Displaying items by tag: Vietnam

Vietnam: Vietnam produced 29.5Mt/yr of cement in the first half of 2014, a year-on-year rise of 7%, according to the General Statistics Office. Notably in June 2014 cement production rose by 19% to 5.4Mt. In 2013, Vietnam's cement output hit 56.8Mt/yr.

Vietnam: The Asean Federation of Cement Manufacturers (AFCM) will hold its 24th Technical Symposium & Exhibition in Hanoi, Vietnam in 21-24 April 2015. The Vietnam National Cement Association (VNCA) will be event the host and organiser. The theme for the symposium is 'Upgrading technology for a sustainable development.'

Vietnam: Semen Indonesia plans to invest up to US$300m towards building a cement plant in Vietnam in the next five years as part of its business expansion in Southeast Asia. The Indonesian state-run cement producer intends for its subsidiary Thang Long Cement to build a 1.5Mt/yr cement plant, according to General Director Dwi Soetjipto. Construction is scheduled to start in early 2015 with a operation due to start in 2018.

Thang Long Cement currently holds a cement production capacity of 2.5Mt/yr and the new plant is intended to meet the increasing demand for cement in Vietnam and other Asian countries, including Singapore, Cambodia, Laos and Myanmar. Semen Indonesia holds a 70% stake in Thang Long Cement. It has set a target of becoming one of the leading cement producers in Southeast Asia.

Vietnam will not face a shortage of cement in either the short or long term as the supply is estimated at 75 - 76Mt/yr in 2015 while demand in 2014 is estimated at 65 – 67Mt/yr, according to the Ministry of Construction. The local cement industry had around 2.59Mt of unsold products, mainly clinker, at the end of April 2014.

Asia: PT Semen Indonesia's subsidiary PT Semen Padang has commenced construction of its US$279.5m Indarung VI cement plant in Padang, West Sumatra on 26 May 2014. The new plant, which has an annual cement production capacity of 3Mt/yr, is expected to commence operations in the second half of 2016.

"We are developing the Indarung VI factory as the demand for cement keeps increasing across Sumatra and western parts of Java," said Dwi Soetjipto, CEO of PT Semen Indonesia. With the operation of the new plant, Semen Padang's total cement production capacity is expected to increase to 10.5Mt/yr, up from 7.5Mt/yr.

Brisk development of property, toll roads, and other infrastructure projects has pushed up demand for cement in East Java. "Demand for cement in the country has increased. All cement production is absorbed by the market for government and private properties and infrastructure projects," Bambang Djoko claimed. The commercial director of PT Semen Gresik Aunur Rosyid said that cement sales in West Java reached 2.83Mt in the first four months of 2014, an increase of 9.8% from 2.56Mt in 2013. "The growth exceeded the 3.7% growth of cement sales nationally in the same year," said Rosyid.

Elsewhere, PT Semen Indonesia has announced that it may acquire a cement plant in Bangladesh as part of its efforts to expand business. Soetjipto stated that the Bangladeshi cement plant has a production capacity of 0.60 – 1Mt/yr.

"We are now in the process of approaching the management of the plant for further negotiations. Hopefully, it can be realised in the coming six months," Soetjipto said. He was reluctant to reveal financial details, saying that the acquisition value was less than that made for Thang Long Cement in Vietnam. In November 2012 Semen Indonesia acquired 70% of Thang Long Cement (worth US$157m) from Geleximco.

Soetjipto also disclosed that Thang Long Cement will build a new plant in Rembang, Central Java in June 2014. "We will begin the construction of a new plant in Rembang in mid-June 2014," he remarked. He explained that with the development of new factories in Padang and Rembang and upgrades to the existing plants, Semen Indonesia will have a combined production capacity of 40.8Mt/yr by 2017.

PT Semen Indonesia hopes to boost its sales in Vietnam by expanding the production capacity of its Vietnamese subsidiary Thang Long Cement. " Thang Long Cement's market share in Vietnam is relatively small at around 2.3Mt/yr, but its market potential is huge," said Thang Long Cement executive Bambang Djoko.

Vietnam: The Vietnamese government will no longer provide guarantees to foreign loans for cement projects, as domestic supply has surpassed real demand, according to Prime Minister Nguyen Tan Dung.

Local cement producers have been facing huge difficulties, including huge losses and high inventory due to the low domestic demand. While domestic demand has remained modest, the annual cement output continues to increase, reaching 70Mt in 2013. Cement sales remained low at 61Mt. Domestic cement production capacity is forecast to rise to 77Mt/yr due to the commissioning of five new cement plants with a combined production capacity of 7Mt/yr.

The Vietnamese government earlier guaranteed foreign loans worth US$1.36bn for 16 state-owned cement companies, including Dong Banh, Thai Nguyen, Tam Diep and Hoang Mai companies. According to an audit report in 2012 from the Ministry of Finance on cement projects using loans with the government acting as underwriter, 10 cement projects resulted in losses and some of them could not repay their loans.

Vietnam: Larger cement producers in Vietnam have failed to build government mandated waste heat recovery (WHR) systems. Under Vietnam's cement industry development plan until 2020 with a vision towards 2030, all cement plants with a clinker production capacity of 2500t/day or above have to implement a WHR system to save at least 20% of their electricity consumption by 2015. However, local media has reported that only Holcim and Ha Tien 2 have invested in the technology. Other cement producers have been prevented from investing in their plants by high debt and poor local demand for cement.

Nguyen Quang Cung, chairman of the Vietnam Cement Association admitted to the delayed investment in the WHR systems. "However, there won't be an extension. The cement makers will be forced to implement this on time," said Quang Cung.

Nguyen Cong Minh Bao, director of Sustainable Development of Holcim Vietnam, which invested US$18m in a WHR system in 2012, said that Vietnam should not extend the deadline. According to Bao 60% of Chinese firms apply the system in China and WHR is an intrinsic component of any new project.

Holcim Vietnam's WHR system has an output capacity of 44MkWh/yr. It will be enough to serve the firm's Hon Chong Cement Factory for 88 days of operation, meaning Holcim Vietnam will save 9000t of coal and reduce 25,300t of CO₂ per year.

Vietnam's cement sector is considered as one of the country's most energy-intensive industries. Under the third draft of the retail pricing scheme conducted by the state-run Electricity of Vietnam in 2013, steel and cement producers using power voltages of 110kV or higher during peak hour would pay 10% than the asking price for their normal power. Overall, the draft would dish out a power tariff hike of 2 - 16% to steel and cement producers.

Vietnam: The Thach My cement plant in Quang Nam province has started operation after a period of delay, according to a statement by Xuan Thanh Investment and Development JSC. The plant had an investment of US$190m with a designed cement production capacity of 1.7Mt/yr in its first phase. It covers an area of 57.36 hectares.

The plant was identified as a key project in the province when construction started in July of 2010. Construction was later delayed due to a shortage of building materials. The plant will create jobs for 1000 labourers, with 800 of these from the local area.

Vietnam: Prime minister Nguyen Tan Dung has approved a proposal from the Ministry of Construction to expand the production capacity of Xuan Thanh cement plant in the northern province of Ha Nam to 4.5Mt/yr from the current 2.3Mt/yr.

The prime minister asked the ministry to review the planning of the cement industry, to remove low capacity cement projects from planning and to report to the government in June 2014. The government leader earlier added Xuan Thanh cement plant to the list of projects slated for operation before 2015.

There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.

The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).

One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.

Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.

Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.

Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.

Vietnam: Authorities in Vietnam's central province of Quang Tri have decided to withdraw the investment license of a US$47m cement plant due to its sluggish implementation without legitimate reasons.

The plant, named Roli-Quang Tri, is located in Cam Tuyen commune, Cam Lo district and is the largest project in the province. Construction of the plant, which has a planned cement production capacity of 1.2Mt/yr, commenced in June 2009. Construction was subsequently delayed as the company is unable to continue the project, said Nguyen Duc Cuong, chairman of People's Committee of Quang Tri province.

Prime minister Nguyen Tan Dung earlier approved a proposal by the Vietnam Building Material Association to cancel nine cement projects with a total capacity of 2500t/day in order to keep in line with market demand. The prime minister also agreed to extend the deadline for the construction of seven other projects, including He Duong II, My Duc, Thanh Son, Tan Thang, Do Luong, Tan Phu Xuan and Nam Dong, until after 2015.

Currently, local cement makers have faced many difficulties due to having a huge inventory and low domestic demand, caused by the frozen real estate market. In addition, high production costs, high lending interest rates and rising input costs have also put heavy burden on local cement producers.

Vietnam's cement sales are predicted to rise by 1.5% to 3% year-on-year to between 62Mt and 63Mt in 2014, including 48.5Mt to 49Mt of domestic sales and 13.5Mt to 14Mt of exports.