Increase competitiveness
According to the report of the Vietnam Cement Association, in 2024, the cement industry exported more than 29.94 million tons of cement and clinker, earning over 1.15 billion USD, down more than 4% in volume and nearly 14% in turnover compared to 2023. In December 2024 alone, cement and clinker exports increased by 4% in volume and 3.9% in turnover compared to the previous November, reaching nearly 2.27 million tons, equivalent to over 86.04 million USD, with an average price of 37.9 USD/ton.
In 2024, cement clinker exports to the Philippines market will decrease by about 0.6% in volume, about 11% in value and 10.5% in price compared to 2023, which is the largest market consuming Vietnam's cement clinker, accounting for 27% of the total volume and 28% of the total export turnover of cement and clinker of the whole country, reaching more than 8 million tons, equivalent to 319.09 million USD, with an average price of 39.9 USD/ton.
Clinker cement exported to Bangladesh - the second largest market - reached 5.49 million tons, worth more than 175.13 million USD, with an average price of 31.9 USD/ton, accounting for 18.5% of the total volume and 15.4% of the total turnover. Next is the Malaysian market, accounting for 5.7% of the total volume and 5% of the total turnover, reaching 1.68 million tons, equivalent to 57.19 million USD, with a price of 34 USD/ton.
Entering 2025, the export situation continued to decline, when in January 2025 it reached nearly 2.18 million tons, earning more than 76.41 million USD, down 32% in volume and 36% in value compared to the same period in 2024. Specifically, cement exports were about 1.43 million tons; clinker exports reached 750,172 tons, both down 4% compared to December 2024. Because January 2025 coincided with the Lunar New Year holiday, causing logistics, transportation, and loading and unloading activities at the port to be disrupted, affecting export output.
Faced with the above developments, the Prime Minister issued Document No. 1297/VPCP-CN assigning the Ministry of Finance to study the reduction of export tax on cement clinker products when the current export tax rate on cement clinker is at 10% according to Decree 101/2021/ND-CP, causing great pressure on businesses in the context of declining domestic consumption, export difficulties due to high costs and fierce competition.
Industry experts believe that from 2022, the amount of exported clinker will decrease significantly, seriously affecting the business of manufacturing enterprises. The main reason is that the export tax increased from 5% to 10% from January 1, 2023, making clinker prices less competitive in the international market compared to other countries such as Thailand, Indonesia, India... when these countries do not tax clinker exports, because this is a deeply processed product.
At the same time, with the export tax increased by 10% and the non-deductibility of input value added tax on exported clinker (10%), Vietnam's clinker price lost its advantage by 20% compared to the price of competitors in the international market. As a result, many cement enterprises cannot export their products, while having invested a lot of capital in production projects. If they cannot repay the loan, along with high interest rates, they will be forced to pay off their debts and face pressure to sell off their debts.
Therefore, reducing export tax can help reduce input costs for enterprises, create incentives to promote exports and support the cement industry to overcome difficult times. This is an important solution to maintain the production capacity of the industry and maintain the stability of the construction materials market. This adjustment of tax policy is expected to help Vietnamese cement enterprises improve their competitiveness in the international market, contributing to promoting economic growth and stabilizing this important industry in the long term.
Businesses reduce costs
With the above developments, enterprises in the industry have implemented many solutions in management and operation to reduce costs, improve productivity, quality, reduce product prices when input material prices decrease as well as take advantage of cheap raw materials from waste to reduce production costs. For example, Vicem Hoang Mai Cement Joint Stock Company recorded net revenue of nearly 506 billion VND, an increase of 8% over the same period last year.
However, due to the sharp increase in cost of goods sold, the after-tax profit in the fourth quarter of 2024 was a loss of VND 15.9 billion, an increase of VND 10.6 billion compared to 2023. Even so, the company still showed many bright spots, in which in terms of input materials, coal prices decreased from VND 75/kcal to VND 507/kcal, causing profits to increase by VND 13.9 billion.
However, with an average electricity price of VND 1,766/KWH, an increase of VND 96/KWH over the same period (EVN increased electricity prices by 4.8% from October 11, 2024), profits decreased by VND 3.2 billion. To save costs, from June 2024, the company started using alternative materials (tree bark, wood chips, common solid waste that can be reused and recycled) to replace part of the coal dust in clinker production, increasing profits by VND 29.3 billion.
It can be seen that, in order to maintain production and stabilize the market, enterprises are forced to seek adaptive solutions, from cost optimization, market diversification to technological innovation to enhance competitiveness; review and cut production costs for raw materials, coal, oil, gas and electricity. Restructure capital sources, reduce costs to ensure cash flow to repay bank loans and costs of raw materials, input fuels, labor and other costs in production.
These are also the solutions that other enterprises in the industry are applying to maintain and stabilize production and business, ensuring income for workers. For example, Yen Binh Cement, in the fourth quarter of 2024, promoted production, reduced costs, along with that, the prices of main input materials such as coal, gypsum, and transportation costs all decreased and major repair costs also decreased compared to the same period, so the cost of production decreased, contributing to increased profits. Or Sai Son Cement, due to the stable operation of the factory, interest expenses decreased because the enterprise had paid medium-term capital, at the same time saving production costs, reducing prices to sell all products, increasing market coverage, making Sai Son Cement's profits increase.
Master Pham Ngoc Trung acknowledged that the imbalance in supply and demand of cement comes from many reasons, which depend on input factors such as mineral resources, technology, energy and capital. The balance still has many shortcomings, leading to a surplus as well as not fully exploiting the production capacity of enterprises in the industry. Therefore, there is a need for solutions to increase cement consumption in the domestic market, such as researching the maximum use of cement soil reinforcement in road construction at bridgeheads, culverts, locations with large embankment heights, weak soil, etc. Prioritizing investment in cement concrete roads in the development of rural mountainous roads, areas with special terrain such as large vertical slopes or places that are often flooded.
In addition, it is necessary to continue to promote public investment focusing on developing transport infrastructure, irrigation, investing in developing urban and rural infrastructure, marine works, enterprises related to construction materials and construction will be the direct beneficiaries. Along with the policy of investing in building 1 million social housing units, continuing to promote and other housing construction programs and projects will help increase domestic cement consumption.
According to the Vietnam Cement Association, trade barriers and protectionist policies from some import markets remain challenges for Vietnamese enterprises. Exports are moving towards some new potential markets, which is a good sign that reduces competition from large manufacturers in traditional markets.
Source: https://kinhtedothi.vn/can-quyet-sach-moi-cho-nganh-xi-mang.html
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