Vietnam sees cement demand pick up

The Vietnam National Cement Association (Vicem) says domestic cement consumption in the first five months of 2014 reached 20.42Mt, up 9.3 per cent on the same period last year.

In the last month alone, cement consumption in the country was estimated at 4.87Mt, increasing 12 per cent against May 2013.

The association chairman, Nguyen Quang Cung, predicted that domestic cement consumption this year would reach 50Mt, which would be equal to the 2010 volume, the highest level so far.

Vietnam shipped nearly 2Mt of cement and clinker last month. The amount of exported cement in the five-month period was estimated at around 7Mt, posting 42 per cent YoY increase. The forecast for cement exports this year was expected to be 20Mt.

Many domestic cement companies have posted strong results. FiCO Tay Ninh Cement JSC deputy general director, Trang Thanh Ba, said that: "Market demand has increased strongly and all plants currently have run at 100 per cent capacity."

According to statistics, in the first four months of this year, FiCO Tay Ninh Cement sold 0.45Mt of cement, an increase of 10 per cent compared to the same period last year. In terms of the southern market, the company would provide about 1.5Mta of cement.

Vicem Ha Tien 1 Cement Joint Stock Co said that its cement consumption in the first five months of this year increased compared to the same period last year. The company plans to sell about 4.9Mt of cement and about 0.8Mt of clinker in 2014.

However, the association said there were 70 investors who had poured capital into the sector. The number was too high as the country's total cement output has been between 65 and 70Mt, five to seven times higher than other countries in the region.

A number of areas with rich limestone reserves such as Ha Nam, Ninh Binh and Thanh Hoa, along with Quang Ninh and Hai Phong are expected to be advantageous for the cement industry. The location of the cement projects and financial capacity of investors will play a key role in the planning of the cement industry.

The government has removed nine unfeasible projects from the development plan of the country's cement industry in 2011-20, as several investors were found incapable of financing their projects.