What is the solution for the cement production project in Anh Son?

(Baonghean) -It was thought that the 12-9 Anh Son Cement Factory, after receiving "support" from the Vietnam National Oil and Gas Group, could complete the project with a total capacity of 600,000 tons/year using modern production technology. However, after many years of implementing the project, more than 800 billion VND invested by the investor is "shelved". And it is also sad that the 19/5 Military Cement Factory project, after many years of production, but after looking for a joint venture partner to innovate technology, increasing the capacity to 430,000 tons/year, has fallen into a "half-alive, half-dead" situation...

Vertical kiln line of Anh Son 12/9 Cement Factory.

Mr. Nguyen Trong Quang in Hamlet 9, Hoi Son Commune, said: “I have been working at the 19/5 Military Cement Factory for nearly 20 years and have become one of the highly skilled workers on the cement production line, but now the company is in a difficult situation and is no longer operating, so I had to quit my job and am currently waiting for my insurance book to close. I am currently receiving unemployment benefits for the 5th month (VND 2,105,000 per month) and only 1 month left until my unemployment benefits expire. To make a living and raise my children, I decided to open a kiosk to wash motorbikes and cars. My wish is to continue working to pay insurance until retirement age.”

19/5 Military Cement Factory, in its heyday, had 435 officers and employees and was one of the prestigious cement production units in Anh Son area. Due to the outdated technology of vertical kiln cement production, the enterprise decided to invest in a joint venture to renovate the production line, modern technology (capacity of 430,000 tons/year with a total investment of 548 billion VND) and the investor has completed the work of mine clearance, site clearance, signed an EPC contract to supply equipment for the line and construct auxiliary works, including offices, water supply systems, fences... However, due to lack of economic potential, and investing in a period when the government tightened investment, this important project is now at a "dead end" and the consequences have pushed hundreds of cadres and employees to unemployment, the enterprise owes billions of VND in insurance... Currently, the unit only maintains a construction material stone mining team of more than 30 workers.

At Anh Son 12/9 Cement Factory, the production and business situation on the old production line (vertical kiln) invested in 1996 - 1997 is currently operating in a "holding out" manner, waiting for the opportunity to complete a new project. It is known that in 2013, the unit produced more than 62,000 tons of cement and in the first 5 months of 2014, it produced nearly 30,000 tons, of which 25,000 tons of cement served the new rural program. Although the income is not high and the jobs are not really stable, but anyway, the staff and employees of the 12/9 factory are still much luckier than the 19/5 cement production unit.

It is known that since 2005, Anh Son 12/9 Cement Factory decided to change its investment direction, looking for a joint venture partner to change to modern production technology, improve production capacity, but during the implementation process, this unit had to go through many difficulties with unfinished contracts... From the end of 2006 to mid-2007, the enterprise completed the negotiation documents for investment loans from Trieu Cong Mechanical Company Limited (Trieu Duong - China) to increase the capacity from 88,000 tons to 600,000 tons/year, but it did not come true because it could not solve the counterpart capital.

After more than 2 years of interruption due to not finding a joint venture partner, by the end of 2009, Anh Son 12/9 Cement Factory started construction of a new project due to merging into a member unit of the Vietnam National Oil and Gas Group and very quickly, the project to upgrade capacity to 600,000 tons/year was implemented with a total investment of more than 810 billion VND. Mr. Nguyen Xuan Hung - Deputy Director of Petroleum Cement Joint Stock Company said: "Up to now, the investor has invested more than 800 billion VND in this project and currently 97% of the equipment and machinery have been imported and 95% of the factory construction volume has been completed. In particular, the company has completed the installation of rotary kilns, crushers, crushers, bagging stations, electrostatic dust collection systems... Since the temporary suspension of equipment installation (June 2013), this work has not been restarted and the entire project is stalled due to lack of investment capital and if this problem is resolved, it is only necessary to continue completing construction items, calibrate equipment... to be able to go into operation".

Construction started on November 26, 2009 and according to the plan, in December 2011, the project to upgrade the Petroleum Cement Plant will be completed and put into production, but the investment time is right at the stage when the economy is facing many difficulties due to the implementation of investment tightening policies, high loan interest rates and especially corporations and general companies having to divest capital in projects and investment fields outside the industry... so this project has encountered many difficulties in capital and has been interrupted. The expected capital source is 810 billion VND, but due to high loan interest rates, fluctuating exchange rates (importing machinery and equipment) and high worker salaries... the investment capital of the project has increased. According to the re-evaluation of the investment capital to complete this project, it is about 1,300 billion VND and currently, the investor has invested more than 800 billion VND, but at the "final" stage, the project has not been completed (because the Vietnam National Oil and Gas Group has withdrawn capital).

According to Mr. Nguyen Xuan Hung - Deputy Director of PetroVietnam Cement Joint Stock Company, "To continue implementing the project, the company needs to increase its charter capital and meet some conditions of the banking industry, then it will be able to borrow capital to implement the project. However, in the current difficult times, it is very difficult to meet those conditions." The project to upgrade the PetroVietnam Cement Factory is currently in a "dilemma" and has been suspended for nearly a year. Because this is one of the important cement investment projects in Nghe An, if it is not continued, it will not only cause a great waste of capital, but also affect the investment attraction environment in our province, so recently, the Provincial People's Committee has proposed that the Government pay attention and create favorable conditions for the project to operate, along with that the province has had working sessions with relevant ministries, branches and especially with the Vietnam Oil and Gas Group to discuss and find solutions to remove difficulties for this project, accordingly, the province wishes that the Vietnam National Oil and Gas Group continue to invest in completing the 12/9 Anh Son cement project.

Achieving a total output of more than 1 million tons of cement per year through 2 large cement production projects in the area to create a lever for socio-economic development of Anh Son district, but after a period of implementation, it has not yet become a reality. The two large cement projects in Anh Son are in a difficult situation, thousands of workers of the 2 factories are facing the risk of unemployment when the enterprise declares bankruptcy. The factory's suspension of operation also causes the locality to lose a significant source of revenue for the budget. This is an issue that investors as well as the locality need to actively find measures to overcome difficulties to put the project into operation soon.

Cam Dong Sect