South Korean cement companies have agreed to increased their production by 35 per cent for the next three months to ease concerns over a supply shortage amid the crisis surrounding Ukraine, the industry ministry said.
During a meeting with government officials, seven major cement companies agreed to produce a combined 3.77Mt of cement in the 2Q22 up 35.7 per cent from the January-March period, according to the Ministry of Trade, Industry and Energy. The government also plans to provide around 380,000t of cement to the domestic market, though they are supposed to be sold overseas, it added.
The country is running out of cement reserves due mainly to the companies' growing investment in eco-friendly facilities and the unexpected growth in demand by builders, while global supply chains of bituminous coal used to make cement have been unstable due to the crisis surrounding Ukraine.
The companies have also sought to diversify their import channels of bituminous coal. Russian coal accounted for about 54 per cent of South Korea's coal imports in the first quarter, down from last year's 75 per cent, as companies increased the imports from Australia from last year's 25 to 46 per cent.
In a longer-term plan, the companies plan to reduce their dependence on soft coal to produce cement by using more eco-friendly materials. The government vowed to earmark KRW930.6bn (US$763.54m) by 2030 starting next year to support such moves.
"We will closely monitor the supply situation and boost consultations with related industries to ensure stable supplies of cement and other key materials," a ministry official said.
