Vietnam facing 6Mt surplus by year-end

Vietnam is projected to face a surplus of 6Mt of cement this year, the Vietnam Cement Association (VNCA) said.

Domestic output is expected to reach between 60-62Mt, outstripping forecasted full-year domestic sales of 47-48Mt and exports 7-8Mt forecasts, the association was quoted by the financial website CafeF as saying Tuesday.

Do Duc Oanh, general secretary of the association, saying that the industry’s high inventory is its biggest challenge. It has resulted in producers cutting prices despite rises in input costs.

The situation was even worse as most cement producers depended on bank loans while lending interest rates remained high. In an effort to help local cement producers overcome difficulties, the VNCA recommended the Government to restructure repayment periods for foreign and domestic loans.

The association also suggested the Government reducing the lending interest rate to between 10% and 12% along with reducing the value added tax to 5% to ease financial hardships.

As well as measures to boost cement consumption, the Government has also been called upon to decide whether to extend, postpone or even stop the construction of new cement projects to avoid a higher inventory, Oanh said.? If the industry’s development plans were not considered carefully, the country would continue struggling with surplus stock, he added. (Sourc: Vietnam News Brief Service)