- Vietnam and Turkey made up 27% of total cement exports
- Vietnam 2023 first quarter production declines by 9.9%
- Vietnam government continues to issue new licenses
Harare- Vietnam is a significant player in the cement industry and its production capacity is of concern to smaller players such as Zimbabwe and other African players. In 2021 it, along with Turkey, was one of the world’s largest exporters of the commodity with a 27% combined share of total cement exports.
In a 2023 publication by global cement, The General Statistics Office was quoted stating that domestic cement production volumes stood at 27.4Mt throughout the first quarter of 2023. The figure corresponds to a drop of 9.9% year-on-year from the comparative 2022 period. Vietnam’s overall 2022 production volumes stood at 116 Mt. If Vietnam maintains a 9.9% level of slack in comparison to 2022 levels, the annual production levels for 2023 will be approximately 104.5 Mt. This data is in direct contradiction to earlier reports which had forecasted that new cement lines would raise Vietnamese cement production capacity by 4% year-on-year in 2023 to over 120Mt/yr. This projection was echoed by The Vietnam Cement Association (VCA), which projected that as things stood as of March 2023, production capacity for 2023 would reach 121Mt/yr.
However, in 2022, several producers suspended cement lines during the second half of that year due to high costs and unfavourable market conditions. Capacity utilization will be subject to resuming operations at these suspended plants. The government has been issuing licenses for new plants. It has been reported that the upcoming new capacity scheduled to commence operations during the year includes a 4.5Mt/yr line at a Xuan Tanh Cement plant and a 2.5Mt/yr line at a Long Son Cement plant.
The VCA has been lobbying the government against this strategy on the grounds of maintaining a balance between domestic demand and supply. VCA chair Nguyen Quang Cung said “We must be careful to maintain a balance between regional supply and demand. As a result of the severe overstock in the north, it is crucial to encourage cement producers in the south to spend more on increasing clinker production capacity." Cung added, "This will minimize the environmental effects of shipping clinker between the north and south.”
Growth in the cement market is also expected in the second half of 2023, given the opening up of the China market. As growth steadily increases each quarter, we expect that to be reflected in the demand increases for cement. The production of Vietnam is going to be important in analyzing the African regional cement opportunities available. A slack in Vietnam production will allow more export opportunities for regional players at higher prices for the commodity.
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