Cement firms start to crumble

Cement firms are falling short of business targets amid a punishing economy.

Vicem But Son Cement Joint Stock Company’s deputy general director Ngo Duc Luu said the firm was set to churn out 2,450 million tonnes of clinker and 2,150 million tonnes of cement, and sell 650 tonnes of clinker and 2,150 million tonnes of cement in 2011.

The firm, however, decided on scaling down 10 per cent of production due to poor sales.

“Our cement sales figures were not dissimilar to those one year ago, however, it was hard to promote clinker sales. We have exported 800 tonnes of clinker this year,” Luu said.

Ministry of Construction statistics show that cement production and consumption plunged in August and in the first eight months of 2011 compared to June and July.

In August, 3.53 million tonnes of cement were produced, down 500,000 tonnes against June and 60,000 tonnes against July. Sales hit 3.41 million tonnes, down 40 tonnes against July and 520,000 tonnes against June, bringing sales figures in the first eight months to 31.65 million tonnes, tantamount to 58 per cent of the year’s projection.

Big market player Vicem’s sales figures in January-August plunged.

In 2011, the state cement conglomerate envisaged sales of 20,700 tonnes of cement with 19,550 tonnes for domestic consumption and 1,150 tonnes for export.

However, the sales volume in 2011’s first eight months came to 12,447 tonnes, around 60 per cent of the year’s target.

According to Vicem, most member firms saw their sales targets drop in the first eight months, including famous cement brands such as Ha Tien, Hoang Thach and Haiphong.

A representative of a cement firm based in northern Ha Nam province said cement firms hoped the property market would be less gloomy soon, paving the way for them to boost sales.

In September, Vicem’s member firms are set to sell out 1.63 million tonnes with 100,000 tonnes of clinker for export.

Vicem’s chairman Le Van Chung forecasted cement sales would still face tension amid rising supply.

Eleven new cement plants would come online within 2011, making market competition even stiffer, said Chung.

Tags: Vietnam cement industry, Vietnam cement sector