Promoting export is seen as a good solution for the local cement industry to curb oversupply pressures.
>> Cement producers face hard times
In the first six months of 2011, Vietnam Cement Industry Corporation (Vicem) exported 610,000 tonnes of cement to diverse markets including Singapore, the Philippines, Bangladesh, Hong Kong and Laos and hopes it could export around 1.1-1.2 million tonnes of cement this year, said Vicem’s general director Nguyen Ngoc Anh.
Last year, Vicem failed to reach its export target of one million tonnes of cement.
In 2010 Vissai Ninh Binh, a big multi-field non-state economic group with cement production one of its core functions, marked a cornerstone in local cement industry development when it inked a $40 million contract for exporting 1.2 million tonnes of clinker to Bangladesh.
Under the signed contract, from September 2010 until August 2011 each month the group exported 100,000 tonnes of clinker to the foreign partner Hong Kong-based Peakward Enterprise.
The export contract will be finalised this month and the Vissai Ninh Binh is currently under negotiations with the foreign partner with a view to further supplying the product to this market.
According to the group’s chairman Hoang Manh Truong, the foreign partner was strong in transport but not just simply a building material import-export trader which could help local firms lessen pressures when hiring ships for export shipments.
Reality shows that made-in-Vietnam cement is now seen in different Asian markets and most recently in Africa. Vicem recently made a careful survey of Myanmar’s cement market.
The survey shows that Myanmar has tremendous demand for cement import as its local production could just satisfy half of the demand. This Asian country has for years sourced cement from Thailand, Malaysia and China.
Besides, cement export prices to Myanmar are more competitive than those to Bangladesh, Laos or Cambodia’s markets. According to the Ministry of Construction, the cement import price under cost, insurance and freight (CIF) terms at Myanmar’s Yagoon port ranges from $85-$89 per tonne and actual selling prices are from $100-$110 per tonne.
According to Vicem’s latest report, around 1.4 million tonnes of cement are currently stockpiled at local firms as the supply far outran the demand.