Vietnamese cement producers come under pressure

Cement producers in Vietnam are facing a double challenge with domestic demand falling due to a slowdown in the property market, and delays in transport infrastructure works and exports declining due to the COVID-19 pandemic.

The forecast had been for exports of around 34Mt this year, but the epidemic has put paid to those hopes since China used to be the main clinker importer, said Nguyen Quang Cung, chairman of the Vietnam Cement Association (VCA). Cement and clinker exports in the period were down 30 per cent in January and February 2020. 

Domestic sales in the first two months of this year were down 40 per cent YoY. Bim Son Cement JSC reported a 55 per cent YoY fall in profits in the last quarter to VND26.8bn (US$1.2m). Vicem Hoang Mai Co reported an 11 per cent fall in revenues and a 53 per cent slump in profits.

Last year the Ministry of Construction had forecast demand this year to be 103Mt, with domestic consumption accounting for around 70Mt, and it has yet to revise it.

The VCA has petitioned the government to cut taxes and bank lending to ease the financial pressure on Vietnamese cement producers.