More cement plants have been put into operation

More cement plants have been put into operation recently, despite warnings about the oversupply.

In 2017 alone, three large plants became operational, including the 2.3 million Long Son 2 in Thanh Hoa province, the 2.3 million Thanh Thang No 2 and 4.5 million ton Xuan Thanh No 2.  

Experts estimate that the total capacity of all cement plants in Vietnam is 113 million tons.

Meanwhile, a series of other plants are expected to become operational in 2018, including The Vissai’s Song Lam, Thai Group’s Kaito and Tan Thang in Nghe An province.

The Vietnam Cement Association (VNCA) predicted that Vietnam would consume 82 million tons of cement by 2020, which means that 36-47 million tons would be in excess.

Boosting exports is the only solution. In 2014, Vietnam is one of the world’s biggest cement and clinker exporters with 20 million tons of exports, worth $1 billion.

The export volume decreased slightly to 15.8 million tons in 2015 and 15.5 million in 2016, but regained growth in 2017 with 21 million tons exported. 

The export amount in the first half of 2018 was 69 percent higher than the same period last year.

The sharp increase in cement exports is attributed to the government’s decree No 100 dated in December 2017, under which the export tariff was cut to zero percent.

However, this was contrary to the government’s policy stipulated in a legal document dated May 21, 2018 which instructed relevant ministries to improve the efficiency of natural resources use and restrict exports.

Restricting nonrenewable natural resource exports is a policy applied in many countries over many years. 

The cement industry consumes huge amounts of natural resources. It also consumes a lot of electricity and causes pollution. 

Vietnamese experts have also called to stop or restrict exports.

Some countries which were cement exporters have turned into cement importers. Meanwhile, many regional countries have cut cement capacity or shut down plants utilizing outdated technologies. 

Thailand, for example, stopped developing new projects tens of years ago. Therefore, some manufacturers in the industry in Thailand have been trying to relocate their plants to other countries. 

SCG spent $156 million to acquire 100 percent of shares of Vietnam’s VCM. Prior to that, SCG bought Buu Long Cement in Dong Nai province.

Experts warned that foreign investors set up cement plants in Vietnam to exploit low-cost power sources in Vietnam and try to ‘export pollution’ to the country.

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