Vietnam new plants to add pressure to existing surplus

Despite the Vietnam cement sector witnessing an over-supply scenario, this year the country is set to see a further 7Mta of new capacity from government-approved projects enter the market.

Local press quoted the chairman of the Vietnam Cement Association (VNCA), Nguyen Van Thien, as saying that seven or eight new projects may come on-stream this year if project deadlines are met. These projects all belong to the cement industry development plan approved by the government, Thein told Tuoi Tre press.

“In terms of design capacity, the industry’s production capacity will be 77Mta, exceeding the actual consumption capacity of only ~50Mt.” Last year, demand hit 49.5Mt, 1Mt less than 2010. his year will be about 60 million tonnes, of which, 53 million tonnes will be for local consumption and the remainder for export.

Under the Ministry of Construction' rules, joint ventures will have to export 30-40 percent of their total output.

The new plants are set to exacerbate the current situation and producers are now looking to increase export markets to offset the over-supply.