Vietnam's cement industry leaders call for action following 42 line stoppages

Production in the Vietnamese building materials sector has seen a sharp decline, with the Ministry of Construction reporting significant drops in both production and sales throughout 2023 and the first eight months of 2024. The cement industry, in particular, has been hit hard, with total production for 2023 reaching only 92.9Mt when compared with a capacity of 122.34Mta. This shortfall led to 42 out of 92 production lines being halted for up to six months, with some ceasing operations entirely. The trend has continued into 2024, with cement plants operating at just 70-75 per cent of their designed capacity and inventories exceeding 5Mt.

The downturn in production is attributed to a slump in the real estate market, reduced construction investment, and delays in infrastructure projects. "The building materials industry has faced numerous difficulties, leading to stagnation in production and business activities, which negatively impacts the country’s socio-economic development," said Deputy Minister of Construction, Nguyen Van Sinh.

The Ministry of Construction highlighted that domestic demand for building materials remains strong due to the country’s ongoing urbanisation efforts and infrastructure needs. With national urbanisation set to reach 70-75 per cent by 2050, the construction of additional housing, transportation and energy infrastructure will require significant quantities of cement and other materials.

To address these challenges, the ministry recommended increasing public investment and infrastructure development, resolving issues in the real estate market, and expediting the construction of social housing units. Additionally, the ministry suggested greater use of reinforced concrete viaducts in highway projects to help absorb the current cement inventory.

Deputy Prime Minister Tran Hong Ha has signed 'Directive 28/CT-TTg', which sets out measures to tackle the challenges facing Vietnam's cement, steel and building materials industries. The directive aims to boost production and consumption, focusing on efficient and sustainable development to meet domestic demand while increasing exports of high-value products.

Industry leaders have echoed these calls for action. Tong Van Nga, chairman of the Vietnam Building Materials Association, emphasised the importance of including worker housing in industrial zone plans, which could positively impact the building materials market. Meanwhile, Le Quang Hung, chairman of the Vietnam Concrete Association, believes that increasing the construction of viaducts on national highways could absorb 70-80 per cent of current cement inventory.

For sustainable development, Pham Van Bac, vice chairman of the Vietnam Building Materials Association, recommends that the government create policies to foster investment in new, advanced building materials that are economically valuable, energy-efficient, and environmentally friendly. As Vietnam pushes forward with its ambitious urbanisation and infrastructure goals, these efforts will be crucial in reviving the cement industry and ensuring it meets both domestic and export demands.