Plans by Vietnamese cement producers to ease a surplus in the domestic market by ramping up exports of cement may be difficult to carry out, according to several experts from the sector.
General director of the Cement Finance Company (CFC) Bui Hong Minh said that while expanding exports might in part help ease the cement surplus, securing new markets for Vietnamese cement would be a difficult task.
"Exporters have to pay considerable costs for intermediaries, thus pushing prices higher," said Minh.
The Vietnam Cement Industry Corporation (Vicem), the country’s largest cement producer, has set an ambitious target of exporting 1Mt of cement this year.
Figures from the General Statistics Office show that during March, the country produced 4.09Mt of cement. Cement production figures for the first quarter of the year hit 11.13Mt, an increase of 1.15Mt in the same period last year.
In an effort to ease the surplus situation, the Government has asked contractors to focus on using cement in rural transport construction projects.
However, Chairman of the Vietnam Construction Materials Association Tran Van Huynh said the programme aimed at maximising use of cement in transport projects had not been implemented effectively.
Programmes to expand exports have had several successes. In 2008, Vietnamese cement producers expanded their market share in neighbouring countries such as Cambodia, Laos and China. However, the volume of exports to these countries is still at a modest level.
Some Vietnamese cement firms have sought to expand exports in major markets such as Africa, the EU and the US, but few had successes.
Vinaconex’s Cam Pha Cement Company has exported 12,500t to Africa and signed a contract to ship 40,000t per month to South Africa and neighbouring areas.
Ha Tinh Cement Company has exported 16,000t of cement to Cambodia so far this year, while Hoang Mai Cement Company is hoping to expand exports to Africa and the Middle East.
However, Vietnamese cement producers competing with regional producers in distant markets have to spend more on transportation costs, which can limit the competitiveness of their products.