Vietnam cement industry outlook

Vietnam cement industry outlook
Published: 27 January 2005

Deputy construction minister Tong Van Nga said the Ministry of Construction estimates demand for cement will increase by 8 to 12 per cent this year.    The Viet Nam National Cement Corporation (VNCC) has been assigned the task of stabilising the domestic cement market, and aims to achieve this goal by churning out more than 8Mt of clinker, and between 12 to 12.2Mt of cement.   The corporation’s general director Nguyen Van Hanh said the VNCC will definitely meet the proposed target due to the recent opening of a clinker factory in Tam Diep, in the northern province of Ninh Binh and the proposed opening of another clinker factory in Hai Phong late this year. These two factories will cut down the need for imported clinkers and allow the country to maintain last year’s level of 4.5Mt clinker import for cement production.  

The corporation has instructed its subsidiaries of Ha Tien No 1 and Hoang Thach to stockpile clinker to be ready for cement production. The two producers will import some 1.5Mt to 2Mt of clinker this year, Hanh said.   However, the Ministry of Construction has warned of a price hike in the cost of materials associated with cement production. According to a ministry report there will be a 15 per cent rise in the price of clinker and plaster, and a 17 per cent rise in coal prices.   Nga warned the VNCC might have to reduce profits to stabilise the market this year as the construction sector will need about 1.2Mt of coal, 310,000 tonnes of gypsum and 357,000t of additives for its production.  

The cement industry is also worried about investment capital for new cement plants. VNCC’s Hanh said the sector’s investment demands are high this year while its new cement producer, Tam Diep, is forecast to make big losses as it has just been put into operation.   However, the VNCC said it aims to make a profit of more than VND220 billion (US$14m) despite loan payments for the construction of its existing cement plants.