Vietnam Ministry toughens stance on cement projects

Vietnam’s Ministry of Construction is to temporarily delay work on several approved cement projects, Le Van Toi, the director of the ministry’s Construction Materials Department.

Projects must follow the cement industry development strategy 2011-20, ratified by the Prime Minister last year, and must also be agreed upon by the ministry’s managerial body.

Toi said the ministry had recently sent directives to the People's committees of cities and provinces nationwide to prevent the authorities from licensing new cement production projects.

The move has been made due to surpluses expected this year. According to the Viet Nam Cement Association (VCA), the country's total cement output this year will reach 60Mt, roughly 10Mt higher than domestic demand.

The country has seen overwhelming investment in the cement industry for the past several years. The construction ministry reported there were currently 60 cement production plants nationwide.

Toi also noted that many cement producers were facing losses due to decreasing consumption and high interest rates.

"Many cement producers have had to borrow up to 80 per cent of their total investment capital and that eats most of their profits when interest rates remain high," Toi said.

Source: Thai News Service