Minister denies cement crisis from Master Plan

Minister denies cement crisis from Master Plan
Published: 13 June 2012

Tagged Under: Vietnam 

Vietnamese Construction Minister Trinh Dinh Dung has denied that the cement industry's master development plan (2011-20) is causing a crisis goes in line with market movements.

Last year, Vietnam's cement consumption was reported to account for 89% or 55Mt of total output, Dung noted. “I confirm that there is no cement crisis caused by the development scheme as raised by some people.”

The country’s current huge surplus is caused by the low consumption demand. The government’s Resolution No.11 to cut public investment also leads to low consumption demand of building materials, including cement.

Vietnam’s cement consumption is forecast to reach between 55Mt and 56Mt this year, rising 11% and 12% from a year earlier, respectively, accounting for 80% of the output. The cement industry is facing difficulties under the gloomy outlook for all business sectors.

“We can’t say that the cement development plan triggers an oversupply crisis,” said Dung.

Vietnam must stick to Asean Free Trade Area (AFTA) commitments, which stipulated ASEAN members cannot impose import bans or tariff barriers on cement. Furthermore, market forces prompt cement imports, he explained for cement imports amid surplus.

Cement is mainly produced in the North, resulting in high cement price in the South due to transport fees. Sometimes, the price of local products gets higher than that of products imported from Thailand.

“In a market economy, the country must import goods from overseas markets at competitive prices if domestic production shows low efficiency,” said the minister.

 (Source: Vietnam News Brief Service)