Cement makers find it hard to export their products

Cement makers, who face an excess of some two million tonnes this year and more ahead, are seeking ways to ship their products overseas only to find that it is nearly an impossible mission.

Three joint-venture companies in the North, who are requested to export some 30 – 40 percent of their products by the Ministry of Construction in mid-July, said that there are few markets left and that shipping cement overseas is unprofitable.

Nghi Son Cement company in Thanh Hoa, for example, with an annual output of 4.3 million tonnes, has totally relied on the domestic market for long, shipping half of its output for southern provinces every year.

Hoang Van Luoc, deputy director of the company, said that it would be a big problem for the company to sell two million tonnes abroad.

“We sell $55 per tonne in the domestic market, but the price abroad is only $40 or $45 per tonne, let alone the cost of freights,” Luoc said.

The neighbouring markets of Lao and Cambodia are already dominated by cement makers from Thailand and China whose price is more competitive. Therefore, local cement makers will have to turn to Africa, America or the Middle East, but the long distance and thus high shipping costs will make cement export unviable.

Other companies also find themselves in the same boat.

The Vietnam Cement Industry Corporation, or VICEM, targets to ship one million tonnes this year, and has been able to ship nearly half the targeted volume to Laos and Cambodia to date at a subsidised price, said an executive from VICEM.

The Ministry of Construction is reviewing all the cement projects and preparing the master plan for the 2011-2015 period, with an intention to put on hold the registration of new projects to address the problem of overproduction. – SGT

Tags: Vietnam cement, Vietnam cement industry