Brick makers feel economic heat

Brick makers feel economic heat

Local industry caught between falling demand and cheap
Local industry caught between falling demand and cheap, illegal imports from Vietnam Tracey Shelton

Locally made bricks use better quality materials than cheaper imports from Vietnam, say industry experts.

Price watch

construction materials
Steel rods were selling in Phnom Penh markets at 3,921 riels per kilogram Friday, a rise of 78.23 percent over the base price for the year, according to figures from the Ministry of Commerce’s Trade Promotion Department. Cement was selling at an average of 19,814 riels per sack, an increase of 23.84 percent over the year’s base price.

Brick makers are suffering from falling prices in a construction market flattened by both the rainy season and the current economic downturn, as well as from competition from cheaper imports from neighbouring Vietnam, according to industry insiders.

"I think imported brick from Vietnam is popular among housing developers in Battambang because it's cheap," said Bou Sophal, president of the Battambang Brick Manufacturers Association.

"But it is not generally used by individuals as it is low in quality and less dense than local brick."

Mao Thora, secretary of state in the Ministry of Commerce, also worried that the smuggling of illegally imported bricks from Vietnam would have a negative impact on local producers. Traders were smuggling cheaper bricks from Vietnam by burying them under other goods, Mao Thora told Prime Location.

"It will kill local brick kilns if they are imported on a large scale," he said.

The owner of a brick-making factory in Kandal province who asked not to be named told Prime Location by telephone interview, "We can't compete with imported bricks because they're cheaper.

"I do not understand why the government allows imports from Vietnam while local producers are able to make them."

Falling demand

His factory was able to produce an average of 400,000 pieces per month, he noted, with about 10,000 bricks per day sold in Phnom Penh and surrounding areas.

"We are selling at a price of US$500 for 10,000 bricks while it was over $1,200 earlier this year due to the high demand from housing developers," he said.

Yim Chanveasna, assistant project manager of Venture Cambodia PTE Co Ltd, said that his company preferred to buy more local brick than imported product, buying 50,000-60,000 bricks per month from local producers.

"To build a one-storey house, you need at least 30,000 bricks and about 70,000 bricks for a two-story villa," pointed out Yim Chanveasna.

 

"The price of bricks has dropped to below $500 for 10,000 bricks from almost $600 three months ago," he said.

Bou Sophal told Prime Location that brick kilns in Battambang province were currently employing about 3,000 workers and could produce about 10 million bricks per month, to be sold in Battambang, Pailin and markets in the surrounding areas, as well as in Phnom Penh.

Badly fired

He pointed to rising fuel and raw materials costs as other factors having a negative impact on the industry.

The price of wood - the primary source of fuel for brick kilns - was increasing due to the growing scarcity of wood, agreed Mao Thora.

"If they want to sustain their profits they should find ways to deal with this shortage, such as using charcoal or rice husks," Mao Thora said.

Over 20 brick kilns in Battambang province were burning rice husks instead of wood, but with the additional impact of requiring more workers to carry fuel to the kilns, Bou Sophal said.

He was also concerned about a decline in the quality of bricks if they were not well-fired.

The price of clay for making the brick, meanwhile, has also increased from $1.50 to about $1.80 per cubic metre, said Bou Sophal.

"Previously, when people dug wells, we could get the clay cheaply," he noted, but few people are digging wells during the rainy season.

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