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Plants on major transport routes key to balancing cement supply
The chairman of the Viet Nam Association for Building Materials, Dr Tran Van Huynh, spoke to Thoi bao Kinh te (Viet Nam Economic Times) about cement export potential.
What do you think of suggestions that Viet Nam now has too many cement factories?
It is correct.
If all the cement projects with licences in Viet Nam were operating, 60 million tonnes of cement would be produced annually.
Plans are for all the projects to be operational by 2011. Because most of the factories are in the north, there is a market imbalance.
We have suggested agencies cease licensing enterprises investing in cement manufacture, particularly in the provinces of Ha Nam and Ninh Binh, where there are three factories in one village with limited transport.
We would be better to halt projects which have licences but are in limbo because of a shortage of capital.
How do you evaluate the imbalance between northern and southern markets?
The imbalance is mostly about price. The majority of production is used in the south where prices are normally higher with the difference relating to the high cost of transportation.
There are no sea links from the northern factories to the southern region which produces a tenth of the national output but uses 40 per cent of the total production.
The south has no source of limestone, so better transport is vital to counter the imbalance.
What changes are needed to counter a predicted surplus by 2011?
We have recently made it easier to license the manufacture of cement without considering construction industry requirements.
Too many private factories have a small capacity with a limited and ineffective production line. They have not only provided the market with low quality product but used large amounts of resources.
For instance, 10 to 20kWh is spent producing a tonne in small factories, which is much higher than that used by modern and large-scale operations.
The production lines in small factories last a decade while the life span of a high-tech operation in modern plants is up to 50 years.
We need to stop licensing small projects and concentrate on investing in large-scale projects and factories from where there is good transport south.
The Government’s request to use cement for rural roads construction is a stimulus for the industry.
How do you evaluate the potential for exports?
Once domestic demand is met, manufacturers should consider exporting. Recently, the Cam Pha Cement Company shipped its first 12,500 tonnes to African markets. As far as I know, another 15,000 tonnes will go to South Africa and the Middle East.
The company has signed contracts with American partners for 40,000 tonnes a month to South Africa, and to ship clinker and cement to the US and South America.
This is very encouraging for manufacturers as foreign enterprises have looked at production methods. As most factories meet strict requirements for quality and environmental protection, there is a potential to grow exports.
VietNamNet/Viet Nam News
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