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Vietnam’s cement oversupply may reach 36-47 million tons by 2020
Linh Pham 17:38, 2018/11/06
At present, Vietnam is home to 82 cement production lines with a combined capacity of 110 million tons per year. The capacity may reach 120-130 million tons/year by 2020 and the production completely outstrips national demand, according to VNCA.
The Vietnamese Cement Association (VNCA) has warned that the country’s cement output might exceed the demand by 36 to 47 million tons by 2020 due to expanding capacity from now through the year.  
 
A cement production line. Photo: Internet
A cement production line. Photo: Internet
At present, Vietnam is home to 82 cement production plants with a combined capacity of 110 million tons per year. The capacity may reach 120-130 million tons/year by 2020 and the production completely outstrips national demand, according to VNCA. 

A report by the General Department of Vietnam Customs show that the country exported nearly 23.4 million tons of cement and clinker worth US$891 million in the first three quarters of this year, up 73.7% on year in volume and 87.5% in value. The importers included Taiwan (China), Malaysia, the Philippines, Peru, Mozambique, and Bangladesh.

In an effort to tackle the overcapacity, the VNCA has proposed the government halt the investment in cement production projects from now until 2025, improve capacity, and apply hi-tech to use waste materials and renewable energy that helps protect the environment. 

Earlier, the Ministry of Construction has completed the plan on the development of cement industry for the 2017-2025 period and vision to 2035 with a highlight to limiting new projects while focusing on updated technologies and capacity expansion and unbaked materials. 

Cement producers must apply newest technologies to raise capacity for export and make full use of energy for electricity generation, the association suggested. 

However, Vietnam’s cement is low-priced compared to that from regional countries, between US$48-50/ton of civil cement while that Thailand’s is around US$65/tons, the Philippines’ cement is roughly US$100/ton and that from Indonesia is priced at US$102/ton, Vietnam Cement Industry Corporation (VICEM) said at a government meeting held in April 2018. 

“Vietnam is selling natural resources at dirt prices”, Head of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung exclaimed. 

Regional countries like Thailand have stopped licensing cement projects over the past decade and invested in cement facilities in Vietnam. Meanwhile, China has turned to import clinker in recent years instead of being the world’s largest clinker supplier before.   

Economist Tran Dinh Thien said that Vietnam is going against the global trend by building more cement production lines. 

Local experts said that the government should not encourage such a resource-intensive industry and have effective measures to protect the environment. 
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