Experts in the cement industry have warned of an oversupply in the domestic cement market, yet there are still more cement factories being built.

The supply of cement is forecast to be 10 million tonnes higher than demand this year with 10 new cement factories becoming operational in addition to the 31 existing ones, according to Le Van Chung, chairman of the Vietnam Cement Corporation’s management board.

“According to our calculations, by 2012, enough cement will have been produced to meet the country’s demand for the product until 2020; cement exporting will also be difficult,” Chung said.

“It is clear that there is an unreasonable plan of development for the cement industry,” said Tran Van Huynh, chairman of the Vietnam Building Material Association.

The Ministry of Construction (MoC) has already approved four new projects this year, including two in northern Ha Nam province, one in northern Bac Giang province and one in central Nghe An province, each with a capacity of 910,000 million tonnes.

In defense of the new factories, Deputy Minister of Construction Nguyen Tran Nam said in the past many projects had not been able to be implemented which had lowered cement output. So, the additional four factories would fill the gap in the total output.

Nam also said that the ministry was not too worried about the abundance of cement because the Government’s stimulus package would affect production, consumption and infrastructure development nationwide and then demand for cement would increase. The ministry had planed to work with the Ministry of Transport on building some roads and highways to use up cement, he said.

There is also an imbalance in supply between the northern region and the southern one, with most cement factories being concentrated in the north due to the abundance of materials.

To alleviate this situation, Huynh said if any new cement projects were to be approved they should be in the south.

Starting on January 1, MoC had required cement enterprises in the northern region to develop plans for transporting clinker and cement to the south. MoC has been seeking investment for four cement factories in the south to help alleviate the shortages.

MoC anticipates Vietnam ’s demand for cement will reach 44-45.5 million tonnes this year, 10-11.5% higher than last year. (VNA)