Work begins on VN’s biggest cement project

Kinh Bac Urban Development Corp and its affiliate Sai Gon – Tan Ky Cement Joint Stock Co began construction of a US$1.5 billion cement industrial zone yesterday, May 19, in the central province of Nghe An.

Occupying a 600ha area in Tan Long Commune, the Sai Gon – Tan Ky cement industrial zone will be the country’s largest of its kind and is expected to churn out 14 million tonnes of cement annually when fully operational.

The zone’s first phase, costing VND1.5 trillion ($78.9 million), will take six years to complete.

Reducing costs

“The new zone will supply large quantities of cement for major construction projects, particularly in Laos. It will help the company reduce investment costs and become more competitive,” the company said in its latest press release.

According to the General Statistics Office, in March the country produced 4.09 million tonnes of cement. Cement production in the first quarter of the year hit 11.13 million tonnes, 1.15 million tonnes more than the same period last year. Meanwhile, demand increased by 6.4 per cent against the same period last year, reaching 10.27 million tonnes.

The country now has 105 production lines with an annual capacity of more than 61 million tonnes.

However, domestic demand this year is expected to be between 48 million and 50 million tonnes, resulting in a huge surplus.

Industry experts said domestic cement firms would find it difficult to break into major markets such as the US and the EU, which have extensive high-tech infrastructure already in place and a lower demand for cement.

The US and the EU also have high quality standards that many Vietnamese cement firms are unable to meet.

Africa and developing countries with poor infrastructure offer the most potential for Vietnamese exporters, industry experts have said.

Viet Nam News

Tags: Tan Ky Cement, Vietnam cement, Vietnam cement indutstry