Displaying items by tag: Vietnam

Vietnam: Cement producers in Vietnam are reported to be facing a ‘double whammy’ due to falling domestic demand from a slowdown in the domestic property and infrastructure sectors, as well as a marked decline in exports due to the ongoing Novel Coronavirus (COVID-19) epidemic.

However, Nguyen Quang Cung, chairman of the Vietnam Cement Association (VNCA) said that demand is expected to remain high throughout 2020 as a whole. The Ministry of Construction (MoC) currently stands by its autumn 2019 forecast that Vietnam will produce 103Mt of cement during 2020. It expects domestic consumption to be around 70Mt, with exports of 33Mt.

To help firms overcome the current difficulties, Cung proposed that the government, the State Bank of Vietnam and other parties offer support to manufacturers in the form of tax cuts and lower interest rates.

Global Cement is sceptical that Vietnam’s cement producers will meet the MoC’s 2020 forecast. In January and February 2020 the country’s domestic sales were 40% lower year-on-year compared to 2019, while exports fell by 49% year-on-year.

Vietnam: Producers exported approximately 2.82Mt of cement in January and February 2020, down by 49% year-on-year from 5.75Mt in the corresponding period of 2019. Vietnam News has reported that this is a result of the coronavirus outbreak. In February 2020 Vietnam’s Ministry of Construction said that Vietnamese cement exporters would face fierce competition as China and Thailand increase exports over the coming year.

Vietnam Cement Association president Nguyễn Quang Cung previously predicted that Vietnamese cement exports would hold steady at 34.0Mt in 2020 before falling by 26% to 25.0Mt in 2021 as a forecasted rise in domestic demand reduces the reliance on low-priced exports. China remains the primary importer of Vietnamese cement, which it buys at US$36.3/t. Domestic demand fell by 37% year-on-year to 2.88Mt in January 2020 from 5.43Mt in January 2019, according to Arab News.

Production rose by 0.1% year-on-year to 13.0Mt in January and February 2020 from 12.9Mt one year previously.

Vietnam: Xuan Thanh Cement has ordered seven liquid starters from AKA. The plant in Ha Nam Province has a cement production capacity of 5.5Mt/yr from two production lines. The most recent production line was supplied by Denmark’s FLSmidth. France’s AKA supplies a variety of liquid starters, electronic starters and power controllers for industrial end users.

Vietnam: Vietnamese cement production rose by 0.1% year-on-year to 13.0Mt in January and February 2019 from 12.9Mt in the opening two months of 2018. Vietnam Daily News has reported that February was an especially voluminous month for production. The country produced 6.7Mt of cement over its 29 days, up by 18.6% year-on-year from 5.6Mt in February 2018.

Two new plants, with a shared capacity of 7.1Mt/yr, are due in 2020.

Vietnam: A Memorandum of Understanding (MoU) to build public private collaborations towards a circular economy for plastic waste management was signed in Hanoi on 19 February 2020. The agreement, the first of its kind in Vietnam, was signed by the Ministry of Natural Resources and Environment, Dow Chemical Company Vietnam, Siam Cement Group (SCG), and Unilever Vietnam International.

Deputy Minister of Natural Resources and Environment Vo Tuan Nhan said the average use of plastic per capita in Vietnam is not as high as that of developed countries in the world. However, with a population of nearly 100 million and an incomplete solid waste management infrastructure, plastic waste has been a big challenge for developing countries like Vietnam. It is likely that SCG will act as an off-taker of non-recyclable plastic residues, burning them as an alternative for fossil fuels in its cement kilns.

Vietnam: Cement and clinker production in Vietnam is expected to rise by 4-5% to 101-103Mt in 2020, according to the Ministry of Construction. This includes domestic consumption of 69-70Mt and exports of 32-34Mt.

Chairman of the Vietnam Cement Association Nguyen Quang Cung said that cement demand has expanded at higher pace compared to GDP growth in previous years. He added that cement producers will have to face major challenges in 2020, with rising input costs, environmental and technological issues, as well as increasing wage costs.

Meanwhile, the Ministry of Construction said that Vietnamese cement exporters would face fierce competition as China and Thailand increase exports. It recommended that domestic firms study market trends to adjust their production plans, stabilise cement prices and map out long-term business strategies.

The ministry has asked the Ministry of Industry and Trade to direct the Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) to provide sufficient coal, and the Vietnam Electricity to ensure adequate power for cement production activities.

Vietnam: The Vietnam National Cement Corporation (Vicem) and Denmark-based supplier FLSmidth have announced a cooperation agreement with the aim of radically reducing the greenhouse gas emissions from cement production and improving air quality. The cooperation will consist of Vicem implementing solutions pioneered by FLSmidth. FLSmidth said that a key focus of the cooperation will be Vicat’s use of ‘municipal and other waste streams as alternative fuel sources,’ with the aim of achieving 100% substitution using FLSmidth solutions, in accordance with FLSmidth’s ambition ‘to enable cement companies to operate with zero emissions by 2030.’

There have been rumours in the press this week that LafargeHolcim is weighing up its options in South Africa. Reports in the local press allege that the building materials company has tasked Credit Suisse Group with finding a buyer for its business. This may or may not be true, only time will tell, but South Africa certainly feels like a market where LafargeHolcim should be considering its future.

As a prominent but smaller producer in the country, Lafarge South Africa is behind PPC and AfriSam in terms of clinker production capacity. InterCement’s subsidiary Natal Portland Cement and Dangote’s subsidiary Sephaku Cement have a similar production base with an integrated plant each and one or two grinding plants. Halfway through 2019 LafargeHolcim was describing market conditions as ‘difficult’ in the country with it being the sole Sub-Saharan market holding back regional growth for the group. By the third quarter the situation had reportedly improved but net sales and cement sales volumes were flat for the year to date. A clearer picture should emerge when LafargeHolcim publishes its fourth quarter results at the end of February 2020.

PPC provided its view of the market in its half-year results to 30 September 2019. Its estimate was that the South African cement industry declined by 10 - 15% for the period, creating a competitive environment. It added that the situation had been, ‘exacerbated by imports and blender activity.’ Both its revenue and earnings fell year-on-year, although a 30% rise in fuel costs didn’t help either. Sephaku Cement suffered a similar time of it, with a 19% fall in cement sales volumes during the first half, although it reported improvement in the subsequent quarter. Overall, it blamed falling infrastructure investment for pressurising the market and allowing blending activity to mount. Sephaku Cement was also wary of the local carbon tax that started in June 2019 warning of a potential US$2.8m/yr bill.

PPC noted that cement imports had risen by 5% to 0.85Mt in the year to August 2019. This followed a lobbying effort by The Concrete Institute (TCI) in mid-2019 to implore the International Trade Administration Commission (ITAC) to look into rising imports levels. At the time the TCI’s managing director Brian Perrie expressed incomprehension that a country with six different cement production companies with an over-capacity rate of 30% could be facing this problem. This latest broadside tails South Africa’s previous attempt to fend off imports when it instituted anti-dumping duties of 17 – 70% against importers from Pakistan in 2015. Imports duly fell in 2016 but rose again in 2017 and 2018, mainly from Vietnam and China.

All of this sounds familiar following LafargeHolcim’s departure from the ‘hyper-competitive’ South-East Asian countries in 2019. Those countries also suffered from competition and raging imports. Bloomberg pointed out in a report on the local industry in 2016 that PPC’s, AfriSam’s and LafargeHolcim’s kilns had an average age of 32 years, suggesting that efficiency and maintenance were going to be concerns in the future. Also of note is LargeHolcim’s decision to move its South African operations from one subsidiary, Lafarge Africa, to another, Caricement, in mid-2019.

Some level of market consolidation would certainly help local overcapacity. Plus, surely, LafargeHolcim’s mix of inland integrated capacity and a grinding plant near the coast could prove enticing to some of the Asian companies pumping out all of those imports. The thought on the minds of potential buyers everywhere must be, if LafargeHolcim chief Jan Jenisch was bold enough to sell up in South-East Asia, how can he not in South Africa?!”

Vietnam: Thailand-based Siam Cement Group (SCG) said its revenue from sales in Vietnam dropped by US$64.7m in 2019, a fall of 5.8% year-on-year to US$1.27bn. The figure accounted for 9.0% of SCG’s total revenue of US$14.1bn for the year. In the fourth quarter of 2019, SCG earned US$319m in revenue in the Vietnamese market, a fall of 11% year-on-year, appearing to indicate acceleration in the rate of decline. A possible contributing factor to the lower sales is Vietnam’s huge cement overcapacity, although SCG operates across a wide range of other sectors in addition to cement production.

Vietnam: Maintaining exports will be critical for the Vietnamese cement industry amid rising production output and anticipated sluggish domestic sales in 2020, according to Nguyễn Quang Cung, President of the Vietnam Cement Association (VCA).

Cung also reported that two new cement plants will go into operation during 2020: a 2.5Mt/yr plant in Tân Thắng Commune in the central province of Nghệ, and a 4.6Mt/yr plant in Bỉm Sơn Commune, Thanh Hóa. These new facilities will give the domestic cement industry a total production capacity of more than 100Mt/yr, with local demand estimated to be closer to 70Mt/yr. “Maintaining exports will be critical for the cement industry this year,” said Cung, but domestic projects are likely to remain ‘sluggish’ due to stagnant infrastructure projects.

Over the medium term, Cung said that cement exports would fall to 25Mt in 2021 form 34Mt in 2020, based on an expectation that domestic sales will increase.