Cement industry expects to face steep export hurdles

Tuesday, Jan 06, 2015 07:39

The cement industry could face difficulties this year. — Photo baohaiquan

HA NOI (Biz Hub) — Viet Nam's cement exports could face challenges this year as most producers are operating on a small scale, thus forcing them to sell their products through middlemen.

Le Van Toi, Director of the Department of Building Materials under the Ministry of Construction was quoted as saying by online newspaper vov.vn that Vietnamese cement enterprises have been unable to sign long-term contracts, even though their value is higher than short-term contracts.

Toi added that local producers had thought that exporting cement was seasonal work or a temporary solution for the problem of low consumption in the domestic market.

Data from the ministry showed that last year, Viet Nam shipped 19.5 million tonnes of cement and clinker, about four million tonnes exceeding the target set for 2014. Of this, the exported clinker was pegged at 15.24 million tonnes and cement at 4.44 million tonnes. The country earned US$800 million from the exports. The export price for cement and clinker currently stands at $43.155 per tonne, up $2 compared with previous years.

Cement consumption in the domestic market has touched 50.9 million tonnes, posting a 10 per cent year-on-year increase.

After four years of exporting cement, local producers have learnt their lessons by exploiting markets, indulging in contract negotiations, and especially by connecting with each other.

Toi said cement consumption this year will depend on the extent of construction, which has been heavily impacted by the current economic situation.

He also predicted that demand for Vietnamese cement consumption in both the domestic and foreign markets will hit between 71 and 73 million tonnes and rise from 4 per cent to 7 per cent, compared with 2014.

Exports will remain at the same level as last year. In 2013, cement and clinker exports had touched 15 million tonnes.

Indonesia is the largest importer of Vietnamese cement and clinker, followed by Malaysia, Bangladesh, Taiwan (China), the Philippines, as well as Cambodia. — VNS

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