Vietnamese cement producers urged to cut costs

In a recent meeting with representatives of the state-owned Viet Nam Cement Industry Corporation Cement, Deputy Prime Minister Hoang Trung Hai urged cement producers to cut energy and other costs and restructure, in order to enhance their financial capacity and sharpen their competitiveness.

Hai emphasised that in this harsh economy, the sector faced an urgent need to diversify its products and markets in order to boost exports. The Deputy Prime Minister also urged the ministries of Finance and Construction to address foreign exchange fluctuations between the Vietnamese dong and the US dollar, which have eaten into the industry's profit margins.

There was also focus on the Viet Nam Cement Industry Corporation to work closely with the Ministry of Transport on its regional and provincial road-building programme, which would help to boost cement consumption.

Hai suggested he corporation strike an agreement with the Ministry of Industry and Trade to source raw materials and avoid the kinds of shortages that have halted production at a number of cement plants in recent months.

The cement industry as a whole was praised for reaching price targets set by the government this year, despite high inflation and rising input costs.

The corporation earned VND20.5 trillion (US$ 985.6 million) in the first nine months of the year, producing nearly 11 million t of clinker and 12.3 million t of cement. Its subsidiary companies have begun repaying debts incurred to finance construction of the Hoang Thach no. 3, Binh Phuoc, Bim Son and But Son no. 2 cement plants.

Due to soaring interest rates and the rising costs of raw materials, the corporation’s General Director Nguyen Ngoc Anh, acknowledged that the corporation would be unable to meet its pre-tax profit target for the year of VND1.25 trillion (US$ 59 million), having already suffered losses totalling VND7.8 billion (US$ 371 000) in the first nine months,

Demand for cement also declined dramatically in the third quarter, he said, compared to the same period last year, due to the effects of heavy rains on the construction season.

Read the article online at: https://www.worldcement.com/asia-pacific-rim/28092011/vietnamese_cement_producers_urged_to_cut_costs/