Cement exports not feasible despite glut: insiders

While exports seem to offer an escape route to the cement sector at a time when demand is far short of supply, some industry insiders reject the possibility, Saigon Times newspaper reported.
Production in the first seven months this year was 31 million tonnes while consumption was only 28 million tonnes, and the whole-year surplus is expected to be five million tonnes.

The general director of a cement company said what hinders exports is not the lack of markets but the inability to ship bulk goods from Vietnamese ports and the high transport costs.

This means Southeast and South Asia are the only viable markets but Vietnamese exporters could hardly compete with rivals from Thailand, China, Indonesia, and Taiwan in these markets, he said.

In the year to September Vissai Ninh Binh and Vietnam Cement Industry Corporation exported 2.8 million tonnes of cement and clinker to Bangladesh, Laos, and Cambodia, but at a price of $55 a tonne, or only 65 percent of the domestic retail price.

Vietnamese exporters still cannot break into markets such as the Middle East, Africa, and North America despite the huge cement demand there due to its poor shipping infrastructure.

A top executive at a cement company said to cover the cost of exports to such distant markets, exporters need to use ships with a capacity of 50,000 tonnes or more.

But there is no port in Vietnam capable of docking such large vessels, and the exporters had to transport the products by barge to vessels anchored offshore, he explained.

“It will take three months to just load the products and unload them at construction sites there.

“Since the shelf life of cement is only six months, this will lower the quality.”

But even if these problems could be overcome, many cement makers said, cement should not be exported because of its low value.
They urged the cement sector to instead review its development plans and call off or delay some cement-factory projects to reduce supply.

Tuoi Tre

Tags: Vietnam cement industry, Vietnam cement sector