Vietnam to Face Possible Cement Crisis

Vietnam to Face Possible Cement Crisis
Published: 06 December 2004

Vietnam may face a serious shortage of cement in the near future due to increasing demand and slow implementation of cement projects nationwide, according to the head of Construction Material Management Department under the Ministry of Construction (MoC), Nguyen Quang Cung.    MoC earlier had forecasted that Vietnam would face a shortage of 8.7Mt of cement next year and 6-8Mt each year over the next couple of years.    The slow construction of cement plants is mainly due to lack of capital poor management capacity and difficulties in site clearance compensation by the project investors, the Head of the ministry’s Economic and Financial Department, Vu Thi Hoa said.  

After two years of implementing Vietnam’s cement industry development plan to 2010 as well as orientations by 2020, which was initially approved by the Prime Minister (PM) in 2002, the construction pace of cement projects has been sluggish, running at least one year behind the schedule.    Therefore the Vietnamese Deputy PM Nguyen Tan Dzung on November 29 released an adjustment of the plan.  

Accordingly, the government decided to develop cement production in eight economic zones of the northwest, northeast, Red River delta, central northern and southern regions, central highlands, southeast and the Mekong delta.   Under the adjusted plan, the cement consumption demand across Vietnam is forecasted at 28.4Mt in 2005, rising to 46.8Mt in 2010. The government also directed a reduction in clinker imports, and decided to give soft loans from the Development Assistance Fund to cement projects in mountainous, remote and isolated areas that produce clinker and offer guarantees to specific projects for foreign loans.  

Vietnam consumed some 2.44Mt of cement in November, bringing its total cement consumption during the first eleven months of this year to nearly 23.28Mt, according to the MoC’s statistic figure.   This month the country is predicted to consume 2.5-2.6Mt of cement, said General Director of Vietnam Cement Corp. (VNCC).  Despite increasing demand for cement, VNCC pledges to keep cement price stable between now and the end of this year. The price stands at VND750,000 (US$47.8) per ton in the north and some VND850,000 (US$54.1) per ton in the south.