LafargeHolcim considering Vietnam exit

LafargeHolcim Group, a joint venture between Swiss Holcim Ltd. and French Lafarge Group, may withdraw from Vietnam due to oversupply of cement in the domestic market, said Nguyen Cong Bao, general director of Holcim Vietnam, a subsidiary of Holcim Ltd.

The group had a meeting with the Vietnamese Ministry of Construction to notify of the group’ business plans in Vietnam for the coming time, Mr. Bao was quoted by Dau Tu newspaper as saying Wednesday.

According to the newspaper, Vietnam Cement Industry Corporation (Vicem), the country’ leading cement producer, is holding 35 per cent stake of Holcim Vietnam.

In December 2015, Lafarge Vietnam, a subsidiary of French Lafarge Group, officially merged with Holcim Vietnam to form LafargeHolcim, which is currently the largest multinational cement producing company in the world by installed capacity.

LafargeHolcim is present in 90 countries and focuses on manufacturing cement, aggregates, and concrete.

In Vietnam, the post-merger LafargeHolcim has five cement plants and eight ready mixed concrete plants, with an annual capacity of 6Mt of cement and 1Mm3 of concrete per year, overtaking Nghi Son Cement Corporation and Phuc Son Cement Company as the largest foreign-invested cement producing company in Vietnam.

The firm retains the brands of Lafarge and Holcim’ products, namely Lavilla (Lafarge) and Holcim Power-S (Holcim). Holcim Vietnam presently holds a 26 per cent of domestic market share, while Lafarge Vietnam takes another 12 per cent, with their main products being cement, concrete, and aggregates.

At present, Vietnam has 76 cement production lines with a combined annual output of 81.56Mt while the consumption demand in 2016 is estimated between 75Mt and 77Mt, data from the Ministry of Construction showed.