Cement industry records impressive export growth (Source: VNA)
In August, Vietnam gained a year-on-year increase of 44% in cement export volume to 2.01 million tonnes, though the volume dropped slightly by 90,000 tonnes against the volume in July.
During the first eight months of this year, cement exports reached 20.09 million tonnes, exceeding the target of this whole year’s cement exports which was about 18-19 million tonnes, according to the Ministry of Construction’s Building Material Department.
The industry’s total cement consumption in both domestic and export markets stood at 63.85 million tonnes in the first eight months, a year-on-year increase of 30%. Of which, domestic consumption reached 43.76 million tonnes, a year on year surge of 3%, reported chinhphu.vn.
According to the department, the industry is likely to reach its target consumption of 65-66 million tonnes in the domestic market for the whole year.
Nguyen Quang Cung, Chairman of the Vietnam Cement Association, said that growth of cement consumption in the local market dropped from 2015. However, the cement industry expected a slight increase of 3 per cent for the year while the exports of cement would have better business results due to higher demand of importing cement from Vietnam to some markets like China and the Philippines.
In addition, over supply of cement in the future due to more projects and production lines coming into operation would force cement enterprises to promote cement exports, according to the association.
The Dau tu newspaper quoted Cung as saying that to deal with the situation of oversupply in cement, the association has proposed the Prime Minister direct slackening investment into cement projects from now to 2025, while promoting investment in renovation and increasing productivity and quality.
In 2017, the industry put into operation three big production projects, including Long Son 2 Cement in Thanh Hoa province with a capacity of 2.3 million tonnes per year; Thanh Thang Cement 2 in Ha Nam province with a capacity of 2.3 million tonnes per year; and Cement of Xuan Thanh 2 also in Ha Nam with an annual capacity of 4.5 million tonnes. Those projects raised the total designed capacity of the industry to 99 million tonnes.
This year, cement production capacity could reach 113 million tonnes.
Just three projects put into operation in 2017 have increased production by 9 million tonnes in total designed capacity, thus increasing competitive pressure on the local market.
Meanwhile, the list of cement projects that are expected to come into operation after 2018 are very large capacity projects, thus increasing the cement consumption pressure.
They include the Song Lam Cement’s production lines 3, 4 in the second phase of the Vissai Group with total capacity of 3.8 million tonnes per year; Thai Nguyen Group’s Ha Tien Cement Project in Binh Phuoc with annual capacity of 4.5 million tonnes; and Tan Thang Cement Project in Nghe An province with annual capacity of 1.8 million tonnes.