Prime Minister Pham Minh Chinh chaired the Conference. (Photo: Tran Hai)

Also attending were Deputy Prime Ministers Le Minh Khai and Tran Hong Ha; representatives of ministries, departments, branches, central agencies, corporations, general companies, enterprises, and business associations in the cement and steel sector. The conference was broadcast live to the headquarters of the People's Committees of 32 provinces and cities across the country related to the construction materials manufacturing industry.

In his opening remarks, Prime Minister Pham Minh Chinh emphasized that cement, steel, and construction materials are essential materials for building technical infrastructure, civil and industrial works, airports, ports, defense and security works; urban and rural infrastructure systems... Sustainable development of the cement, steel, and construction materials industry in our country is one of the extremely important issues, always of interest to the Government and the Prime Minister, with many policies and strategies to promote development to meet domestic consumption and export needs.

With the policies of the Government, the Prime Minister, the participation of all levels, sectors, and localities; the participation in investment in production and business of enterprises, the cement, steel and construction materials industry has had remarkable development in the past 10 years, specifically: cement has been invested with a total capacity of 122 million tons/year, ranking among the top in the world. The total estimated investment at current value is up to 500 trillion VND (equivalent to 20 billion USD). Ceramic tiles have been invested with a total capacity of 831 million m2/year. The total estimated investment at current value is about 100 trillion VND (equivalent to 4 billion USD). Sanitary ware has been invested with a total capacity of 26 million products/year. The total estimated investment at current value is about 25 trillion VND (equivalent to 1 billion USD).

Glass has been invested with a total capacity of 5,900 tons of glass/day (equivalent to 331 million m2 of glass/year), ranking among the top 5 countries with the largest output in Southeast Asia. The total estimated investment at current value is about 50 trillion VND (equivalent to 2 billion USD). Unburnt construction materials (UCM) have been invested with a total capacity of 12 billion bricks/year (standard bricks). The total estimated investment at current value is about 12.5 trillion VND (equivalent to 500 million USD). The steel industry (2011-2022 period) has a high growth rate (average of 14.25%). Steel output in 2022 will increase 5 times compared to 2011. Especially in the 2016-2022 period, the steel industry will achieve a very high growth rate with an average of 27.11%/year.

However, in recent years, due to the impact of many unfavorable factors at home and abroad, along with the fact that the real estate market has not recovered, the production of cement, steel and construction materials has declined, specifically: cement and clinker: Total production output in 2023 reached only 92.9 million tons; the average operating line of the whole industry only reached 75% of the total design capacity. Total consumption output in 2023 reached 87.8 million tons, equal to 88% compared to 2022. Construction steel: In 2023, construction steel production reached 10.655 million tons (down 12.2% compared to 2022), consumption reached 10.905 million tons (down 11.2% compared to 2022).

The Prime Minister pointed out that the production and consumption of construction materials are currently very difficult; this situation has lasted for a long time, and there has been no breakthrough solution. Therefore, the Prime Minister has directed the organization of this Conference to assess and review the causes. We can see the disruption of the supply chain due to domestic difficulties, thereby reducing production and total demand, such as difficulties in real estate, production, business, and consumption of construction materials, and public investment has not increased strongly.

The Prime Minister raised the issue of reduced aggregate demand, and we have not yet controlled the import issue...; therefore, it is necessary to find the cause, appropriate and breakthrough solutions, which can be a defense solution in accordance with international commitments; that is, to promote production and business, especially the construction of projects that strongly consume domestic construction materials; that is, to propose mechanisms and policies to encourage such as reducing taxes, fees, charges, reducing construction material prices...

The Prime Minister suggested that we need to think and change the way we do things, to have breakthrough solutions with the spirit that no matter how difficult it is, we must do it. Accordingly, it may be necessary to have State intervention in difficult circumstances, this is done in accordance with the spirit of a socialist-oriented market economy; it is necessary to mobilize the entire political system; it is necessary to change methods and ways of doing things; shift to developing social housing and rural development. To do so, it must be a policy that we set out. The problem is that there must be open mechanisms and policies, simplifying administrative procedures, and a flexible approach.

The Prime Minister said that currently there are ministries, branches, agencies, and localities that handle issues in a very rigid manner, complicating the problem... That requires appropriate mechanisms and policies; it is necessary to increase domestic aggregate demand, because currently, there is a surplus of cement and steel, while strategic projects, infrastructure, and housing are in great need of construction materials.

The Prime Minister asked the delegates to express their opinions briefly, directly to the point, "correctly and accurately", find lessons learned to propose solutions for the coming time in organizing implementation, proposing mechanisms and policies to encourage and stimulate the consumption of construction materials, thereby creating domestic jobs, increasing total demand...

* According to the Ministry of Construction, in the past 10 years, the total production capacity of key construction materials in Vietnam has grown to about 120 million tons of cement, 830 million m² of tiles, 26 million sanitary ceramic products, 330 million m² of construction glass, 20 billion fired clay bricks, and 12 billion unfired bricks (standard). Of which, the output of cement and tiles is among the top in the world. The quality of Vietnam's construction materials is guaranteed to meet international standards. The level of technology, production organization, business, and environment of Vietnam's construction materials industry is among the top in ASEAN countries. The total annual revenue value of the construction materials industry excluding construction steel is estimated at about 600,000 billion VND (equivalent to more than 24 billion USD), accounting for nearly 6% of the national GDP.

Currently, the demand for construction materials in our country is still very large because the national housing area is still low, the urbanization rate is only about 43%, the infrastructure system is not yet fully developed, while the national urbanization rate target by 2050 is 70-75% and the annual construction floor area needs to increase by at least more than 20 million m2; at the same time, it also serves the need for construction of national sea and island works of special importance, facilities, development of the sea and island economy, associated with preserving and protecting the sacred territorial sovereignty of the Fatherland.

Compared to the world, our country's current cement consumption per capita is still low, only reaching about 600 kg/person/year, while China is more than 1,500 kg/person/year, and Korea is more than 1,000 kg/person/year.

The conference was held in person and online to 32 provinces and cities across the country related to the field of construction materials production. (Photo: TRAN HAI)

Regarding the operation of construction material enterprises, the Ministry of Construction said that for the cement industry, currently, the total number of cement production lines invested nationwide is 92, with a total capacity of 122.34 million tons/year (of which, there are 4 lines with a total capacity of 11.4 million tons of cement/year that have been completed but not put into operation, due to unsold products).

The production lines invested since 2011 have all used modern, advanced technology in the world that meets European standards. In particular, there are the most modern cement production lines in the world such as lines 2 and 3 of Xuan Thanh Cement Factory, Ha Nam Province.

The number of investments in cement factories over time shows that: by 2010, the whole country had invested in 59 production lines with a total designed capacity of 62.56 million tons/year, of which 29 production lines had small capacity from 0.25-0.65 million tons/year, and 13 production lines had capacity from 0.75-0.91 million tons/year.

From 2011 to 2020, the whole country invested in 26 production lines, with a total capacity of 41.48 million tons/year, bringing the total number of production lines nationwide to 85 by 2020, with a total designed capacity of 104.04 million tons/year.

From 2021 to present, the whole country has invested in 7 production lines, with a total designed capacity of 18.3 million tons/year. The average investment capital in this period is about 2,500,000-3,700,000 VND/ton depending on the synchronized equipment of each country.

The total investment in building cement factories is very large, with a total designed capacity of 122.34 million tons of cement/year, the total financial investment in building cement factories is estimated at current value up to 500,000 billion VND (equivalent to 20 billion USD). Of which, it is estimated that financial sources from domestic banks and state capital account for about 75% of this total investment.

Regarding clinker and cement production: in the past 10 years (from 2014 to 2023), clinker and cement production output has generally increased. In particular, clinker and cement production in 2021 peaked (110.4 million tons).

Since 2023, clinker and cement production has declined dramatically. Total production output for the whole year of 2023 reached only 92.9 million tons, with the average operating lines of the entire industry only reaching 75% of the total design capacity.

In 2023, 42 production lines will have to stop production for about 1 to 6 months, of which some lines will have to stop for the whole year (equivalent to about 30% of the total design capacity of the whole country).

In 2024, it is expected that by the end of June 2024, the total national clinker and cement production output will reach about 44 million tons of cement, equivalent to the same period in 2023, and factories are also expected to only reach about 70-75% of total design capacity (before 2022, factories often operated at over 85%, and in some years even over 95% of design capacity). Accumulated inventory is about 5 million tons.

Cement factories in our country have produced many types of cement products for civil and industrial construction, and have produced high-quality cement, fast-setting, heat-resistant, fire-resistant, durable in marine environments, well cement for oil and gas exploitation, etc.

Regarding business: in the past 10 years (from 2014 to 2023), the total annual consumption of clinker and cement has generally increased, with the highest in 2022 when the entire industry consumed 108.4 million tons. From 2023 to now, clinker and cement consumption has decreased seriously. The total consumption in 2023 reached 87.8 million tons, equal to 88% compared to 2022. It is expected that by the end of June 2024, the total consumption of clinker and cement will reach about 44 million tons, equivalent to the same period in 2023.

Domestic consumption, mainly cement, has generally increased over the past 10 years. However, the consumption growth rate is very low, only reaching an average of about 2.3%/year, while the national GDP has increased by an average of about 5-7%/year.

In 2023, domestic cement consumption will be very low, reaching only 56.6 million tons (equal to 83.5% of 2022), the largest decline ever in the cement industry. Domestic cement consumption market share is generally stable, with the North accounting for about 34-35%, the South about 34-35%, the Central and Central Highlands about 30-31%. Domestic cement prices from 2022 to present have not increased due to strong competition between cement factories, and even tend to decrease, averaging about 1,400,000-1,600,000 VND/ton in the delta and midland regions depending on the cement brands; about 1,650,000-2,000,000 VND/ton in remote areas, the Central Highlands, etc.

Export consumption includes two products: clinker and cement. Over the past 10 years, the export output of clinker and cement has generally increased. However, from 2022, the export volume of clinker has decreased significantly, the total export volume of clinker in 2022 reached only 15.2 million tons (equal to 52.9% of 2021) and continued to decrease to 10.9 million tons in 2023 (equal to 71.7% of 2022).

It is estimated that by the end of the first 6 months of 2024, the amount of exported clinker will only reach about 5.4 million tons. This decline in clinker exports is very difficult for manufacturing enterprises. In 2019-2022, the average export value of clinker and cement was about 1-1.3 billion USD/year. From 2023 to now, the export value of clinker and cement has decreased due to a sharp decrease in export prices...

According to nhandan.vn