21/11/2017

Market Research @ Vietnam: Cement Industry Report

Vietnam cement industry report


Vietnam cement market insights industry report conducted by NMK LLC, a company operating in Vietnam market research industry, provides deepth information about local cement players covering VICEM, Holcim, Nghi Son, Chinfon, and other big local players. The industry report focuses on market share, designed capacity, prices, marketing strategy, distribution system, and techonology.

Cement manufacturers located mainly in the Northern where has huge resources of limestone, main material for producing cement products. Some cement factories have plants in the South, and very few companies operate in the Central.

The lack of cement supply in the South and the Central lead cement players to move their distribution centers or grinding plants to these areas. Finished goods or semi products, known as clinker, are transported to these areas for packaging or grinding.

Due to nature of distribution model in cement industry, factories which own ocean ports have huge advantages compared with those not owning own ocean ports. Transportation by vessel always has lower cost more than by other type. There are 5 cement companies have own port including Nghi Son, Holcim, Thang Long, Ha Long and Cam Pha.

Largest factories normally set up distribution center or grinding factory in both the South and Central area where they move products from main factory to DC or grinding plant for selling products.

Among cement factories in Vietnam, VICEM, Vietnam Industry Cement Corporation, maintains their leading positon in local market with market share around 35.5%. Joint venture companies sum up to take around 28% of market share. JV companies take crucial role in local market in recent years and forecasted to surpass VICEM in upcoming years.

VICEM relies mainly on Ha Tien, Bim Son, But Son and Hoang Thach, but low investment on technology and upgrading designed capacity will pull it back in competitiveness manner. Foreign investors who are now operating in Vietnam and intending to invest in cement industry will take the revolution in mergers and acquisitions. Thais cement manufacturers acquired local cement companies such as Thang Long or Holcim.

As of 2017, 3 newly built factories started to produce products including Long Son 2, Thanh Thang 2, and Xuan Thanh 2 which lead to increase country's designed capacity up to 99 million tons per annum. As planned to 2020, surplus on cement industry continue to increase with the upgrade of Song Lam 3,4, Kaito, and Tan Thang. According to forecast of Vietnam National Cement Association, country's demand is forecasted to reach at 82 million ton in 2020 and surplus around 36-47 million tons.

Vietnam cement companies, thus, must focus on export in lieu of local market. Reducing export rate at 0% from February 2018 and refundable VAT might help local cement factory promote their export of cement and clinker. However, it raises a question about efficience of resource usage.

As of August 2018, total domestic consumption was estimated to reach at 43.76 million tons while export volume was accounted for 20 million tons, surpassing year forecast of 18-19 million tons.

Investors interested in cement industry might order our full research by contacting research team at ic@51lixinbeng.cn or calling to +84 33 7572 999 for support.