Developments in the cement industry

(Baonghean) - During the 2010-2015 term, the province's cement development program did not meet the targets set in the resolution. However, an analysis of the reasons shows that this was due to the efforts of all levels, sectors, and localities in launching many projects, creating momentum for the subsequent period.

According to projections, by the end of 2015, the entire province produced 1.65 million tons of cement. This production volume is lower than the target set by the 17th Provincial Party Congress, which was to reach 6.4 million tons of cement by 2015. The reason is the slow progress in implementing cement projects. In addition, the implementation of Resolution 11/NQ-CP, dated February 24, 2011, aimed at macroeconomic stability, fiscal tightening, and reduction of public investment, has led to a decrease in cement consumption.

The Song Lam Cement Plant project.

However, recently, the cement sector has seen many changes and vibrant activity. Along with efforts to include the Tan Thang Cement Plant Project in the Vietnam Cement Industry Development Plan for the period 2011-2020 and orientation to 2030, approved by the Prime Minister in Decision No. 1488; and to protect and retain the Saigon - Tan Ky Cement Plant Project as a foundation for investment in the next phase, the Provincial Cement Development Steering Committee successfully advised on the transfer of the Do Luong Cement Plant Project to Hoang Phat Vissai Group. The project has now restarted construction, and the investor is currently implementing it, with completion expected in 2017.

Regarding the Tan Thang cement project, the investor has basically completed the investment preparation and related legal procedures; the site leveling has been completed and the fence surrounding the factory site has been constructed. The project has received approval from the Prime Minister to adjust the Kim Giao, Nui Len, Rang Cua limestone quarries and the Da Bac clay quarry in Quynh Luu district from the planned reserve mineral mines for expanded production and new investment needs to be added to the Plan for exploration and exploitation of mineral reserves for cement raw materials until 2020. The project has completed the bidding and contract negotiation for the procurement of the factory production line with 14 international contractors with advanced technology and state-of-the-art equipment, the best among cement projects with EU and G7 origin equipment, and high-quality equipment currently operating efficiently in the Vietnamese cement industry at competitive prices. Currently, the Provincial People's Committee is directing the implementation of investment in the construction of a 35kV power line to serve the factory construction; a water supply system outside the factory fence; and a road connecting National Highway 1A to the factory according to the planned schedule.

The Prime Minister has issued a document allowing the adjustment of the project's investment schedule from the 2011-2015 period to the period after 2015. BIDV Bank and VietinBank have signed a memorandum of understanding to arrange funding for the project with a limit of VND 3,899 billion. Currently, the investor has completed the procedures to prove the source of equity capital (approximately VND 1,100 billion). According to the plan, the credit agreement will be signed by the investor and the banks in early July 2015 to purchase factory equipment and implement the project, as well as other construction packages according to the schedule, striving to complete and put the factory into production by the end of 2017.

One of the most significant events in the cement industry was in December 2014, when The Vissai Cement Group established Song Lam Cement Joint Stock Company as the investor, officially taking over the Do Luong Cement Project and implementing a project to increase the plant's capacity from 900,000 tons/year to 4 million tons/year. Simultaneously, the investor also established a project to invest in a cement grinding plant and an international port in Nghi Thiet commune (Nghi Loc district) with a capacity of 4 million tons/year. The total estimated investment for the project cluster is 12,600 billion VND. Currently, the company is mobilizing vehicles and equipment to expedite construction, with nearly 500 people working three shifts continuously on the construction site. By the end of June, the internal road system had basically completed the road base to serve the construction work, leveled the ground for the construction of bored piles, and installed two concrete mixing plants to ensure timely concrete supply for the large-scale construction projects. According to the Department of Construction, the project received approximately 120 billion VND from the Nghe An provincial budget to invest in 5.5 km of road from National Highway 7 to the factory, as well as all compensation costs for land clearance, bomb and unexploded ordnance removal, and the construction of a resettlement area. The Prime Minister has issued a document allowing the adjustment of the project's investment schedule from the 2011-2015 period to the period after 2015.

Furthermore, in March 2015, Hoang Phat Vissai Group also acquired the 12/9 Petroleum Cement Project located in Hoi Son, Anh Son district, and renamed it Song Lam 2 Cement Joint Stock Company. Thus, after nearly two years of construction being temporarily suspended due to lack of capital, this project is expected to receive an additional investment of approximately 500 billion VND to complete and begin operations in the third quarter of 2015. Hoang Phat Group's participation in these two cement projects is highly anticipated to contribute significantly to the overall development of the province. The Song Lam Do Luong Cement Project alone, upon completion and operation, will create jobs for over 2,000 workers with stable incomes, contribute 300-400 billion VND to the local budget annually, and promote related supporting services outside the factory.

With the progress of the aforementioned projects, in the coming years (2015-2020 term), the cement production sector is expected to reach a production output of 10 million tons/year (based on the capacity of the following plants: Hoang Mai 1.4 million tons/year; Song Lam 4.5 million tons/year; Song Lam 2 (Anh Son) 0.6 million tons/year; Tan Thang 1.8 million tons/year and the Hoang Mai 2 cement plant's first line with a capacity of 2 million tons/year).

Mr. Nguyen Van The, Head of the Industrial Management Department of the Department of Industry and Trade, said: “Although cement production has not yet reached the target set in the resolution of the 2010-2015 Party Congress, in recent years, cement manufacturing enterprises have continuously expanded their production scale and invested in many advanced, environmentally friendly production lines; this has made Nghe An one of the major cement production centers in the country. With a total capacity of over 10 million tons/year, cement produced in Nghe An will not only meet domestic demand but also has plans to expand into exports. Cement enterprises are gradually stabilizing production with good product quality and low prices comparable to other countries in the region…”.

Thu Huyen