Hai Duong cement production enterprises face one difficulty after another

As a big brand in the country, the consumption of Vicem Hoang Thach Cement One Member Co., Ltd. is decreasing significantly.

Cut both output and labor

According to Mr. Vu Thanh Binh, Deputy Director of Phu Tan Company Limited (Kinh Mon), after renovation and upgrading, Phu Tan Cement Factory has reached a capacity of 440,000 tons/year. However, due to the difficult consumer market, the enterprise has had to continuously reduce production scale. From the beginning of 2023 until now, the factory has stopped production for 10 months. The factory's cement and clinker output has decreased from 477,000 tons in 2022 to 330,000 tons in 2023 and in the first 6 months of this year, it is estimated to be only 11,000 tons.

In the first 6 months of this year, Phuc Son Cement Joint Stock Company (Kinh Mon) only sold about 134,000 tons of various types of cement, equivalent to nearly 8% of the factory's capacity. From December 31, 2023 to early July, the company's workforce decreased by 113 people, leaving only 485 people. The unit had to dissolve a packaging production department, with an average income of only 8.6 million VND/person/month.

Established in 1996, by the end of 2009, the second production line of Phuc Son Cement Joint Stock Company came into operation, increasing the total capacity of the factory to nearly 4 million tons of cement/year and creating jobs for more than 1,000 workers... According to the representative of Phuc Son Cement Company, if all cement manufacturing enterprises have difficulties in the market, Phuc Son Cement in particular has even more difficulties because it has lost a lot of market share.

Thanh Cong Construction Materials Production Joint Stock Company is no exception. The unit has 3 factories including Thanh Cong I in Kim Xuyen commune (Kim Thanh), Thanh Cong II in Duy Tan ward and Thanh Cong III in Hiep Son ward (Kinh Mon). In the first 6 months of this year, the company only achieved an output of 120,000 tons of various types of cement and 150,000 tons of clinker, equal to about 70% of the average output in the 6 months of the years before the Covid-19 pandemic. The company's workforce has decreased by 30%, to about 600 people. Since the beginning of 2023, the company has maintained over 50 agents in the northern region, but the amount of products consumed has still decreased significantly.

Many cement manufacturing enterprises have to cut labor due to difficulties.

Vicem Hoang Thach Cement One Member Co., Ltd. has the largest production scale in Hai Duong province with 3 production lines with a designed capacity of about 3.5 million tons/year. The company's difficulties began in 2023 and have continued until now. The company's revenue in 2023 reached only VND 3,692 billion, down 23% compared to 2022, only reaching 87.5% of the plan; profit after tax in 2023 reached only VND 23.6 billion, down 85% compared to 2022.

Entering this year, the company is still struggling with mounting difficulties. To reduce the amount of unsold products, the company had to stop line 1 from January 18, 2023 to present. Line 2 had to stop from December 18, 2023 to February 9, 2024 for repair and maintenance. Despite being a strong brand in the Vietnamese cement "village", Hoang Thach Cement still has unsold products. In the first 6 months of this year, the company produced more than 1.67 million tons of cement and nearly 1.1 million tons of clinker, equal to about 86.5% of the same period in 2023. Cement and clinker consumption only reached 86.2% compared to the same period.

2023 is considered the most difficult year for consumption in the more than 120-year history of Vietnamese cement. In the first 6 months of this year, supply still far exceeded demand. The industry's total design capacity currently reaches 120 million tons/year, which can increase to 130 million tons/year thanks to the application of science and technology, double the domestic cement consumption demand. In addition, the real estate market has been "frozen" for many times, public investment has been difficult... so the cement production industry has also faced difficulties.

Exporting cement and clinker must compete fiercely. Due to the surplus domestic market, China has gone from being the largest importer of Vietnamese cement to becoming a direct competitor of Vietnamese cement in Central America, South Africa, etc. Not to mention the Philippines implementing technical trade barriers to protect domestic cement production or carbon emission reduction mechanisms in the EU market, etc.

Hope

The Prime Minister's directives open up new hope for the cement industry nationwide as well as Hai Duong.

On the morning of June 15, 2024, the Prime Minister chaired an online conference on removing difficulties, promoting production and consumption of cement, steel and construction materials. Construction material enterprises were suggested to restructure human resource management, reduce production costs by utilizing excess heat in production, using waste to replace fuel, and industrial waste to replace natural materials. Restructuring capital sources, reviewing investment efficiency and restructuring products to ensure compliance with market demand, improving competitiveness...

Representing Hai Duong cement enterprises directly attending the above conference, Mr. Le Van Dinh, Director of Thanh Cong Construction Materials Production Joint Stock Company shared: "The Prime Minister is very close to the difficulties, production and consumption situation of the construction materials production industry, especially cement. The Prime Minister's instructions are a new hope in removing difficulties for enterprises."

The Government continues to direct ministries, branches, localities and relevant agencies to effectively implement the Vietnam Construction Materials Development Strategy for the 2021-2030 period, with a vision to 2050. The banking system needs to consider restructuring and increasing outstanding loans, reducing interest rates for businesses, especially cement producers. The Ministry of Finance considers reducing clinker export tax...

“Hai Duong is focusing on promoting public investment, building transport infrastructure, irrigation, investing in urban infrastructure development, building advanced and model new rural areas... In wards in urban areas from type III and above, residential land that wants to be transferred must have houses and constructions on the land, so it will contribute to promoting cement consumption,” said Mr. Nguyen Trong Hai, Deputy Director of the Department of Construction.

PV

Source: https://baohaiduong.vn/cac-doanh-nghiep-san-xuat-xi-mang-hai-duong-gap-kho-chong-kho-387327.html