The State-run Development Assistance Fund last week granted a credit of almost VND700 billion (US$43.7m), with an annual interest rate of 6.6 per cent, for the construction of the Tay Ninh Cement Plant, said a senior company official. Director of the Tay Ninh Joint-Stock Cement Company (FICO) Mai Ngoc Liem said that although the loan accounted for just 27 per cent of the project’s total $176.8m capital, it was crucial for the project’s success. He explained that the credit would facilitate the settlement of export credits for the plant’s bidding package, which is carried out in the form of an EPC (Engineering, Procurement, and Construction) contract.
The plant will be able to produce 4,000tpd clinker, equivalent to 1.5Mt of cement per year.
The project includes a US$167m main plant in Tan Chau District with a yearly capacity of 1.26Mt of clinker and 900,000t of cement, and a $12m cement grinding station in HCM City’s Hiep Phuoc Industrial Park with a capacity of 600,000tpa of cement,
Liem expected the construction work for the plant to be completed by 2007 and full operation to begin by early 2008, when the cement market in the southern provinces is predicted to be booming. The factory’s key components will be imported from the European Union, while others will be manufactured domestically.
Tay Ninh is one of the few provinces in Vietnam with abundant limestone and clay deposits, making it an ideal location for the production of cement. Industry insiders said that the building of the cement plant at Tay Ninh’s Sroc Con Trang limestone mine, which has reserves of up to 78.7Mt, will ease the price of clinker in the region.
Tay Ninh authorities expect the factory to boost the province’s industrial growth rate and create jobs for thousands of local people. Other auxiliary work, including site clearance, power and water supply development, and the construction of post and telecommunications facilities, has been carried out as planned, said Liem. He added that bidding for the EPC contract would finish in September, with the contract expected to be finalised later this year.
According to the Construction Materials Institute, the cement industry will need about $3.38 billion for production projects between now and 2010. The figure is indicated in the industry’s development plan up to 2010 and its vision for the next 10 years, said the institute, an affiliate of the Ministry of Construction. By the end of this year, Vietnam’s cement output is estimated at 22.3Mt, 6.7Mt below expected demand.