNet Bridge – Cement producers have asked the Prime Minister to lower the import taxes on clinker to 0% and on cement to 10% in return for the promise to maintain the price of cement.

According to the Vietnam Cement Association, in 2008, Vietnam needs 4.5mil tonnes of clinker to meet the demand of local production. Clinker is now being imported from non-ASEAN countries (China, Republic of Korea) and ASEAN countries (Thailand, Indonesia).

Currently, non-ASEAN sourced clinker is being imposed a 10% tax, while ASEAN-sourced product, 5%. Due to the difference in the tax rates, Vietnamese cement producers have been limiting imports from non-ASEAN countries. Meanwhile, it is now more difficult to import clinker from ASEAN countries as the suppliers are requiring higher prices. In the first four months of the year, Thailand- and Philippine-sourced clinker increased by 72% FOB in price (it was $30/tonne earlier this year, and it is now $38/tonne).

The clinker price has soared to VND1.1mil/tonne at Vietnam’s ports, even higher than the domestic cement price.

As per request of the Prime Minister, cement producers have promised not to raise the sales price before the end of June 2008. In return for this, the cement association thinks that it is necessary to lower the import taxes on clinker and cement.

The association has asked the Prime Minister to lower the import tax on non-ASEAN clinker from 10% to 0% (applied for 2008 only), and on ASEAN clinker from 55 to 0% (applied for import consignments as of April 20, 2008).

In anticipation of the sharp increase of demand for cement, which requires additional imports, the association has also asked that the import tax on non-ASEAN cement be lowered from 40% to 10%, applied only for 2008.

The Ministry of Construction has called on the Vietnam Cement Industry Corporation and big cement joint ventures to reserve big volumes of clinker for the southern market.

The ministry said that this is one of the necessary measures to settle current difficulties: improve supply to stabilise the market.

The ministry has forecast that the total cement demand will reach 40-41mil tonnes this year, and cement producers will have to import 4mil tonnes of clinker.

Local production is believed will output enough to meet the demand. However, experts have warned that local shortages will certainly occur, especially in the south.

The Ministry of Construction has called on big producers, including Nghi Son, Chinfon Hai Phong, Holcim, Phuc Son and Lukvaxi, to push up production and not to stop production for maintenance in April and May 2008, in order to ensure stable supplies for the market.

(Source: TBKTVN, VietNamNet)