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Vietnam seen facing cement shortage
Publication Date : 08-05-2014
Vietnam may face a cement shortage in the next two to three years if suitable measures are not taken early, industry insiders said.
According to the Ministry of Construction, the construction industry is anticipated to grow by about 7–10 per cent per year in the next few years. Domestic cement consumption this year is expected to reach 65–67 million tonnes besides around 10 million tonnes for exports.
Though the prime minister has so far approved the development plan of the country's cement industry in 2011–20 with a vision to meet the domestic cement demands by 2030, the construction of the approved projects has been slower than scheduled.
Under the development plan, cement plants will churn out 75 million tonnes of cement by 2015. This figure will increase to 93–95 million tonnes and 113–115 million tonnes by 2030. In the years 2012–15, 24 cement production projects totalling a combined output of 24.76 million tonnes per year will be put into operation. The total investment capital of the projects is estimated at nearly 50 trillion dong (US$2.38 billion).
However, the implementation of the projects is too slow due to the lack of investment capital.
Due to economic problems, many cement projects, which have been approved in the development plan of the country's cement industry, have failed to kick-start as scheduled due to a shortage of capital. After scrutiny, the government in February had to remove nine such cement projects.
Tran Van Duong, director of the government Office's Sectoral Economic Department, noted that the capital to invest in a cement project is very large, especially in equipment purchase.
Duong explained that previously, it was easier for cement project investors to construct cement plants as the government guaranteed them the investment capital for equipment purchase. Currently, the government no longer guarantees such investment, thus most of the cement projects face investment capital shortage.
As some of the approved cement projects have been removed, the country will probably face a shortage of cement in the future if measures are not taken early. It takes at least about three years to complete the construction of a cement plant under ideal conditions.
To deal with the anticipated shortage, Duong suggested that the government should continuously scrutinise approved cement projects to remove unsuitable ones and add new and feasible projects to the development plan of the country's cement industry.