Work begins on Vietnam’s biggest cement project

Work begins on Vietnam’s biggest cement project
Published: 20 May 2010

Kinh Bac Urban Development Corp and its affiliate Sai Gon – Tan Ky Cement Joint Stock Co began construction of a US$1.5bn cement industrial zone on May 19 in the central province of Nghe An.

Occupying a 600ha area in Tan Long Commune, the Sai Gon – Tan Ky cement industrial zone will be the country’s largest of its kind and is expected to churn out 14Mta of cement when fully operational.

The zone’s first phase, costing VND1.5trn (US$78.9m), will take six years to complete.

"The new zone will supply large quantities of cement for major construction projects, particularly in Laos. It will help the company reduce investment costs and become more competitive," the company said in its latest press release.

According to the General Statistics Office, in March the country produced 4.09Mt of cement. Cement production in the first quarter of the year hit 11.13Mt, 1.15Mt more than the same period last year. Meanwhile, demand increased by 6.4 per cent against the same period last year, reaching 10.27Mt.

The country now has 105 production lines with an annual capacity of more than 61Mt.

However, domestic demand this year is expected to be between 48Mt and 50Mt, resulting in a huge surplus.

Industry experts said domestic cement firms would find it difficult to break into major markets such as the US and the EU, which have extensive high-tech infrastructure already in place and a lower demand for cement.

Africa and developing countries with poor infrastructure offer the most potential for Vietnamese exporters, industry experts have said.