Displaying items by tag: Vietnam

Vietnam: The Ministry of Construction has reported a cement surplus to the Prime Minister, blaming a supply-demand imbalance. The country has 92 cement production lines with a capacity of over 122Mt/yr, according to the Việt Nam News newspaper. However, cement and clinker consumption was 95Mt in 2024, with 65Mt used domestically and 30Mt exported.

Planning regulations governing cement plants were relaxed in 2017. Subsequently, local authorities approved 13 new units that added 35Mt/yr in capacity. The Ministry of Construction proposed a national building materials strategy capping total cement production at 125Mt/yr by 2025 and 150Mt/yr by 2030. The ministry has also urged provincial governments to limit new cement projects to prevent excessive supply. It has proposed tightening the planning laws on building new cement plants.

The Vietnam National Cement Association (VNCA) has highlighted weak market demand and production constraints as major challenges to the sector. It has lobbied the government to promote housing, infrastructure and road projects to grow the cement market.

Vietnam: Xuan Son Group held the launch ceremony for Xuan Son Cement at the Xuan Son cement plant in Hoa Binh province on 21 February 2025. The plant spans 40 hectares, with a US$196m investment and a production capacity of 3.5Mt/yr. The plant integrates Polysius grinding technology, Flender transmission systems, Haver & Boecker automated packaging technology and electrical equipment and motors from Pfeiffer, Vacuum and ABB. Heat consumption is below 680kCal/kg of clinker, and electricity consumption is under 71kW/t of cement, according to the company. The plant uses refuse-derived fuel in the kiln, as well as waste heat recovery to reduce its reliance on fossil fuels. It aims for zero NO_x and CO₂ emissions.

US: Cement shipments fell by 6% year-on-year to 103Mt in 2024 from 109Mt in 2023. Data from the United States Geological Survey (USGS) shows that domestic shipments of Portland and blended cement decreased by 6% to 82.9Mt from 88.2Mt. However, imports only dipped slightly to 19.8Mt. Particular declines in shipments were recorded in the north-east and Texas. Türkiye remained the biggest source of imports in 2024 (7.16Mt), followed by Canada (4.85Mt), Vietnam (4.17Mt), Greece (1.82Mt) and Mexico (1.32Mt). Clinker production dropped by 7% to 71.6Mt from 76.8Mt.

Vietnam: Cement production reached 22.7Mt in the first two months of 2025, up by 7% year-on-year, according to the General Statistics Office (GSO). In February 2025, the country produced 11.3Mt of cement, marking a 24% increase compared to the same month in 2024.

In 2024, Vietnam produced 184Mt of cement, reflecting a 4% rise year-on-year based on revised figures.

Vietnam: Cement and clinker exports fell by 37% year-on-year to 2Mt in January 2025, according to the General Statistics Office (GSO). Exports were worth US$76m, a fall of 36% year-on-year. The decline has continued a downward trend that began in early 2022, with trade barriers in key markets such as the Philippines and Taiwan restricting exports, according to local news reports. The 10% export tax on clinker, imposed in 2023, has also added to industry challenges. The Ministry of Construction submitted a report in January 2025 to the Prime Minister, warning of potential cement plant closures.

Taiwan: The Ministry of Finance has issued preliminary findings in its anti-dumping investigation into Vietnamese cement and clinker, confirming that Vietnamese firms engaged in dumping. Six out of 21 investigated producers had dumping margins of 16 - 20%, while others faced a margin as high as 24%. Long Son Cement recorded the lowest margin at below 17%, the only producer below the level initially alleged by the Taiwan Cement Manufacturers Association.

The Ministry of Economic Affairs has not imposed provisional duties due to lack of evidence of ongoing damage to domestic producers. The investigation began in August 2024 and will now continue its final phase.

Two news stories to note this week concerning climate legislation in eastern Asia. First, the Indonesian government announced plans to create a mandatory carbon emissions trading scheme (ETS) for key industries including cement. Second, an initiative to set up a carbon border adjustment mechanism (CBAM) in Taiwan emerged.

The proposal in Indonesia has been expected by the local cement sector and the wider market. Back in November 2024 at the ASEAN Federation of Cement Manufacturers (AFCM) event, an Indonesian Cement Association (ASI) speaker said that a preparation period for carbon trading by industrial sectors was expected from 2025 to 2027 followed by an easing-in period and then full implementation from 2031 onwards. This latest announcement appears to confirm the planned roll-out of the country’s cap-and-trade system. So far the government has set up a carbon tax, a voluntary carbon trading scheme (IDX Carbon) and a mandatory carbon trading scheme for part of the power sector. Notably, the local carbon price for that last one is low compared to other schemes elsewhere around the world. In 2024 the World Bank reported a price of US$0.61/t of CO₂. Since it only started in 2023 it is still early days yet though.

The new information confirms that the cement, fertiliser, steel and paper industries will be added to the mandatory emissions trading scheme. As per other cap-and-trade schemes, low emitters should be able to sell spare credits. However, comments made by Apit Pria Nugraha, Head of the Center for Green Industry, Ministry of Industry, at a recent trade event in Jakarta suggested that companies that emit more than their allowance would have to pay a 5% levy on the excess and buy credits for the rest. This seems to be different from the EU Emissions Trading Scheme, where companies are fined only if they go above their allowance and they do not buy sufficient credits to cover themselves. However, we’ll have to wait to confirm this and other details.

Meanwhile in Taiwan, Peng Chi-ming, the Minister of Environment, announced that a bill establishing a local CBAM could be prepared in the second half of 2025. What is telling though is how the local press coverage of this story framed the trade policy aspects of such a scheme. Peng questioned how the EU CBAM might fare in response to the protectionist and pro-tariff administration in the US. He also noted that importers of cement and steel didn’t have to disclose their carbon emissions compared to local producers. Vietnam, unsurprisingly, was singled out as a likely target of a CBAM given that one third of Taiwan’s imports of cement come from there. Lastly, Peng also said that Taiwan would have to apply to the World Trade Organization for approval if or when it did set up its own CBAM.

Taiwan introduced a carbon tax at the start of 2025 with a standard price of US$9.16/t of CO₂ and lower prices for companies using approved reduction plans or meeting technology benchmarks. Research by Reccessary indicated that Taiwan Cement might face a carbon tax bill of US$41m and Asia Cement could be looking at US$28m based on 2023 data. These additional costs will increase operating costs and reduce profits.

All of this may sound familiar because it has already happened in Europe. Some form of carbon trading or taxation is introduced and then the debate moves on to carbon leakage via imports. The cement industries in Indonesia and Taiwan are unlikely to be aggravated directly by the EU CBAM but the wider economies of both countries are reacting to secure access to export markets. This, in turn, has implications for a heavy CO₂-emitting sector like cement. For example, if a CBAM isn’t already being considered in Indonesia, local heavy industry is likely to start lobbying for one, if the new ETS starts affecting import rates.

The Minister of Environment in Taiwan and others before him have identified that climate policies can be protectionist. As more countries regulate local carbon emissions, more trade disputes look likely. The big one right now might be the growing argument between the US Trump administration and the EU. Yet, every time a country sets up a new carbon scheme, a potential new argument over trade is brewing. And cement producers in Indonesia, Taiwan and everywhere else are stuck in the middle of all of this.

Vietnam: The General Department of Vietnam Customs recorded exports of cement and clinker of 29.7Mt in 2024, down by 5% year-on-year from 2023 levels. Producers and exporters generated US$1.14bn in revenues from the exports, down by 14% year-on-year.

Việt Nam News has reported that the Philippines topped the list of importers of Vietnamese cement, with 8.01Mt (27%), down by under 1%. Bangladesh imported 5.49Mt (19%), up by 11%, and Malaysia imported 1.68Mt (6%), down by 3%.

Vietnam: The general director of Vietnam Cement Industry Corporation (VICEM), Nguyen Thanh Tung, says that Vietnam will suffer continued cement overcapacity amid high production costs in 2025. Full-year production is forecast at 125Mt, 96% greater than an expected domestic demand of 63.5Mt. Việt Nam News has reported that Vietnam’s cement exports face an on-going investigation in Taiwan, and are already subject to anti-dumping duties in the Philippines.

VICEM aims to raise its domestic clinker sales volumes by 8% year-on-year to 18Mt, in order to generate sales of US$1.16bn. To this end, Tung urged the government to adopt cement reinforcement in roadbuilding, as well as lifting the export tax on cement.

PPC revealed plans this week to build a new cement plant in the Western Cape region of South Africa. It has entered into a “strategic cooperation agreement” with Sinoma Overseas Development Company to put together a 1.5Mt/yr integrated plant for around US$160m. It is hoped that construction will start in the second quarter of 2025 with commissioning scheduled by the end of 2026.

CEO Matías Cardarelli described more details about the project during a tie-in webcast on 16 January 2025. Specifically, the new unit will be built at the company’s integrated Riebeeck Plant site due to the quality of the local limestone and the greater reserves. In addition, all the key environmental approvals and mining rights have already been obtained. Both this plant, and the nearby De Hoek Plant, will continue to run throughout the construction and commissioning period. A decision will then be made about required staffing. PPC did not explicitly say whether the two old plants would be closed but the new plant will “replace and increase the existing capacity” at the other sites.

Points to note from the announcement start with the low cost for the clinker production line. PPC’s 1Mt/yr line at its Slurry plant cost around US$75m when it was commissioned in 2018. Sinoma also built that one. However, negative currency exchange effects make comparisons tricky. In 2015 PPC said that the cost of the Slurry line was around US$115/t. It pointed out that the price was low as it was a brownfield investment. This compares to US$107/t for the Western Cape project, another brownfield project. Other recent integrated plant projects in Sub-Saharan Africa to consider include Cemtech’s clinker plant in Sebit, Kenya (US$170/t) or West International Holding’s forthcoming plant in Buikwe District, Uganda (US$150/t). Plans for a new PPC plant in the Western Cape go back to at least 2017 when the then CEO Johan Claassen said it was preparing for a ‘mega plant.’ At the time it was hoping to replace its Riebeeck plant with a ‘semi-brownfield’ facility that would use around 25% of the current plant’s equipment. The scheme had actually been around longer but Claassen remarked that insufficient domestic demand had held it back.

The next detail to consider is that PPC is planning to build this new plant within 100km of the coast. This was addressed directly with PPC saying that the new plant would be “extremely competitive” against imports. They say it will be able to produce cement, at least, to a similar cost to imports from Vietnam. It was also remarked that only 10 - 15% of the 1Mt/yr of imports, mainly from Vietnam, go to the Western Cape with the rest heading to KwaZulu-Natal via the Port of Durban.

PPC’s plans in Riebeeck are part of its ‘Awaken the Giant’ development strategy. For its six month financial results statement to September 2024 it said that it had “early positive and encouraging signs in all lines of our business.” In South Africa its earnings were up despite lower sales volumes. Dangote Cement’s local subsidiary, Sephaku Holdings, reported a similar picture with a small bump in revenue and earnings back up after coal and fly ash supply constraints a year earlier. PPC isn’t the only cement company developing capacity. Huaxin Cement-owned Natal Portland Cement was reportedly investing US$65m in the autumn of 2024 towards expanding its Simuma Plant in KwaZulu-Natal.

The cement sector in South Africa had a couple of ownership changes in 2024. As mentioned above, China-based Huaxin Cement bought Natal Portland Cement from InterCement at the start of the year. Then, Afrimat received approval to buy Lafarge South Africa in April 2024. Both of these incomers have clear ambitions to expand in the industry. In this context PPC’s decision to finally revive its Western Cape plans, before whatever its new competitors devise, makes sense. Expect more talk of capacity upgrades in the future.