Vietnam will restrict the export
of cement clinker in the future. In order to restrict the export of non-renewable resources, the Ministry of Finance of Vietnam has proposed to raise the export tax rate of clinker products from 5% to 10%. The proposal was made by the Ministry of Finance in a draft decree amending and supplementing several articles of Decree No.57/2020/ND-CP and Decree No.122/2016/ND-CP on export tariffs and tax rates.
In fact, promoting the export of cement and clinker can help the cement industry to make use of domestic capacity and excess resources, but it is not a long-term sustainable solution because its production is mainly based on the extraction and use of non-renewable resources.
"The increase in clinker exports has consumed domestic resources and caused many negative impacts on the environment during the mining process.". On the other hand, Vietnam's cement and clinker production is using electricity at a low price. The representative of the Ministry of Finance said.
According to the annual report of Vietnam Cement Association (VNCA), by the end of 2020, Vietnam has 90 clinker and cement production lines with a total capacity of 106.6 million tons (calculated by 80% clinker + 20% additives). In fact, about 122 million tons of cement (70% clinker + 30% additives) can be produced.
In recent years, Vietnam's domestic cement consumption has hardly increased, with a decrease of 3 million tons in 2020 compared with 2019, but industry consumption still exceeds 100 million tons due to strong export growth. Specifically, domestic consumption reached 55.68 million tons in 2015, 59.34 million tons in 2016, slightly increased to 60.27 million tons in 2017, 63.94 million tons in 2018, and about 65 million tons in 2019, but will decrease by 3 million tons to 62.12 million tons by 2020.
At present, the output of clinker and cement is adjusted according to the economic growth, the development strategy of the construction industry and the consumption of cement. However, due to the continuous expansion of production capacity, the domestic supply of cement continues to increase. According to the statistics of the Ministry of Finance, Vietnam exported nearly 33 million tons of cement and clinker in 2020, of which 24 million tons of clinker were exported, accounting for 73%, and 8.7 million tons of cement were exported, accounting for 27%. In
order to restrict the export of clinker, the export tax rate of clinker products is 5% in Decree No.57/2020/ND-CP. Cement products are not subject to export tax because they are not included in the tax bracket.
Vietnam's building materials development strategy for 2021-2030, looking forward to 2050, will restrict the use of a large number of non-renewable mineral raw materials and fuel products exports. Specifically, the Strategy proposes that the export rate of clinker and cement should not exceed 30% of the total design capacity during 2021-2030. From 2031 to 2050, the export rate of clinker and cement will not exceed 20% of the total design capacity.
It is worth mentioning that at present, the export of cement and clinker has reached this control threshold.
Focus on serving the domestic market
According to FPT Securities, cement exports have increased 30-fold in the past 10 years (2010-2019), accounting for 32% of the industry's total consumption, helping Vietnam lead the world in cement exports. However, when firms mainly export very low-value clinker, the raw material form of cement, the efficiency of export activities is not related to the growth of production. At present, the average export price (FOB) of Vietnamese ports is only 38.5 US dollars/ton (10% lower than domestic cement sales price).
Cement is an industry that many countries do not encourage exports because of its intensive use of non-renewable resources, low competitive advantage, high transportation costs, and especially low added value. The particularity of cement industry is resource-intensive, which has a great impact on the environment. A senior executive of a cement company said frankly, "a cement plant with a scale of 2 million tons per year uses about 2 million tons of limestone and 200000 tons of coal a year, consumes about 170 million kilowatt-hours of electricity, and emits about 2.2 tons of carbon dioxide from burning fuel.". Under the background of increasing pressure on energy security and the government's economic development policy without sacrificing the environment, we should set long-term goals, focus on serving the domestic market, and have appropriate supply, security and demand policies.
In fact, the problem of restricting the export of non-renewable resources has been applied by countries around the world for many years. While the cement industry sells a large amount of clinker, it also stimulates the consumption of a large amount of coal (the cost of coal accounts for about 30% of the total cost of cement production). Vietnam's domestic coal supply is insufficient and has to be imported, which enlarges the trade deficit. In 2020, Vietnam imported 54.8 million tons of coal, worth $3.778 billion. Cement is one of the largest consumers of coal, thermal power, steel and chemicals.
It is expected that from now to 2030, Vietnam's domestic coal sources will continue to decline and the cost will be more expensive, so cement enterprises will promote the use of imported coal, and the proportion of imported coal is expected to reach 50-60%.
浙公网安备33010802003254号