Vietnam: Ministry wants cement staples to head south

Vietnam: Ministry wants cement staples to head south
Published: 21 April 2008

The Ministry of Construction is calling on the Vietnam Cement Industry Corporation and major cement-making joint ventures to reserve large volumes of clinker for shipment to the southern market, currently facing short supplies.
 
The ministry has forecast that total cement demand this year will reach 40Mt and cement producers will have to import 4Mt of clinker to meet the needs of domestic producers, according to the Vietnam Cement Association.
 
The association was predicting localised shortages, especially in the southern region.
 
The Vietnam National Cement Corporation, as well as such major cement producers as Nghi Son, Chinfon-Hai Phong, Holcim, Phuc Son, and Lukvaxi, were urged to step up production and not stop for maintenance in April and May, in order to ensure stable supplies and prices.
 
Earlier this year, the corporation was ordered to co-ordinate an industry-wide plan with producers and importers on clinker and cement production and supply to areas facing imminent shortages, including Ho Chi Minh City, Hanoi, and Da Nang.
 
Meanwhile, cement producers have asked the Prime Minister to eliminate import duties on clinker and lower the duty on imported cement to 10 per cent in order to stabilise prices.
 
Cement producers are already complying with a promise made to the Prime Minister not to raise price before the end of June. In return, the industry argues that lower import taxes on clinker and cement are needed to keep the industry from suffering losses, asking that the import tax this year on cement imported from outside the Association of Southeast Asian Nations (ASEAN) be lowered from 40 per cent to 10 per cent.
 
Currently, clinker sourced from outside the ASEAN region is also subject to a 10-per-cent tariff, and ASEAN-sourced clinker to a 5-per-cent duty.
 
However, it has become increasingly difficult to obtain clinker at reasonable prices from ASEAN sources. In the first four months of this year, the free-on-board price for clinker from Thailand and the Philippines rose 72 per cent (from US$30 per tonne earlier in the year to $38 per tonne recently).
 
Clinker prices have even soared to VND1.1 million ($68.75) per tonne at Vietnam ports, exceeding the domestic cement price in some instances.
 
In the first quarter of the year, the country’s cement output reached nearly 8Mt at prices of VND885-920,000 per tonne in northern region and up to VND1.1 million per tonne in the South, reported the Vietnam Cement Association.