VietNamNet Bridge – Deputy Minister of Construction Nguyen Tran Nam has officially denied the opinion that cement plants, which, using backward technologies, gobble up too much electricity and cause electricity shortages.
I 2010, when the electricity shortage became serious, people not only criticized Electricity of Vietnam for not fulfilling its duty of providing enough electricity to enterprises and people, but also accused steel and cement plants of using too much electricity, thus leading to the serious electricity shortage. However, the Ministry of Construction has denied this.
What are your comments on the opinion that the current serious electricity shortage has been caused by cement plants which are consuming too much electricity?
Right after hearing the information, we have checked the figures about the volume of electricity consumed by cement plants. In order to make one ton of cement, cement plants need 98 kwh. The cement industry plans to produce 50 million tons of cement in 2010, this means that the total volume of electricity needed will be about $4.9 billion kwh. Meanwhile, Electricity of Vietnam has forecasted that Vietnam will consume 85 billion kwh of electricity this year. This means that the cement industry only consumes 5.7 percent of the total electricity to be consumed this year. The figure of 5.7 percent is really not a big proportion, especially noting that cement production is a key industry.
You may have heard the criticism that because of the bad programming and forecasting, the cement output has far exceeded the domestic demand, while cement producers cannot export their products. What would you say about that?
The overall cement industry development program until 2010 was approved by the Prime Minister in 1997. Just after five years, or in 2002, after observing the market performance experts realized that the forecasted volume ofbcement consumption in the program was “more modest than the reality”. The problem is that though the cement output increased sharply, the consumption level also increased very rapidly thanks to high economic development.
Therefore, in 2005, in order to meet the demand for industrialization and modernization processes, and to satisfy a high demand for transport infrastructure development, irrigation work, civil and industrial works, the Prime Minister requested to build up the overall cement industry development program for the second time.
Why does the cement industry development program need adjustments? It is because of the bad forecasting?
I have to say that all the forecast figures about the supply and demand are accurate and they fit the market performance. We have to adjust the development program because the industry needs to make breakthroughs to meet the requirements set for a certain period of development. This is a change that is in line with the development laws, and we must not blame on the bad forecasting.
After 2010, i.e after a five-year period, we will also have to continue building up a new development program for 2011-2020 with a vision until 2030. This is a that program that every industry has to do, not only the cement industry.
Experts have rung the alarm bell over the cement overproduction. Is the oversupply accurate?
The answer is that cement plants can sell their products as soon as they churn out. The current inventory volume of cement nationwide is just equal to the volume of 10 days of production. Enterprises now have 10 percent in stocks, but this volume will be mainly carried to the southern market.
The special characteristic of Vietnam’s cement market is that while most of the material mines are located in the north, but the biggest cement demand is in the south. Southern provinces consume 50 percent of the total cement output. Meanwhile, the sale seasons are quite different in the north and in the south. Therefore, it may happen that cement products are deficient at some moments and excessive at other moments.
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