Deputy Prime Minister Tran Hong Ha has called for an investigation into Vietnam Cement Industry Corporation (Vicem) following reports of significant financial losses.

The Ministry of Construction, in coordination with the Ministry of Finance, must review the situation, identify causes, and propose solutions by January 15.

Ongoing financial challenges for Vicem

The directive was outlined in Document No. 186 from the Government Office, responding to reports of Vicem’s consolidated losses reaching 1.4 trillion VND ($58 million) in 2024.

Vicem was the only loss-making enterprise among six companies under the Ministry of Construction. Its parent company reported a standalone loss of 236.8 billion VND ($9.9 million), with total consolidated losses attributed to weak market demand.

This marks Vicem’s second consecutive year of losses. In 2023, the corporation recorded a loss of 1.129 trillion VND ($46.6 million), its first since disclosing financial data in 2016.

In November 2024, the Ministry of Finance’s inspection revealed potential capital loss risks due to Vicem’s investments in underperforming subsidiaries. The corporation was required to allocate over 3 trillion VND ($124 million) for provisions.

The Ministry of Finance urged Vicem to:

Reassess financial investments in underperforming subsidiaries.

Direct representatives of state capital in subsidiaries to devise concrete financial recovery plans.

Implement measures to avoid prolonged accumulated losses and ensure the safety of state and corporate assets.

Financial oversight measures for subsidiaries showing signs of instability were also mandated.

Vicem’s industry role and operational scale

Vicem operates under the Ministry of Construction, overseeing 10 factories across Vietnam with 16 production lines. It has an annual capacity of 20 million tons of clinker and 27 million tons of cement.

The corporation’s ecosystem includes renowned cement brands such as Ha Tien, Hai Phong, Bim Son, Hoang Thach, But Son, and Hoang Mai.

Vicem’s financial difficulties underscore challenges in Vietnam’s cement sector, exacerbated by declining market demand and ineffective financial management.

Deputy Prime Minister Tran Hong Ha’s directive emphasizes the need for swift action to mitigate further losses and ensure financial stability within one of the country’s key state-owned enterprises.

Hong Khanh