Illustrative image (Source VNA)Hanoi (VNS/VNA) - Thecement production industry may face increasing pressure from an anticipatedexcess of supply over demand, although the industry posted good sale resultsthis year.
The Ministry of Constructionestimated cement and clinker sales at 95-96 million tonnes for the full year of2018, up by 12 percent over the previous year.
For 2019, sales of cement andclinker are expected to post a year-on-year increase of 6-8 percent to reach98-99 million tonnes.
According to the ministry, thetotal production capacity of the cement industry would reach 101.74 milliontonnes in 2019, after two production lines are put into operation, bringing thetotal number of lines to 84 throughout the country.
The Vietnam Cement Associationpreviously estimated that upgrades and new investments would increase theproduction capacity of the industry to 120-130 million tonnes by 2020, whiledemand, including both domestic sales and exports, would be around 30 tonneslower.
Recently, Prime Minister NguyenXuan Phuc asked the Ministry of Construction and the Vietnam Cement IndustryCorporation to review and report on the production capacity of the industry,new investments and market demand.
Sales of cement and clinker in theJanuary-November period far exceeded the target for the full year.
According to the ministry’sDepartment of Building Materials, sales in the 11-month period reached 94.97million tonnes, up by 44 percent over the same period last year and 12 percenthigher than the annual target.
Domestic sales reached 66 milliontones, equivalent to the plan for the full year. However, exports reached 28.97million tonnes, 65 percent higher than the target.
According to the ministry, cementand clinker exports would total 29-30 million tonnes this year, up by 50 percentover last year, with revenue hitting the 1 billion USD threshold, at 1.17billion USD.
Nguyen Quang Cung, the cementassociation’s president, said that cement exports had increased after Chinashut down polluting cement plants and forced some to cut production.
Exporting excess cement was asolution when production is much higher than domestic demand.
However, a significant increasein the export of cement faced problems when the Government asked for a limit onthe export of natural resources.
Another problem was that Vietnam’scement export price was low, at around 48-50 USD per tonne, compared to othercountries such as Thailand (65 USD), Indonesia (102 USD) and the Philippines (100USD).
An expert said that exportinglarge volumes at low prices was a waste of natural resources.
In May, the Government issuedDocument No 4721/VPCP-CN asking the ministries of construction and finance tocome up with solutions to improve the efficiency of natural resources, energyand labour productivity in the cement industry as well as limiting exports.
This aims to make the cementindustry focus more on the domestic market for sustainable development.
Also in May, the Government askedthe construction ministry to design a development strategy for the cementindustry to 2030, to ensure balanced supply and demand.
The construction ministry saidthe top priority would be given to completing the compilation of the strategyfor approval.
In addition, the ministry wouldenhance the application of science and technology to reduce production costs,promote energy and resources savings, and reduce the environmental impact ofcement production.-VNA
VNA
