Vietnam's Ministry of Planning and Investment has proposed export tax cuts on cement, while local producers struggle with high stockpiles, claims Viet Nam news. In a recent report submitted to the government, the ministry said that the export tax rate of five per cent on cement was too high.

The ministry estimated that no deduction on input VAT, coupled with five per cent export tax rate, pushed up prices of cement and clinker by US$7.50 and US$4.50/t, respectively.

The ministry proposed to the Ministry of Finance that it consider VAT deduction and export tax cut to remove difficulties for local cement producers.

According to the Ministry of Construction, supply in the local market exceeded demand by around 20 per cent, putting local producers into a lot of difficulties. Local producers were faced with fierce competition on both quality and prices not only in the export markets but also in the domestic market, especially from China.

The Vietnam Cement Association estimates that the total domestic production capacity has reached 86Mt, while the local demand was at 60Mt in 2017. By 2020, the cement industry might encounter a surplus of 36Mt to 47Mt, said Nguyễn Quang Cung, the association’s president.

According to Lê Văn Tới, Director of the Building Material Department under the Construction Ministry, no more cement production lines would be put into operation from 2018 and cement companies must have appropriate production and sales plans to avoid creating more pressure on the local market.

Statistics of the General Department of Customs showed that Vietnam exported 9.5Mt of cement and clinker, worth US$330m in the first half of this year.