Cement exports need long-term strategy

Due to the trend of oversupply, cement export was once considered a temporary solution for businesses to consume products. However, according to experts in the construction sector, a long-term strategy is needed to take advantage of Vietnam's advantages in cement export.

Exports increase

Mr. Le Van Toi, Director of the Construction Materials Department, Ministry of Construction, said that in 2014, of the total cement consumption of 70.58 million tons, an increase of 15% compared to last year, domestic consumption reached 50.9 million tons, an increase of 10%. Exports alone reached 19.68 million tons, an increase of 30% compared to 2013, of which cement exports increased by 4.44 million tons and clinker by 15.24 million tons. These figures show that cement exports have gradually become one of the important consumption channels of the Vietnamese cement industry.

Cement production at Bac Giang Cement Joint Stock Company.

Deputy General Director of Vietnam Cement Industry Corporation (Vicem) Bui Hong Minh also said that the reason why Vietnam's cement exports increased in 2014 was because the world's demand for cement increased but some cement exporting countries such as China, Thailand, Indonesia... did not increase their supply. Moreover, enterprises also accumulated a lot of experience in exploiting the market, negotiating contracts... to make export activities more favorable. Thanks to that, in the past few years, cement exports have not only contributed to balancing supply and demand but also become an effective channel, contributing to regulating the quantity of goods in the cement industry, helping the domestic market to be less "suffocating".

According to statistics from the Ministry of Construction, the value of cement exports is estimated at over 796 million USD. This is a significant source of foreign currency contributing to increasing the country's overall export turnover, while helping to stabilize the trade balance. Notably, the export value is higher than about 2 years ago. The average cement export price is currently at 43,155 USD/ton of product, an increase of about 2 USD/ton. Thus, Vietnam's cement export price is gradually balancing and equivalent to the general export price among countries in the region. The positive growth of cement exports in 2014 has demonstrated that cement export activities have become regular; product quality has stabilized and been recognized by the market. The value of cement exports has truly brought practical results to businesses, not a "temporary solution".

Improve efficiency

Experts in the field of construction materials believe that Vietnam has a great advantage in developing production because of its abundant raw materials, with up to 3/4 of its area being mountainous, of which limestone mountains account for the majority; at the same time, it has a long coastline with many seaports, which is very convenient for export... Enterprises have also invested in many advanced production technology lines, so Vietnam is currently one of the cement powerhouses in Southeast Asia. If cement exports need to take appropriate steps and from now until around 2025 - 2030, this is still the path to choose. However, to further improve cement export activities, there is still much to do.

Head of the Construction Materials Department Le Van Toi noted that Vietnam's cement export enterprises are still scattered and small, with low scale and concentration, so sales are mainly through intermediaries. Enterprises have not signed long-term contracts, but mostly short-term contracts. On the other hand, the transportation of exported cement is still difficult because we do not have a dedicated deep-water port for direct export, but still have to transfer from small ships to large ships offshore.

Faced with this situation, Mr. Toi suggested: In thinking, the state and enterprises should not consider cement export as a seasonal job, a temporary solution, but need to consider long-term issues to ensure high efficiency. Unhealthy competition is also a "weak point" in export activities in general. In order to increase the selling price of cement, in addition to businesses having to make maximum efforts to improve quality, there needs to be the participation of the Ministry of Industry and Trade, the Ministry of Construction, the Association of Construction Materials and a number of other departments. The goal is to create consensus among manufacturers and exporters under the "regulation" of the management agency to unify a single point of contact for cement imports. This will avoid the phenomenon of price suppression among domestic enterprises.

The cement development plan, after several adjustments, also emphasizes the goal of focusing on meeting the domestic market and reserving a portion for export. However, according to Mr. Nguyen Quang Cung, Chairman of the Vietnam Cement Association, cement export is lacking a long-term and systematic strategy. The areas where goods are produced for export should be zoned, clearly defining the production location as serving export. This is even more necessary for cement products. Factories located near seaports, with good raw material sources, having invested in large-capacity, high-tech factories should be prioritized for export because they have strong brands, low production costs and will be very effective. If exporting goods by sea but choosing factories far from the port, the route is unreasonable, costs will increase, prices will also increase, making it less effective. Therefore, there needs to be an orientation to see which enterprises are suitable to focus on export, and which enterprises will serve domestic demand.

According to news