Vietnam delays ­ boost for imports

Vietnam delays ­ boost for imports
Published: 08 April 2004

Extensive delays in building cement plants could see Viet Nam continuing to rely on millions of tonnes of imported materials for the next few years, said Tong Van Nga, deputy minister of construction. Construction on all cement plants is running between one and two years behind schedule, blocked by disagreements in bidding and delays in purchasing equipment, according to a report by the Ministry of Construction.. The result, Nga noted, is a serious shortage between stagnant production levels and increasing domestic demand.

This year Viet Nam will import close to 4Mt of clinker and with domestic consumption rising by an estimated 12 per cent annually, imports will keep increasing until new plants have opened.

The US$208 million Hai Phong Cement Plant, for instance, if completed as expected in 2005, will open five years after originally planned, with annual output of 1.4Mt.

The $229 million Tam Diep plant has met with a similar fate, having been under construction for five years before its expected 2005 opening.

Last year, the ministry and Viet Nam Cement Corporation planned to invest VND5.4 trillion ($360 million) in building factories, but only 40 per cent of the money was disbursed. Only a third of the VND1.5 trillion ($99
million) earmarked for the Central Construction Corporation¹s Song Gianh project has been used, pushing back the plant¹s projected opening next year. Several other projects ­ the namely Hoang Thach 3, Binh Phuoc, But Son 2 and Ha Tien 2.2 plants ­ face similar delays.

The chairman of the Construction Materials Association, Tran Van Huynh, said he is hopeful that most of the plants will start operating by 2005 and produce about 19 million tonnes each year. This still falls short of industry targets to produce 23Mt of cement per year by 2005 and 40Mt by 2010, goals which could only be reached were more clinker units to open.

Nga puts the investment required to build the needed dozens of cement projects at $5.5 billion through 2020. In the meantime, the Ministry of Construction has asked the industry to pick up the pace of construction this year and has proposed the Government to assign several prestigious local corporations ­ such as the Viet Nam Construction and Machinery Installation Corporation Lilama and Viet Nam Construction Import Export Corporation (Vinaconex) ­ to undertake large-scale cement projects to ease current delays (source: Vietnam News)