Displaying items by tag: Vietnam
New production lines approved for Long Son cement plant
06 December 2018Vietnam: Prime Minister Nguyen Xuan Phuc has approved an upgrade to the Long Son cement plant in Thanh Hoa province. The plant will have two new production lines with a total production capacity of 2.3Mt/yr, according to the Viet Nam News newspaper. The new lines will also include waste treatment systems. Line 3 is expected to begin operation in 2020 and line 4 in 2021. The Ministry of Construction has been assigned to work with the Ministry of Natural Resources and Environment and the provincial People’s Committee to supervise the project.
Prime Minister calls for overcapacity report
26 November 2018Vietnam: The Vietnamese Prime Minister Nguyen Xuan Phuc has asked the Ministry of Construction and VICEM to report on the country’s excess cement capacity, which is set to reach 25-36Mt/yr by 2020.
The latest statistics from the Ministry of Construction’s Building Material Department show that cement consumption was approximately 45Mt in the first half of 2018, a rise of 30% year-on-year compared to the same period of 2017, and more than 50% of the year’s plan.
The sector’s capacity is 110Mt/yr, including the volume from plants expected to be built in 2018. Aside from that, existing plants have kept improving technology so their production capacity might reach 120-130Mt/yr by 2020.
Three large projects with the total capacity of 10Mt/yr were put into operation in the past 12 months. In 2019 many more projects are expected to come into operation, with a total new capacity of 12Mt/yr coming online.
Vietnamese official links low export price to quality
21 November 2018Vietnam: Associate Professor Dinh Trong Thinh, of the Academy of Finance – part of the Ministry of Finance, has conceded that exported cement from the country has a low price due to the poorer quality of some of its product. In an interview with the ministry’s press service, Vietnam Economic News, he said that some smaller and medium-sized cement producers use old technology such as shaft kilns, according to Việt Nam News newspaper. He added that local producers were forced to export cement at lower prices than it is sold domestically to reduce inventory. He noted that this was not sustainable in the long run due to production costs and overseas competition.
Ha Thanh Cement blocked from building a new grinding plant
15 November 2018Vietnam: Ha Thanh Cement has been blocked from building a 0.5Mt/yr grinding plant in the Tran De Industrial Park in Soc Trang province. The Ministry of Construction said it did not conform to current regulations, according to the Việt Nam News newspaper. The ministry added that the company could not set up the grinding plant as there was no clinker line with the same output capacity in the region. It cited Planning 1488 on Vietnam’s cement development for the 2011 - 2020 period, with vision until 2030. Existing regulations require all cement grinding plants to accompany clinker production lines and do not allow for any standalone grinding plants.
Vietnam: China has become the largest importer of clinker and cement from Vietnam in the first nine months of 2018. It imported 6.56Mt with a value of US$235m, according to the Việt Nam News newspaper. The Philippines, Bangladesh and Taiwan were the next largest importers with 4.75Mt, 5.64Mt and 1.23Mt respectively.
Tan Thang Cement orders more integrated digital automation and electrical equipment from ABB
19 September 2018Vietnam: Tan Thang Cement has ordered additional integrated digital automation and electrical equipment from Switzerland’s ABB for a new 2Mt/yr plant it is building in Nghe An province. The order is a follow- up order to the initial automation and electrical systems delivery from ABB for this site, which is currently under construction.
The follow-up order includes a 110kV AIS Substation (Air Insulated Substation), with a SCADA (Supervisory Control and Data Acquisition) system based on ABB Ability System 800xA for Power Control, as well as telecommunications, and High Voltage primary and secondary equipment to support the electrical infrastructure. ABB will also deliver power transformers, distribution transformers, an Intelligent Motor Control Centre, Auxiliary Control Centre, Emergency Diesel Generator, DC power supply, various field devices and related commissioning services.
ABB’s initial delivery included ABB Ability System 800xA DCS (Distributed Control System) to integrate control, electrical and communication systems for optimal visibility into all processes for stable production and efficient use of raw materials and energy. It also included ABB Ability Knowledge Manager and Expert Optimizer software, as well as basic communication and electrical system infrastructure and equipment.
The project is scheduled to be commissioned in late 2019.
Unpacking cement exports
05 September 2018What’s long, thin and has already exported more than 20Mt of cement in 2018? The answer is Vietnam, which reported this week that it exported 20.1Mt of cement between 1 January 2018 and 31 August 2018. That’s 106 - 112% of its annual ‘target’ in just eight months and around the same amount as it claims to have exported during the whole of 2017. Total cement production in Vietnam was 63.9Mt between January and August 2018, meaning that the country has exported 31.3% of the cement it made over this period. Vietnam itself consumed ‘just’ 43.8Mt. The government target for Vietnamese cement consumption during 2018 is around 65 - 66Mt. That’s basically the amount it has already made.
From a market-led mind-set these targets seem fairly large, huge even, especially the export target. Indeed the concept of such national targets is in itself an alien concept. In most of the world, imports and exports are results of market supply and demand trends, not drivers prescribed by the government.
The reasons behind this apparent desire to export these very large volumes of cement are, therefore, probably best understood from within Vietnam, and we won’t speculate too much on them here. However, Vietnam is clearly determined to continue to produce ever more cement than it can use. In what other country could a major government-owned producer export more than 70% of the cement it makes? In the first half of 2018 Vicem did just that, shipping 11.7Mt of cement overseas from the 14.2Mt that it made.
In 2017 Vietnam’s export target was 15Mt. It ended up smashing this to the tune of 5Mt, 33% more than the target. At the current rate the sector looks like it could overshoot even more spectacularly this year, perhaps hitting as much as 30Mt of cement exports in 2018. This is more than a big European country like Germany can produce! It certainly sounds like a lot but… is it really an exceptional number?
Looking at data from World’s Top Exports (WTEx), which we advise delving into, it seems that this would be a very high number indeed. It reports that a total of 166.6Mt of cement were exported internationally in 2017. It reports that the top exporter was not, as you may by this point have been primed to suggest, Vietnam. It wasn’t even China, as the former number one was bumped into second place (12.91Mt) by Thailand (13.03Mt). Turkey was third (12.79Mt), with Japan fourth (11.93Mt) and Vietnam was listed as fifth (9.53Mt).
All of these biggest exporters except Turkey are in the Far East, an area swamped with cheap cement. China’s average export selling price according to WTEx was US$45/t, against a global average of US$55/t. Thailand undercut it by US$3/t at US$42/t, perhaps explaining its rise to the top spot. Turkey’s average export price was also US$42/t, although it is located in a region that has a lot of saturated markets and others that are growing rapidly. Its average export distance was second only to China’s. Vietnam’s average cement export price was US$51/t, higher than the others. This does not tie in with the apparent rise in exports so far in 2018. This price may have since fallen. Surprisingly, Japan had the lowest export price of the top five exporters by volume at just US$30/t in 2017.
So, to re-answer the question posed two paragraphs above, 30Mt is a very high number indeed. But you’ll have spotted the large discrepancy between WTEx’s 9.53Mt figure for Vietnam, which relies on reciprocal import partner data, and the government’s official line of 21Mt for 2017. One is tempted to ask where the other 50% of the exports reported by the Vietnamese actually ended up, especially given that WTEx reports a US$1.5bn difference in the value of exports and imports across the year. Imports were valued at US$8.8bn but exports were valued at US$10.3bn.
The mystery destination of all that cement, real or imagined, could be the topic of an entire separate column. What appears to be the case at present, is that rampant Vietnamese cement overcapacity is here to stay. The country, as well as Japan, Turkey, Thailand et. al., could stand to benefit in the short term, as China acts ever more aggressively to end its own oversupply situation. However, there could come a time when it has to take its foot off the gas. There are no signs of that yet though.
Vietnam exceeds 2018 cement export ‘target’ in just eight months
04 September 2018Vietnam: The Vietnamese cement sector exported 2.01Mt of cement in August 2018, a 44% year-on-year increase but 90,000t less than in July 2018. During the first eight months of 2018, cement exports reached 20.1Mt, exceeding the whole year target of 18-19Mt, according to the Ministry of Construction’s Building Material Department (BMD).
Total production stood at 63.9Mt in the first eight months, a year-on-year increase of 30%. The domestic market consumed 43.8Mt. According to the BMD, the industry is likely to reach its consumption target of 65-66Mt in the domestic market for the whole of 2018.
On top of Vietnam’s current large cement capacity, the list of cement projects that are expected to come into operation after 2018 include some very large capacity projects. These include Sông Lam Cement’s production lines 3 and 4 with a total capacity of 3.8Mt/yr, Thái Nguyên Group’s Hà Tiên Cement Project in Bình Phước with an annual capacity of 4.5Mt/yr and the Tân Thắng Cement Project in Nghệ An Province with an annual capacity of 1.8Mt/yr.
Vietnam: SCG Vietnam’s sales revenue rose by 20% year-on-year to US$639m in the first half of 2018. The subsidiary of Thailand’s SCG reported faster sales growth in the second quarter of 2018, according to the Viet Nam News newspaper. Sales increased by 28% year-on-year to US$371m in the second quarter.
Vietnam: Vietnamese cement exports in the first seven months of 2017 reached an estimated 17.8Mt, a year-on-year increase of 55% and close to the 18-19Mt target for the entire year. Exports of cement in July 2018 alone were estimated at 2.1Mt, an increase of 43% over July 2017.
During the seven month period, consumption of cement from Vietnamese producers in both domestic and export markets was estimated at 58.3Mt, equal to 69% of the year’s target 83-85Mt.