HANOI: While the cement industry was struggling with an excess of supply over demand, exports, which were considered a solution to boost consumption, failed to meet expectations. Cement and clinker exports in 11 months of this year dropped by 27 per cent over the same period last year to roughly 15 million tonnes, far below the target of 20 million tonnes for the full year.
The cement industry faced harsh competition from China, the world’s biggest cement producer, which accounted for 60 per cent of the world’s total output and selling at lower prices.
Luong Quang Khai, chairman of Viet Nam Cement Industry Corporation (Vicem), which held a 35 per cent share of the domestic market, said that Vicem’s cement export could only meet 60 per cent of the full year’s target. Vicem set goal of exporting 3.5 million tonnes cement and clinker this year, the same as last year.
Khai said that Vicem did not want to lower prices to boost exports as doing this would affect other procedures and the entire industry. A representative of The Vissai, the country’s leading cement exporters, said it would be difficult to achieve the same cement export results as the previous year.
Previously, the Ministry of Construction estimated that total cement sales would reach between 72 million and 74 million tonnes this year, up 4 per cent over 2014, in which exports would be at around 20 million tonnes. The ministry forecast that cement exports would fall to around 16 million to 17 million tonnes next year and the total cement sales would be between 75 million and 77 million tonnes.
To date, there were 76 cement production lines in the country with a total design capacity of 81.56 million tonnes per year which would then increase to more than 98 million tonnes in the next five years. As a result, the industry was anticipated to continue facing an excess of supply over demand in the domestic market. The ministry urged cement producers to reduce production costs and improve its distribution network to lower prices.
