Vietnam cement exporters fail to hit target

Vietnamese cement producers are struggling to maintain high volumes of cement exports due to falling overseas demand.

According to the Vietnam National Cement Association (VNCA), Vietnamese cement makers have been facing fierce competition from China, the world’s biggest cement producer, which accounted for 60 per cent of the world total output.

Selling at lower prices and trying to boost export whilst facing tough times domestically have led to a spreading malaise across the Asian market, the association added. Competition from overseas producers has prevented Vietnamese cement makers realising this year’s export target of over 20Mt of cement and clinker.

Luong Quang Khai, chairman of Vietnam Cement Industry Corp (Vicem), the country’s leading cement producer which holds 35 per cent of the domestic market, said that its cement exports could only meet 60 per cent of the full-year’s target of 3.5Mt.

Nguyen Tien Dat, general director of Vissai Cement Group, another major cement and clinker exporter, said that the group was unlikely to attain the same goal set last year.

He claimed that cement exporters from Vietnam were struggling with the rising input cost while the import demand from overseas markets showed no sign of improvement.

Meanwhile, ports in Vietnam used to export from have not yet upgraded to handle large vessels over 20,000dwt. Vietnam’s cement companies must also export via free on-board (FOB) contracts, losing the competitive advantage compared to other peers in the region, including Thailand and China, according to cement analysts StoxPlus.

Vietnam has become the fifth-biggest cement producer and consumer in the world behind China, India, Iran and the US.The country now has 76 cement production lines with a combined output of 81.56Mta.
The Ministry of Construction forecast that Vietnam's sales of cement and clinker will rise 4-7 per cent on year to between 75-77Mt in 2016 despite persistent economic woes.