According to the Department of Building Materials (Ministry of Construction), in the first 3 months of the year, consumption of cement products was estimated at 22.31 million tons. Specifically, in March, cement consumption was estimated at about 8.87 million tons, an increase of 1.5% over the same period in 2020. Domestic consumption was about 5.02 million tons, and Vietnam National Cement Corporation (Vicem) generated about 1.83 million tons while export output was estimated at about 3.85 million tons.
In March 2021, cement prices in the domestic market were more stable than in February, while export prices increased slightly. In the first 3 months of the year, the total amount of cement in stock of Vietnam was about 4.6 million tons, equivalent to about 20 to 25 days of production.
Experts in the field of building materials believe that in the context of the Covid-19 epidemic being under good control along with the recovery of the economy in general and real estate projects in particular, production and consumption of cement products are expected to continue to increase in the coming time.
Many experts also said that building materials are heavily dependent on the real estate market because the output of construction materials is mainly for the construction of housing, offices, industrial parks and other technical infrastructure works.
By the end of 2020, there had been 90 clinker and cement production lines with a total capacity of 106.6 million tons. Thus, in 2021, Vietnam’s cement industry is forecast to witness increase in production as well as supply and demand.
In the past 10 years, the output of cement and clinker for export has increased 30 times, contributing 32% to the total consumption of the whole industry and helping Vietnam become largest cement exporter. In 2021, the rebound of the real estate market will create a great demand for building materials. In addition, many public investment projects approved from the end of 2020 will be implemented this year, which will certainly require a huge amount of materials to meet construction work. This is also a driving force for the construction material market in general, and the cement industry in particular in the coming time.
Currently, there are about 100 cement companies in Vietnam (data from the Vietnam Cement Association), most of which are located in the North. The market leader is Vietnam National Cement Corporation (Vicem).
Vicem is leading the market as it accounts for 36% of total domestic consumption. This shows that local factors such as the ability to capture customers' needs, the level of market penetration, and flexible sales policy of domestic enterprises are prevailing over the financial, technological and management potentials of foreign enterprises.
The largest contributor to Vicem is Vicem Ha Tien Cement Joint Stock Company, which accounts for 10.4% of market share. Vicem Ha Tien's 2020 net revenue and profit after tax saw a decrease of 10% and 17%, respectively, compared to 2019. In particular, its net revenue was 7,963 billion VND while its profit after tax was 615 billion VND.
Vicem Ha Tien has larger design capacity and scale compared to its competitors in the South. The design capacity of Vicem Ha Tien is 4 million tons of clinker and 7.1 million tons of cement per year with 2 factories in Binh Phuoc and Kien Giang, and 4 grinding stations in Phu Huu, Cam Ranh and Long An. Vicem Ha Tien has also built a sales network including more than 70 distributors, 10,000 stores spread across the South and the Central Highlands.
Besides Vicem Ha Tien, Vicem also the owner of household names with stable annual output and revenue such as Hoang Thach, But Son, Bim Son, and Hoang Mai. These businesses are mostly located in the North and North Central, helping Vicem to dominate the market in this region.
Entering the market in 2006, FiCO Tay Ninh Cement Joint Stock Company - a member of Building Materials Corporation No. 1 - has become one of the top cement companies in Vietnam, accounting for over 12% of the regional market share. Every year, FiCO Tay Ninh provides to the market nearly 2 million tons of cement, reaching revenue of 2,500-3,000 billion VND, equivalent to that of Bim Son Cement in the North.
The company owns a production line with a capacity of 1.4 million tons / year in Tay Ninh and a similar line has been approved under the Government's planning. The network of more than 55 distributors has covered most of the provinces in the Southeast, the South West, Ho Chi Minh City and part of the border with Cambodia.
The Vissai Cement Group, which was established at the same time with FiCO Tay Ninh, has rapidly developed. From the first factory with a capacity of 1.2 million tons / year, so far, The Vissai Cement Group has increased its total capacity to more than 11 million tons / year through mergers and acquisitions (M&A) as well as investing in new lines.
Source: Vietnam Cement Association and Vietnam Association for Building Materials
Compiled by VietnamCredit