Cement makers decry coal shortfall

A worker operates cement packing line in Viet Nam Cement Industry Corporation. Vinacomin says the group is not responsible for cement producers'insufficient coal supply. — VNA/VNS Photo Tuan Anh

HA NOI — Officials from Viet Nam National Coal and Mineral Group (Vinacomin) said the group was not responsible for cement producer's insufficient coal supplies.

Viet Nam Cement Corporation (Vicem) said last week that they did not have enough coal to continue producing cement and several plants may have to stop operating because of coal shortage.

Officials from Vinacomin said the Cement Material and Transport Joint Stock Company (Comatce), Vicem's affiliate, that purchases coal for the cement industry, had signed contracts with the group to provide 1.5 million tonnes to the cement group this year.

Under the contract, Vinacomin is scheduled to deliver 350,000 tonnes of coal to the cement industry during the first quarter, 400,000 tonnes during the second, 350,000 tonnes in the third and 400,000 tonnes in the forth.

During the first nine months of the year, the group delivered 1.18 million tonnes of coal to the cement sector, a slight increase compared with the 1.1 million tonnes they were supposed to provide in accordance with the contract.

Representatives from Vinacomin have relied on these facts to argue that they are not responsible for the cement sector's lack of coal. The group will continue to deliver the coal on schedule until the end of this year.

Le Minh Chuan, Vinacomin's deputy general director, said coal demand for the cement sector rose 20 per cent this year, from 1.25 million tonnes last year to 1.5 million tonnes.

On September 14, the cement industry asked the group to provide 170,000 more tonnes of coal to the sector during the month, a 50 per cent increase month-on-month, the representative said.

Vinacomin agreed to deliver 112,000 tonnes of coal this month and 100,000 tonnes during the next two months.

The group will provide 5.8-5.9 million tonnes of coal, which will allow Vicem to produce 50 million tonnes of cement this year.

Vinacomin said Vicem should utilise new technical and technological solutions and use coal reasonably to deal with its shortage.

The cement factories should sign contracts to purchase coal before building their factories because if they do not have coal contracts then they would create problems for themselves and coal producers, said a representative from Vinacomin. — VNS

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Ministry mulls curbs on cement production

Photo: Reuters

The Ministry of Construction plans to propose to the Prime Minister a suspension in the licensing of new cement production projects to limit the sector's overheating development, and unnecessary waste of energy.

Vu Quang Diem, Deputy Director of the Ministry's Building Materials Department, said in terms of the building materials production sector, the cement sector was the most energy-inefficient.

For each million tons of cement produced, the power sector had to supply 90-95 million kWh, Diem said.

The rapid growth of the building materials production industry, including the cement sector, had put pressure on infrastructure, especially the power sector, Diem said.

The most worrying problem was the number of new cement projects, many of which were inefficient and used out-of-date technology, would continue to rapidly increase if management was not tightened, he said.

The boom would lead to a waste of energy and harm the environment, he added.

The Department was developing a plan for cement sector development until 2015, with an orientation to 2025 to submit to the Government.

The ministry proposed a suspension of investment in 13 projects which had been approved in Prime Minister's Decision 108/2005/QD-TTg issued in 2005, but had not been carried out or would be harmful to the environment if continued.

As an alternative, the authority petitioned the Prime Minister to agree to the construction of nine projects which had more favorable local conditions and would have a significantly beneficial affect on the development of the region where they were located.

The ministry also asked for stricter punishment on projects that failed to meet schedules.

The head of the ministry's Department of Science, Technology and Environment, Nguyen Trung Hoa, said that it was difficult to compel enterprises to spend hundreds of millions of US dollars to renew technology.

Therefore it was necessary to offer preferential lending policies, so that companies would find it easier to access loans to upgrade energy-saving technology, he said, adding that a raft of complicated administrative procedures was one of obstacles that made companies hesitate when considering upgrading their technology.

The Government should strictly implement the regulation that forced cement factories to re-use exhaust fume heat discharged to generate power, as the temperature of the exhaust fumes could reach up to 370 degrees Celsius, Hoa said.

If factories could take advantage of this energy source, they could save 30 per cent of the electricity they consumed, he added.

Although the policy had been outlined in Decision 108, many enterprises had not been interested in it, Hoa said.

Diem suggested that the Government only license new projects which included the construction of a power generator using exhaust fumes.

According to the ministry, by the end of 2009, total design capacity of all cement factories nationwide was 57.4 million tons per year, which could fully satisfy domestic consumption demand. However, this year, total capacity had added an additional 11.7 million tons to output.

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Ministry mulls curbs on cement production

The Dien Bien Cement Plant began operations in the northern province of Dien Bien this month. — VNA/VNS Photo Manh Thanh

HA NOI — The Ministry of Construction plans to propose to the Prime Minister a suspension in the licensing of new cement production projects to limit the sector's overheated development, and unnecessary waste of energy.

Vu Quang Diem, Deputy Director of the Ministry's Building Materials Department, said in terms of the building materials production sector, the cement sector was the most energy-inefficient.

For each million tonnes of cement produced, the power sector had to supply 90-95 million kWh, Diem said.

The rapid growth of the building materials production industry, including the cement sector, had put pressure on infrastructure, especially the power sector, Diem said.

The most worrying problem was the number of new cement projects, many of which were inefficient and used out-of-date technology, would continue to rapidly increase if management was not tightened, he said.

The boom would lead to a waste of energy and harm the environment, he added.

The Department was developing a plan for cement sector development until 2015, with an orientation to 2025 to submit to the Government.

The ministry proposed a suspension of investment in 13 projects which had been approved in Prime Minister's Decision 108/2005/QD-TTg issued in 2005, but had not been carried out or would be harmful to the environment if continued.

As an alternative, the authority petitioned the Prime Minister to agree to the construction of nine projects which had more favourable local conditions and would have a significantly beneficial affect on the development of the region where they were located.

The ministry also asked for stricter punishment on projects that failed to meet schedules.

The head of the ministry's Department of Science, Technology and Environment, Nguyen Trung Hoa, said that it was difficult to compel enterprises to spend hundreds of millions of US dollars to renew technology.

Therefore it was necessary to offer preferential lending policies, so that companies would find it easier to access loans to upgrade energy-saving technology, he said, adding that a raft of complicated administrative procedures was one of obstacles that made companies hesitate when considering upgrading their technology.

The Government should strictly implement the regulation that forced cement factories to re-use exhaust fume heat discharged to generate power, as the temperature of the exhaust fumes could reach up to 370 degrees Celsius, Hoa said.

If factories could take advantage of this energy source, they could save 30 per cent of the electricity they consumed, he added.

Although the policy had been outlined in Decision 108, many enterprises had not been interested in it, Hoa said.

Diem suggested that the Government only license new projects which included the construction of a power generator using exhaust fumes.

According to the ministry, by the end of 2009, total design capacity of all cement factories nationwide was 57.4 million tonnes per year, which could fully satisfy domestic consumption demand. However, this year, total capacity had added an additional 11.7 million tonnes to output. — VNS

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Cement surplus

Vietnam is up to its ears in cement.

Amid a startling surplus of the product, government agencies are working quickly to figure out ways to offload cement at home and abroad.

Prospects are not looking good.

Vietnam’s 20-year industry development plan called for 53 cement factories to come into operation between 2005 and 2010.

Vietnam met its official goals, and then some. Some plants were built or developed outside the scope of the plan.

According to the Ministry of Construction, Vietnam now houses 105 cement plants with a combined capacity of 61 million tons.

This year, the plants are scheduled to produce 55 million tons; output is expected to exceed demand by some five million tons, Chairman of the Vietnam Cement Association Nguyen Van Thien said.

One hard flood

In 2009, Vietnam was featured in the list of the top ten cement producers in the world. The list includes China with an annual output of 1.37 billion tons, India 160 million tons, the US 113 million tons, and Japan 68 million tons.

The cement surplus may represent more than 10 percent of the total output in the next several years, said Le Van Toi, head of the Construction Material Department under the Ministry of Construction.

Thien said that some local governments continue to license new cement projects even though this surplus was forewarned three to four years ago.

The chairman attributes the recent rush on cement plant development to an abundance of small-time investors who purchased low-quality start-up equipment. Thien said these investors were after short-term profits.

He also cited poor local management as a contributing factor to the predicament. “While some cement plant projects were delayed, localities worry about a coming shortage, so they licensed others. When all the projects came into operation at the same time, we were left with a surplus.”

Exporters dilemma

The Construction Ministry has recently asked three cement producers – Nghi Son in Thanh Hoa Province, Chinfon in Hai Phong City, and Phuc Son in Hai Duong Province — to export 100,000-150,000 tons in the second half of this year.

The firms will have to unload 50 percent of their output in 2011, and 100 percent in 2012.

Construction Deputy Minister Nguyen Tran Nam said the three joint ventures have committed to export 30-40 percent of their annual output. However, their primary market remains at home.

“Exportation is a solution,” Thien said. “But, it is difficult to implement, and it is also not a decisive solution.”

Exporting cement can be a losing deal and one not easily made.

Vietnam planned to export some one million tons in 2010. However, the Vietnam Cement Corporation has only managed to ship around 500,000 tons of the products to Laos, and less than 12,000 tons to Cambodia since the beginning of this year.

Thien said Vietnam lacks the necessary maritime infrastructure (e.g. deep seaports and big ships) to move the cement.

Meanwhile, Vietnamese firms are having a tough time trying to break into Asian cement markets because they are surrounded by big exporters such as China and Thailand. Thus, Vietnam can only hope to tap distant markets, like Africa and Brazil. However, cement’s going rate, $40-45 per ton, doesn’t begin to cover shipping costs, let alone furnish a profit.

Thien added that carving into Vietnam’s limestone mountains to furnish materials for cement production will degrade the country’s natural landscape.

A way out of the woods

The Construction Ministry has begun a review of the cement industry’s development plan.

The ministry has also asked the government to spur domestic cement consumption. “If the usage of cement in road construction is increased, the situation will quickly change,” Thien said.

He also suggested that investment in deeper seaports to facilitate shipping the materials from the north to the south should be considered.

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