Vietnam: three new plants intensify competition

In 2016 Vietnam's cement industry has added three new production lines, bringing the total capacity to 88Mta, significantly ahead of the country's 59-60Mt cement consumption, and representing an increase of approximately six per cent compared to 2015, reports local media. 

The new lines of Vissai Cement Group Co Ltd and at Long Son Cement, located next to each other in the province of Nghe An, Thanh Hoa, and the market launch of their products in the same time, caused further pressures in a market already suffering from oversupply.

According to calculations of the Vietnam Cement Association, in 2017, the Thanh Hoa region is expected to witness a race for market share by current cement producers.

In addition, the Tan Thang Cement Project in Quynh Luu district, Nghe An, will see the commissioning of 2Mta of extra capacity by the end of 2017, placing further pressure on the market.

The plight of domestic producers is further worsened by lower exports, which fell from 17Mt to 15.5Mt YoY. Intense competition from Thai and Chinese producers have resulted in export price decreases of 8-13 per cent having only limited effect to boost exports.