Due to lack of output, some cement factories in Nghe An have to temporarily stop production.

Cement factory stops production due to "blocked" output

Recently, cement factories in Nghe An have all been facing output bottlenecks, leading to production and business losses. At the end of the first 6 months of 2024, Vicem Hoang Mai Cement Joint Stock Company produced 780,000 tons of cement and 150,000 tons of clinker, with a loss of more than VND 50 billion.

Mr. Nguyen Trung Thanh - Director of the Sales Enterprise of Vicem Hoang Mai Cement Joint Stock Company, said: Since the beginning of the year, the domestic and export cement markets have been difficult. Cement prices have dropped, currently at 1.6 million VND/ton (down 100,000 VND/ton compared to the same period).

Song Lam 2 Cement Joint Stock Company (Anh Son district) is also facing similar difficulties. Since the beginning of 2024, it has had to stop production for 2 months. In the first 7 months of the year, the factory produced 201,438 tons of clinker, 325,347 tons of cement, with revenue of 371 billion VND, down 9.1% over the same period. The domestic and export markets are difficult, so a lot of clinker produced has to be dumped.

Teager to overcome difficulties, promote cement consumption

Mr. Nguyen Trung Thanh - Director of the Sales Enterprise of Vicem Hoang Mai Cement Joint Stock Company added: In the current difficult period, the unit has reduced production costs, applied scientific and technological advances to reduce the consumption of raw materials. Thereby, reducing product prices, competing with the market. Continuing to take care of customers as well as finding domestic and export markets.

For Song Lam 2 Cement Joint Stock Company, closely follow the actual situation, closely coordinate between production, consumption and inventory management to review, develop scenarios, and flexibly choose effective kiln operation options.

According to the report of the Department of Industry and Trade, the province currently has 4 cement factories with a designed cement output of 7.8 million tons/year; including: Song Lam Cement Factory (Do Luong) with a capacity of 4 million tons/year; Hoang Mai Cement Factory with a capacity of 1.4 million tons/year; Song Lam 2 Cement Factory (Anh Son) with a capacity of 0.6 million tons/year;... It is known that out of the 4 cement factories from the beginning of 2024 until now, 2 machines have stopped due to difficult consumption.

Recently, the demand for civil construction and public investment projects has decreased, the real estate market has recovered slowly. Therefore, cement enterprises in Nghe An have encountered many difficulties in consumption. While the amount of cement in the country is in surplus, the world demand has decreased sharply, the price of input materials has increased, and price competition is fierce, leading to the cement factories in the province operating at a standstill and operating at a loss.

In the first 7 months of 2024, the whole province produced over 4.1 million tons of cement, down 4.66% over the same period. Currently, cement factories in the province are stockpiling thousands of tons of clinker and cement.

It is forecasted that the cement industry will still face many difficulties, in which cement factories in the province are at risk of temporarily stopping production. The Department of Industry and Trade recommends that cement enterprises must closely monitor the market situation, find proactive and flexible solutions, enhance competitiveness, and seek new markets. In particular, Nghe An needs to accelerate the development of public investment, as well as speed up the progress of projects that have been slow for a long time, develop advanced new rural areas, model rural areas, and build infrastructure to help factories consume cement products.

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On June 15, Prime Minister Pham Minh Chinh chaired a national online conference to discuss solutions to remove difficulties and promote the production and consumption of cement, steel and construction materials. The Prime Minister directed the State Bank and commercial banks to have mechanisms and policies to support loans so that businesses can quickly overcome difficulties and promote sustainable production and trading of cement, steel and construction materials.
Promote public investment, build transport infrastructure, irrigation, urban and rural infrastructure, national defense and security infrastructure projects, speed up the implementation of the project to build 1 million social housing units... to promote the consumption of cement, steel, and construction materials.
The Prime Minister suggested that enterprises producing cement, steel, and construction materials need to restructure their management, finance, and investment... to improve quality and operational efficiency. Invest in machinery and purchase new, modern technological equipment to reduce fuel, production costs, lower product prices, and improve competitiveness in the market. Seek cooperation opportunities and boost exports...