The master development plan for the country’s cement industry from 2011 to 2020 approved by the prime minister goes in line with market movements and there is no cement crisis caused by the scheme, said the minister of Construction.
Trinh Dinh Dung told an online forum organised in Hanoi on Tuesday that the country last year consumed 55 million tonnes out of 64 million tonnes of cement output. Thus, consumption accounted for 89 percent of production.
“I confirm that there is no cement crisis caused by the development scheme as raised by some people,” said the minister.
The country currently has a huge cement surplus given low domestic consumption. Under public spending cut policy, the number of construction works is falling, pushing down building materials consumption including cement, he explained.
The country is forecast to absorb 55-56 million tonnes of cement this year, accounting for 80 percent of output. The cement industry is facing difficulties under the gloomy outlook for all business sectors.
“We can’t say that the cement development plan triggers an oversupply crisis,” said Dung.
One of the biggest questions is why the country still imports cement when it faces huge inventories. The minister explained the country must stick to Afta commitments, which stipulated Asean members cannot impose import bans or tariff barriers on cement.
Furthermore, market forces also prompt cement imports, he said.
Cement is mainly produced in the North, resulting in high cement price in the South due to transport fees. Sometimes, the price of local products gets higher than that of products imported from Thailand.
“In a market economy, the country must import goods from overseas markets at competitive prices if domestic production shows low efficiency,” said the minister.
There has been a steady decline in the amount of imported clinker over the past few years. In particular, the country imported 3.5-5 million tonnes of clinker annually before 2010 but the amount has dropped to one million per annum since then thanks to the development scheme.