Displaying items by tag: Vietnam
Cement importer says Philippines faces shortages to 2020
25 September 2017Philippines: A gap between local production and demand is expected to lead to a deficit in cement for the next three to four years to 2020. Napoleon Co, president and owner of cement importer Cebu Oversea Hardware, told the Manila Bulletin newspaper that imports from China and other countries in the Association of Southeast Asian Nations (ASEAN) should be able to address the shortfall until new production capacity is built. Co added that the country imported 6Mt of cement in 2016 mainly from China and Vietnam. Similar or higher volumes of imports are expected in 2017.
Cement importers have been lobbying the Department of Trade and Industry to allow pre-shipment inspection and certification of cement. However, local cement producers have opposed the change.
Vissai Cement launches BillerudKorsnäs bag line
20 September 2017Vietnam: Vissai Cement has launched QuickFill Clean (QFC) cement paper bags at its Vissai Ninh Bình cement plant. The bags are produced by Sweden’s BillerudKorsnäs. Vissai and BillerudKorsnäs signed a letter of intent about the packaging in April 2017, according to the Viet Nam News newspaper. Under the agreement, Vissai will become the only company to use BillerudKorsnäs cement packaging in Vietnam for a period of two years.
Vietnam: Ha Tien 1 Cement has warned that a local government scheme in Ho Chi Minh City to replace cement grinding plants with distribution terminals could cost US$62m. The cement producer made the comments as part of a discussion on the development of building materials in the city, according to the Saigon Times newspaper. The government plans to shut down the cement pants on environmental grounds and to move them out of the city.
At present Ho Chi Minh City has 10 cement grinding plants and terminals with a capacity of over 10Mt/yr but this is below the city’s requirements. By 2020, the city may have a shortfall of 3.3Mt/yr. The city plans to build three terminals with a capacity of 1.2Mt/yr each. However, Ha Tien 1 Cement said that transport and loading fees would be huge as the city will require ships to transport cement from northern ports. In addition, the city will have to build special ports to receive bulk cement shipments from the north as the majority of the ports have no facilities for bulk cement.
Long Son opens second production line at cement plant
08 September 2017Vietnam: Long Son has started operating its second production line at its Long Son cement plant in Thanh Hoa province. Following the upgrade the unit has increased its cement production capacity to 5Mt/yr from 2.5Mt/yr, according to the Viet Nam News newspaper. Following the opening of the new line the site has become one of the largest cement plants in the country.
Vicem appoints Bui Hong Minh as general director
06 September 2017Vietnam: The Vietnam Cement Industry Corporation (Vicem) has appointed Bui Hong Minh as its general director. He was previously the deputy general director of the company, according to the Viet Nam News newspaper. He replaces Tran Viet Thang who has been relieved from the role following allegations of business malpractice.
Minh, aged 46 years, has held the position of deputy general director at Vicem since 2013. Prior to that, he worked at the But Son and Ha Tien cement companies.
Pacific Cement prepares for upgrade project
06 September 2017Fiji: Pacific Cement plans to shut down for three weeks in September 2017 for upgrade work including installing a new cement mill motor, trunnion gear, dust collectors and sensors. The company has confirmed to the Fiji Times newspaper that all the parts for the project have arrived on site. It expects at least 15 engineers and technicians from Australia and New Zealand to work on the repairs. Company director Sowani Tuidrola added that the cement producer has imported 25,000t of cement from Vietnam to meet market demand.
Siam City Cement wants to expand within Vietnam
08 August 2017Vietnam: Thailand’s Siam City Cement Group wants to expand investment in the production and supply of construction materials and waste treatment in Vietnam’s southern Dong Nai Province, according to its local CEO Philippe Richart.
At a working session with the provincial People’s Committee in Dong Nai on 8 August 2017, Richart noted that the group has invested in the former Holcim cement plant in Nhon Trach district and will expand the plant in the future. He added that the company will also invest in an industrial dry mortar plant and a transit station for construction materials in Dong Nai. It is also focusing on waste treatment, he said, adding that the group is using the latest technologies in this field.
Vice Chairman of the provincial People’s Committee Nguyen Quoc Hung cited a number of key projects being carried out in the locality such as major expressway projects and the Long Thanh airport, which will be launched in 2019. It is expected that cement demand will increase significantly in the local area due to these and smaller developments.
Pacific Cement to import cement from Vietnam
02 August 2017Fiji: Pacific Cement plans to import 25,000t of cement from Vietnam due to supply shortfalls from local plants. The increase in demand has been attributed to increased construction activity in the country, according to the Fiji Sun newspaper. Pacific Cement is currently running at reduced production levels whilst it waits for spare parts to arrive. It plans to return to full production in October 2017. The producer is also wants to install a cement mill in early 2018 to increase its production capacity.
Cement overload in Vietnam
26 July 2017Last week we looked at the prospect of two new Angolan cement plants, a situation that will reportedly lead the country to being ‘self sufficient in cement.’ When we hear this phrase, very often from relatively small markets in Africa or Asia, the obvious next step invariably follows: The country in question will become a regional powerhouse for cement exports.
But try telling that to the desperate Vietnamese cement producers, swamped by chronic overcapacity and very low prices, both at home and abroad. In an effort to shift more of Vietnam’s cement mountain, this week the Ministry of Planning and Investment (MPI) proposed big changes to its handling of cement exports. At the moment cement is subject to a 5% export tax and does not receive VAT refunds. This means that Vietnamese cement has become less competitive than Chinese, Thai, Indonesian and Japanese cement on the regional market, compounding the oversupply situation at home.
The MPI now proposes to scrap the tax and allow for VAT refunds to avoid a colossal 36-47Mt oversupply of cement by 2020. It is quite staggering that this response hasn’t been considered before. This is especially the case, given that the VICEM’s General Director Tran Viet Thang asked for the government to look at the rules back in February 2017. Indeed the Vietnam Cement Association predicted an oversupply of nearly 50Mt/yr by 2020 in January 2017.
Vietnam exported 14.7Mt of cement and clinker in 2016 according to its domestic statistics service. The country was the seventh largest exporter of cement and clinker in 2016 in value terms, with a total value of US$431.7m. China, as one might suspect, topped the list, but only at US$683.6m, around 58% more than Vietnam. Given that China’s cement capacity is around 20 times that of Vietnam, this highlights the extent to which Vietnam is trying to rely on imports.
A market-led response to this would be to close some of the cement plants down and stop commissioning any new ones. China has made some inroads into this approach and Vietnam is following suit… to some extent. That said, however, Trinh Dinh Dung, the Deputy Prime Minster, inaugurated the second production line at the Thanh Thang Cement plant on 4 July 2017 and Long Son Cement will open its second production line at Long Son in late August 2017. That new line will add nearly another 3Mt/yr of capacity to the national total just by itself. On top of this, Thai-owned Siam City Cement Vietnam opened a new ‘terminal’ in Vietnam in late June. Thailand ranked above Vietnam in the cement and clinker export list for 2016 at US$612.2m, suggesting that, contrary to the obvious implication, the port could even be used to ship out Thai exports into Vietnam!
This is not the first time we have heard about Vietnam’s massive cement surplus but it is the first time that the government appears to have registered it as needing attention. A market-led economy would simply shut the plants down but Vietnam plays by different rules. Will changing the rules on tax help it sell out its surplus? Call us in 2020…
Vietnam proposes reduction in cement export tax
24 July 2017Vietnam: The Vietnam Ministry of Planning and Investment (MPI) has proposed a reduction in its cement export tax to help ease the oversupply in the domestic market. In a recent report to the government, the MPI said that Vietnamese cement firms are seeking ways to deal with their large inventory.
Under existing regulations cement is subject to an export tax of 5% and does not receive value added tax (VAT) refunds, meaning Vietnamese cement products have become less competitive than those of China, Thailand, Indonesia and Japan. In response, the MPI has asked the government to slash the cement export tax and allow firms to benefit from VAT refunds for cement exports.
The General Department of Customs’ statistics showed that, in 2016, Vietnam exported 14.7Mt of cement and clinker with a total value of US$560m. At present, cement supply in the Vietnamese market is around 20% higher than demand.
The Vietnam Cement Association has forecast that the country’s total cement output might reach 108Mt in 2018 and 120-130Mt in 2020, leading to an unsold inventory of 36-47Mt.