Vietnam cement: uncertain times ahead

Vietnam cement: uncertain times ahead
Published: 07 January 2011

Vietnam cement producers are set for an uncertain future, with supply expected to exceed demand in the coming years, according to Nguyen Nhu Khue, director of Bim Son Cement Joint Stock Company.

According to a report made by the Viet Nam Construction Materials Association, national cement production would reach 55Mt this year, surpassing demand by between 3-4Mt, and under an industry plan, cement output would reach 100Mt in 2020.

In addition, a series of new cement plants and the expansion of existing ones would lead to the stockpiling of cement. It is predicted that the domestic cement industry would see a redundant supply of 7Mt this year and 15Mt in 2012.

The Bim Son Cement company recently put its second production line into operation to raise production capacity to nearly 4Mta.

Deputy Minister of Construction Nguyen Tran Nam said next year, local cement production would be more competitive due to redundant output. Along with domestic consumption, the Ministry of Construction proposed that businesses increase exports to reduce competitive pressure on the domestic market.

If businesses looked for new customers, the industry could export between 5- 7Mt next year, said Nam.

Anticipating fierce competition, the Ministry of Construction asked provinces to temporarily stop issuing licences for new cement projects at the end of 2009, and this year, the ministry has continued to enforce licensing criteria with regards to exports from joint venture cement manufacturers.

However, Deputy Minister Nam admitted the reasons that the country’s cement exports were limited were high product prices and a large investment ratio, combined with difficulties in infrastructure and inland transport.

The industry as a whole must work hard to boost exports, he said.