Vietnam Faces Cement Shortage in 2005

The Vietnam Cement Corp. VNCC) has predicted that the shortfall of cement would continue this year due to booming demand.   The cement demand is estimated at 29.1Mt while production volume will be just 22.6Mt this year, said the country’s largest cement producer.  

The annual demand growth has been 15 per cent and supply growth 10 per cent in the last two years, aggravating the deficit. The Ministry of Construction said there were no cement imports so far this year.  

To cope with this shortage, VNCC, which holds a 50 per cent share of local market, will invest US$1.4bn this year to expand eight of its factories to increase output. These include Hoang Thach, Bim Son, Binh Phuoc, But Son, Ha Tien, Cam Pha, Thang Long and Ha Long cement plants. It also hopes to open the Haiphong and Song Gianh cement plants by the end of this year.  

Vietnam will import 6Mt of clinker this year to ensure the plan of producing 30Mt of cement, according to Nguyen Van Thien, chairman of Vietnam Cement Association.   In another effort, the Ministry of Finance last month cut import tariff on clinker from 25 per cent to 10 per cent, to ensure prices remain stable during the construction season.   The country imported 4.2Mt of clinker last year. Cement demand is said to be growing fast partly because currently state-owned and private firms are carrying out 1353 new housing and property projects, valued at US$2.75bn.