[Translator] Vietnam May Reformulate Cement Industry Plan to Solve Oversupply Problem

2024, the Ministry of Construction of Vietnam submitted a proposal to the Prime Minister to restart the planning of the cement industry. Nguyen Quang Cung, chairman of the

Vietnam National Cement Association (VNCA), said, "Due to the lack of industry planning guidance in the past six years, the problem of cement surplus in Vietnam has become increasingly serious.". At present, cement projects are reported by the local authorities and directly applied to the Prime Minister for approval. Facts have proved that it is imperative to restore the cement industry planning and cement project licensing system.

In fact, since the implementation of the Planning Law in 2017, Vietnam has cancelled the planning of many industries, including cement. Since then, investment in cement projects has been carried out in accordance with Vietnam's local investment regulations. According to the

latest VNCA report, Vietnam currently has 92 cement production lines with a total capacity of more than 120 million tons per year. In 2023, the total output of cement and clinker in Vietnam was about 92.9 million tons, and the average capacity utilization rate of cement production lines was about 75%. Meanwhile, Vietnam's total cement consumption is only about 87.8 million tons, a decrease of about 12% over the same period last year. Among them, domestic cement consumption has dropped to less than 60 million tons, and cement exports have been reduced to around 30 million tons.

Vietnam's Ministry of Construction said that the current slowdown in construction growth, about 50 million tons of clinker production capacity is facing excess, which will bring a burden to the economy. If measures are not taken in time, many cement producers may go bankrupt. Speaking on behalf of the cement industry

at the building materials industry solutions conference held in mid-June, Le Nam Khanh, CEO of the state-owned Vietnam Cement Industry Corporation (Vicem), advised the prime minister not to attract domestic and foreign investment into the cement industry to ease the pressure on the cement industry.

Le Nam Khanh pointed out that in the past three years, domestic cement consumption has only maintained around 60 million tons, while the actual capacity of the cement industry has exceeded 120 million tons. In its 120 years of development, the cement industry has never been in such a difficult situation.

Vicem Deputy General Manager Nguyen Thanh Tung said, "We have to temporarily suspend production lines, resulting in a reduction in cement sales and revenue.". Nevertheless, we promise not to sell goods below the cost of production. In the first half of

2024, Vietnam's cement production and consumption did not improve compared with the same period last year. According to VNCA statistics, Vietnam's cement production and sales volume is about 44 million tons, which is the same as the same period last year, and the capacity utilization rate of cement enterprises is only maintained at about 70% -75%.