Cement enterprises start early

The race between cement producers in a market with an excess supply of about 10 million tons is increasingly fierce and promises many changes of position.

“Production and business activities of all cement factories of The Vissai Cement Group have been started since the 6th day of Tet, February 13, 2016, along with the trucks delivering cement to purchasing units taking place as usual.”

Mr. Nguyen Tien Dat, Deputy General Director of Vissai Group, talked about the production and labor spirit after the Tet holiday.

While workers in many other industries have a 9-day holiday, the Tet holiday of manufacturing enterprises is somewhat different. According to Mr. Dat, with the specific nature of production such as cement, maintaining production, ensuring sufficient supply of goods, meeting customer needs, and not stopping any stage in the production and circulation process is mandatory.

Worrying about product output is a headache for all cement businesses in 2016.

2015 marked a strong transformation of Vissai Group when it simultaneously maintained stable production at existing lines, but still ensured good investment in phase 1 of Song Lam Cement Factory (Do Luong, Nghe An). With 2 lines built at the same time in phase 1, the scale of Song Lam Cement Factory has reached 4 million tons of cement/year and a total investment of over 10,500 billion VND.

Saying "strong transformation" because along with the decision to invest in Song Lam Cement Factory, Visai Group had to prepare for a "huge" increase in output.

At Vicem Hoang Thach Cement Company (Hai Duong), a member of Vietnam Cement Industry Corporation (Vicem), the campaign started on the 2nd day of Tet, the morning of February 9, 2016, with the first batch of clinker leaving the factory. According to the representative of Hoang Thach Cement, even during the Tet holidays, the Company still arranged regular staff to maintain the stability of the production line and on the 8th day of Tet, the entire Company launched.

In 2015, Vicem Hoang Thach successfully completed the planned targets, in which total cement and clinker products consumed reached nearly 4.3 million tons, low inventory, profit reached 561 billion VND, budget payment was 233 billion VND, increased by 12.5% ​​compared to 2014.

Production and business efficiency increased thanks to the company's increased savings in costs, raw materials, fuel, and materials, and promoting in-depth investment in modern production lines.

Mr. Le Thanh Long, General Director of Vicem Hoang Thach, said that the results achieved in 2015 showed that the Company had made efforts to “reach the finish line”, but 2016 was still not an easy year for cement enterprises due to fierce competition among suppliers. There was an excess supply while market demand was not forecast to increase dramatically, so in order for production and business activities in 2016 to run smoothly, all efforts and initiatives in production must be implemented right from the beginning of the year.

In 2016, the Company strives to run 3 furnaces continuously for long periods of time to maximize the efficiency of the production lines. At the same time, it continues to align production, restructure sales, especially the core market, gradually improve competitiveness and production and business efficiency, creating the premise for investing in an additional grinding station in the near future.

It should also be added that, despite having a brand advantage, because Vicem Hoang Thach is strongly favored, especially in the North, Hoang Thach is also a unit located in an area with many factories, facing fierce competition from joint venture cement companies such as Phuc Son, Thang Long, Cam Pha, Vinacomin, etc., which have advantages in selling prices.

Worrying about product output is a headache for all cement enterprises in 2016 when supply continues to increase, while domestic cement consumption demand only increases by less than 10%.

According to the calculation of the Ministry of Construction, in 2016, the cement consumption demand of the whole industry is about 75 - 77 million tons, an increase of 4 - 7% compared to 2015, of which domestic consumption is about 59 - 60 million tons, export is 16 - 17 million tons.

For export channels, 2016 is not expected to be positive, due to competition with cement from Thailand, Indonesia, and China.

Therefore, for Vicem Hoang Thach, to complete the production target of 3.19 million tons of clinker, 3.9 million tons of cement, achieve revenue of 4,940 billion VND, profit of 554 billion VND, and pay budget of 211.8 billion VND is a non-stop race, requiring creativity and flexibility in production management, and doing a good job in market work right from the beginning of the year.

As for The Vissai Group, the task will be even more difficult when, according to the plan, in October 2016, phase 1 of the 4 million ton Song Lam Cement Plant will be put into operation, bringing products to the market and the pressure on output can be said to be not easy.

According to Baodautu