VIETNAM: Vietnamese cement producers eye overseas markets

When supply exceeds demand, Vietnamese cement producers need to look for new export markets to minimize the redundancy of their products.

Vietnamese cement producers eye Africa

In addition to traditional markets in Laos, Cambodia and Bangladesh, the Vietnam Cement Corporation (Vicem) is keen to approach Myanmar.

According to a recent report from Vicem, there is an increasing demand for cement in Myanmar because its cement production can only meet 50 percent of the consumer demand. For years, Myanmar has been importing cement from Thailand, Malaysia and China. The serious shortage of cement in Myanmar has created an opportunity for Vietnam to boost its current exports. Moreover, the price of cement in Myanmar is also higher than in Laos, Cambodia and Bangladesh, currently estimated at more than US$110/tonne, while it is just about US$75-80/tonne in Vietnam.

The cement industry is predicted to enter a new period of tough competition on account of supply exceeding demand. As early as in 2009, especially in 2010, the Ministry of Construction urged businesses to seek new markets overseas. It also asked cement producers to closely monitor the monthly output of cement for both domestic consumption and export.

In the first six months of this year, Vicem shipped 610,000 tonnes of cement to Singapore, the Philippines, Bangladesh, Hong Kong (China), and Laos.

Vicem General Director Nguyen Ngoc Anh, said his corporation last year failed to reach its set export target of one million tonnes but it is now able to export 1.2 million tonnes by the end of this year.

In 2010, the Vissai Ninh Binh Group signed a contract with the Peakward Enterprise Company to export 1.2 million tonnes of clinker worth US$40 million to Bangladesh. The group will continue to negotiate with Peakward to boost its exports to this market.

Hoang Manh Tuong, chairman of the executive board of the Vissai Ninh Binh Group, said Peakward Enterprise has advantages in transportation which can meet pressuring demand for cement exports.

Thanks to its improved relations with Peakward Enterprise Company, the Vissai Ninh Binh Group is finding itself in a favourable position to export cement products to other markets, including Japan and Singapore, he added.