Development Orientations for Cement Industry: Meeting Construction Demand

Development Orientations for Cement Industry: Meeting Construction Demand

With the development objective for the cement industry of satisfying the national development demand and becoming a strong industrial sector capable of competing on the domestic and international market, the Prime Minister has promulgated a decision approving the Planning on the development of Vietnam’s Cement Industry to 2010 and its orientations to 2020. 

Accordingly, development priority will be given to expansion projects operating in the southern and central regions as well as the mountainous provinces in the North. The new investment will not be put in the cement blast furnaces and grinding stations having no link to domestic clinker production units. Concretely, the special encouragement is provided to projects having a capacity from between 1 million tonnes per year upwards. At the same time, the production capacity of existing cement production units will be maximised for satisfying the local demand. For projects of over 3,000 tonnes of clinker per day, it is required that the material reserves should be adequate for continuous production for 30 years. For projects of less than 3,000 tonnes of clinker a day, the material reserves should be sufficient for production for 20 to 25 years. The Government intends to diversify the material sources and fuels for cement production using the waste of other industries and shifting from blast furnaces to reverse furnaces with a gradual termination of using the old technology before 2020.

Currently, the cement industry has 13 plants with an investment of over USD3,774 million providing more than 18 million tonnes of cement per year. With over 20 cement plants under construction having the total capacity of more than 30 million tonnes and the existing exploitation rate, by 2008, the cement industry will be able to supply an additional amount of 18 to 20 million tonnes of cement per year.

To resolve the capital problem, these projects will maximise domestically mobilised capital sources and diversify their investment forms to attract different economic sectors to invest in cement production. For the operating foreign invested projects, if they desire to expand their production, the legal capital of Vietnamese parties should be raised to reach the rate of 40per cent upwards.

One important measure for developing the cement industry is mobilising the capacity of mechanics, metallurgy, informatics and automation sectors in research, design and manufacturing equipment, technological lines and spare parts for the cement industry to increase the domestication rate.  Cement projects having a production capacity over 1 million tonnes per year and grinding stations of 0.5 million tonne downwards will be implemented under direct contract appointment by project heads to competent Mechanic Corporations as the main contractors for designing, manufacturing and supplying synchronous equipment. For large cement projects, home-made equipment and machinery should reach at least 60per cent of the weight and 30per cent of the value.

The projects investing in cement production are trying to meet advanced norms on fuel and material consumption, dust concentration in the exhaust fumes, noise volume, automation ratse, domestication rates, productivity enhancement, product diversification, quality insurance, production cost reduction for competing with the same products provided by other countries in the region and internationally. One direction hoped to foster technology application is that the Government is accelerating the process of shifting 20 cement plants from using the blast furnace technology to reverse furnaces. These plants currently turn out only about 2 - 3 million tonnes of cement per year, equalling 1-2 modern reverse furnace plants. Recently, although they have met the local demand, these plants have been technologically backward causing environmental pollution.

To follow this planning, the cement market will see new changes. According to experts, in the long-term, besides stable cement prices, the development of the cement industry will contribute a significant part to boosting the technology progress satisfying the economic development and employment provisions for society.

• Bich Hanh