Affected by the "Hot" Infrastructure Construction, Laos' Cement Production Surges

   01 Exports are strong

   In the first quarter of this year, Lao cement exports increased by 25.1% compared with the same period last year, while the value of imports decreased by 14.2%. According to the Ministry of Industry and Trade, cement exports from Laos in the first quarter of this year amounted to US $19 million, compared with US $15.23 million in the same period last year. Cement imports totaled about $16.4 million in the first quarter of this year, but in the same period last year, Laos imported $19.1 million worth of cement.

   02 Production capacity surge

   With the increase in cement production capacity following the start of commercial operations of several cement plants, the volume of exports is also increasing. As the number of cement factories in Laos continues to increase, increasing competition has led to lower prices, which is a challenge for domestic producers, but good news for consumers. Companies are trying to lower prices to gain more domestic market share, but most of them are doing well and demand for building materials is still high.

   According to Lao Cement Public Company (LCC), the company's Red Bull brand cement is 690,000 kip per ton, Green Bull brand cement is 610,000 kip per ton, and Blue Bull brand cement is 580,000 kip per ton.

   Cement exports from Laos have recently increased as various manufacturers have put their plants into commercial operation. In 2016, the cement export revenue of Laos was about USD 0.2 million, which increased significantly to USD 47.6 million in 2017, while the cement import volume reached USD 84.25 million in 2016, which decreased to USD 68 million in 2017.

   The number of cement plants in operation and under construction in Laos has reached 16. When all these plants are operational, they will be able to produce up to 6.76 million tons of cement per year. According to a recent industry update, the total production capacity of cement is currently 4.4 million tons. At present, there are cement plants in Savannakhet, Khammouan, Vientiane, Saravan, Oudomxay, Xieng Khouang and Luang Prabang provinces, as well as the capital city of Vientiane.

   03 Capital construction "heat up"

   Due to the inflow of foreign investment into Laos, the amount of cement required for development projects is increasing. At present, Laos is building various large-scale state-owned and private projects, including several hydropower stations and the China-Laos Railway. The construction of China-Laos Railway is a key task of the Lao government, which needs a lot of cement every day.

   In the next few years, more cement will be supplied to large-scale infrastructure projects, such as the Vientiane to Vang Vieng and the proposed Vientiane to Pakse Expressway.