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Restructuring the cement industry in Vietnam

World Cement,

Vietnam’s Ministry of Construction is drawing up a master plan for the restructuring of the country’s cement industry to 2015 and onwards to 2025. The draft is expected to be finished and submitted to the government for approval towards the end of this year.

At present Vietnam’s cement industry is experiencing an over-supply crisis where supply has surpassed demand and exports are proving difficult to achieve. Cement producers who are facing an excess of 2 million t this year are finding it impossible to export their product.

Three joint venture companies in the north who were requested to export 30-40% of their products by the Ministry of Construction in mid-July said that there are few markets left and shipping overseas is unprofitable. The Nghi Son Cement company in Thanh Hoa with an annual output of 4.3 million t has totally relied on the domestic market for a long time, shipping half of its output to southern provinces each year.

The neighbouring markets of Laos and Cambodia are already dominated by cement inputs from Thailand and China where prices are more competitive. Local cement manufacturers will have to turn to Africa, the US or the Middle East, but the long distances and high shipping costs are making exports unviable.

Meanwhile the Thang Long Trading Investment JSC has broken ground for the new Thanh Son Cement plant in the north-central province of Thanh Hoa which will be built at an investment cost of US$ 78.94 million. The capacity will be 2500 tpa of clinker and it is expected to begin operating in the third quarter of 2011.

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