Vietnam: Cement makers solidify markets

Vietnam: Cement makers solidify markets
Published: 29 May 2007

Vietnam will become the leading cement producer in ASEAN by 2010, with a predicted output of 60Mta according to the Vietnam Cement Association.  
 
Nguyen Quang Cung, director of the Ministry of Construction’s Department of Building Materials, said that 30 new cement plants were currently in progress nationwide, in addition to 17 existing plants that were in the process of expanding their capacity to reach a total of 48 million tonnes per year.  
 
Tran Quang Tuan of  Vietnam Cement Corporation, said that the corporation had nearly completed construction of such major cement plants as the Bim Son plant, a second production facility at the But Son plant, and a third production facility at the Hoang Thach plant.  
 
The Cement Corporation’s Nguyen Van Diep said that Vietnam would have a surplus of clinker, a major ingredient of cement, by 2009.  
 
However, the Cement Association has warned against the development of too much capacity, noting that supply by 2010 could exceed demand by 12 million tonnes. Exports could provide a solution to redundancy, but competition with Thai and Chinese cement producers was stiff. 
 
Most of the increased capacity was being developed in the northern region, noted Cement Association chairman Nguyen Van Thien, which could add high transportation costs of about 200,000 VND per tonne to serve markets in the south.  
 
Thien advised investors and enterprises in the cement sector to take care in choosing locations for plants.  
 
Meanwhile, the Ministry of Construction has asked the Prime Minister to restrict the spread of investment in cement projects for the time being, especially smaller projects.  
 
Domestic cement consumption in April reached 3.5Mt, an increase of about 900,000t over March, bringing total consumption in the first four months of this year to 11.8Mt. 
 
The Cement Corporation predicted that, in the second quarter of this year, consumption would continue climbing, with high demand driven by an upswing in construction activity.