Cement demand expected to boom

Cement demand expected to boom
Published: 18 January 2007

Vietnam will need about US$3.4bn worth of cement between now and 2010 to meet burgeoning demand, the Ministry of Construction said yesterday.

Demand for cement is expected to increase by 10.5-11.5 per cent annually during next five years and might reach 50Mt by 2010, said the Vietnam National Cement Association (VNCA). The figures were announced during the Seminar on Vietnam Cement Industry Development for 2006-10, held in Ha Noi.

Viet Nam’s cement industry has been growing steadily for the last 10 years, said VNCA chairman Nguyen Van Thien. The sector contributed about 10-12 per cent of the GDP of other industries, helping develop the national economy, he said.

According to the master plan for the industry, cement factories would by 2010 attain a total production capacity of 60Mta, he said.

Cement factories, which were mainly State-owned, are gradually becoming joint stock and private companies, he added.

A representative from the World Bank ‘s International Finance Corporation (IFC) said that the corporation had invested over $500m  in more than 25 companies in Vietnam, including cement enterprises.

The development of infrastructure would be one of the major driving forces for industrial growth – especially in the building materials sector – during the coming years, according to IFC.

There are, however, some challenges within the sector, said Le Van Chung, chairman of the Viet Nam National Cement Corporation.

"New cement factories were recently built en masse," he said. "The factories are mostly concentrated in the North and many products are transported to the South and the Centre for consumption."

Chung suggested setting up a specialised transportation network from the North to the South.

"There is now internal competition," he added. "The Cement Association and authorities concerned should work out an anti-price dumping mechanism for better management in this field."

Nghi Son Cement Corporation General Director Norio Mori warned about chaos in the sector. "We’re very confused. There are so many new projects emerging from nowhere."

Market price should be respected, said Mori. Any price control would damage the whole industry, he said.

Mori also suggested that the Government let cement enterprises arrange transportation themselves.

According to the VNCA, the Viet Nam National Cement Corporation led the sector with almost half of all output.