In 2015, the Vietnam cement industry continued to oversupply at a 72.11% using rate out of total production, excluding export value, and the situation is likely to remain unchanged in the near future. However, the cement demand might change significantly due to the rising of infrastructure and real estate projects, but this is not guaranteed.

The quality of cement production depends on two factors: raw material and technology & equipment. Limestone used as raw material to manufacture portland cement have to satisfy the requirements of quality content of MgO and CaO. In terms of technology, manufacturing enterprises use rotary kiln dry method with two major equipment lines derived from the G7 countries and China. G7 machinery will provide higher productivity, however, materials play a more important role in deciding the quality of cement so small firms can consider Chinese equipment, while those from G7 countries are still the best choice for large enterprises.

Logistic is still a weakness of Vietnam cement companies. The linker supply in the North is redundant, while the demand in the South is increasing, which results to the transportation of linker from the North to the South. Difficulties in shipping process cause the transporting cost higher, making the cement price in the South more expensive than in the Middle and in the North. Besides, cement price in Vietnam is predicted to rise due to the climbing of material and energy cost, which may lead to the lower efficiency of the industry.

In the near future, direct sale to projects and industrial customers may become the main trend of the industry. There are 3 groups of cement supply in Vietnam: companies under VICEM accounting for 27% of total capacity in Vietnam, foreign enterprises and private companies with large scale. The internal competition is very stiff, with the development and dominance of large brands, smaller firms are facing bankruptcy or being merged to as they are not capable to compete with the big.

The “Vietnam Cement Comprehensive Report Q3/2016” elaborated by Vietnam Industry Research and Consultant Jsc. (VIRAC) draws an all-around picture about the cement sector in Vietnam, brings to readers a clear insight about the historical and current developing trends of the industry by categories: materials, production – consumption, export – import, price movement and distribution system. Specifically, the report analyzes the economic situation in general and the cement industry in particular through the latest data updated to Q2/2016, beside the forecasts about the output, scale and expanding trend of the sector in the future. It also give detail information about large businesses in the industry such as Ha Tien 1 Cement JSC., Vicem Bim Son Cement JSC., Vicem But Son Cement JSC. through analyzing their financial statements, technology status and market shares in order to position and identify the level of competitiveness among firms in the market.

Executive Summary 5
1. Business Environment 7
1.1 Macroeconomic Situation 7

Figure 1. GDP Growth, 2010 – 6months/2016

Figure 2. CPI, 2014 – 6/2016

Figure 3. Foreign exchange reserves

Figure 4. VND/USD Exchange rates

Figure 5. State budget deficit

Figure 6. State investment at compared prices by kinds of economic activity

Figure 7. State investment at current prices by kinds of economic activity

Figure 8. FDI in Vietnam, 2010 – 6 months/2016

Figure 9. FDI structure by sectors, 6 months/2016

 
1.2 Legal Barriers 12

Table 1. Demand forecasts for 2011 – 2030

Table 2. Concentration level of some parameters

Table 3. Environmental Protection Tax rate applied since Jan 1st, 2012

Table 4. Natural Resources Tax rate applied since Feb 1st, 2014

Table 5. Import Export Tariff applied since 2014

 
1.3 Free Trade Agreement 19
Figure 10. FDI 2006 – 6 months/2016e  
2. Industry Overview 22
2.1 Global Cement Industry Situation 22
2.1.1 Consumption 23

Figure 11. Cement consumption in the world

Figure 12. Cement consumption by country, 2014

 
2.1.2 Production 25

Figure 13. Global cement production

Figure 14. Production by regions, 2014

Figure 15. Largest cement producers in the world by country, 2014

 
2.1.3 Export 26

Figure 16. Global cement export, 2010 – 2015e

Figure 17. Top biggest cement exporters worldwide 2015e

 
2.1.4 Import 27

Figure 18. Global cement import, 2010 – 2015e

Figure 19. Top 10 highest cement and clinker importers by nation, 2014

 
2.1.5 Price Movement 28
Figure 20. Movement of average cement price in the world, 2000 – 2015e  
2.1.6 Production and Consumption Situation in typical countries 29
2.1.7 Production and Consumption Situation in ASEAN 30
2.1.8 Key Players in the industry 31
2.2 Vietnam Cement Industry Situation 32
2.2.1 History of Vietnam Cement Industry 33
2.2.2 Definition and Classification 34
2.2.3 Fundamental Manufacturing Process 35
2.2.4 Scale and Market Share 37

Figure 21. Allocation of manufacturing enterprises by region, 2014

Figure 22. Allocation of cement production lines by region, 2015

Figure 23. Market shares by key players, 6 months/2016

 
2.2.5 Raw materials 39

Figure 24. Cost of Goods Sold (based on clinker cost structure of leading firms)

Figure 25. Supply, demand and power lost, 2010 – 2015

Figure 26. Structure of electricity consumption by section

Figure 27. Structure of electricity consumption by industry

Figure 28. Average electricity price, 1/2007 – 6/2016

Table 6. Average electricity price by country

Figure 29. Coal reserves by region

Figure 30. Forecast of Coal demand and supply, 2015 – 2030

 
2.2.6 Production Technology 47

Figure 31. Cost Per Unit of building cement plant

Figure 32. Cost Per Unit of typical projects

Table 7. Capacity of machinery from G7 and China

Table 8. Cost per unit of machinery from G7 and China

Table 9. Comparison of level of (Fr.Cao) in clinker heated in G7 and China Kiln

Table 10. Maintenance Costs of equipment from G7 and China

 
2.2.7 Supply-Demand 57

Figure 33. Domestic production – consumption, 2010 – 6 months/2016e

Figure 34. Cement supply – demand, 2010 – 2015

Figure 35. Cement Supply and Demand in the Central, 2010 – 6 months/2016e

Figure 36. Cement Supply and Demand in the North, 2010 – 6 months/2016e

Figure 37. Cement Supply and Demand in the South, 2010 – 6 months/2016e

 
2.2.8 Clinker and Cement Manufacturing 59

Figure 38. Cement production volume, 2010 – 6 months/2016e

Table 11. Large enterprises in the North in 2015

Table 12. Large enterprises in the Central in 2015

Table 13. Large enterprises in the South in 2015

 
2.2.9 Consumption 61

Figure 39. Structure of consumption by region, 2010 – 6 months/2016e

Figure 40. Cement consumption by month, 2015 – 6/2016e

Figure 41. Cement consumption growth by region, 2010 – 6 months/2016e

 
2.2.10 Clinker and Cement Export 63

Figure 42. Top 6 biggest cement exporter worldwide 2015e

Figure 43.  Export of cement and clinker, 2010 – 6 months/2016e

Figure 44. Major export market, 6 months/2015 – 6 months/2016

Figure 45. Cement manufacturers for export

Table 14. Major importers

 
2.2.11 Inventories 68
Figure 46. Inventories, 2010 – 6 months/2016e  
2.2.12 Price Movement 69

Figure 47. Cement price, 6/2016

Figure 48. Average cement price, 6/2016

 
2.2.13 Distribution Channel 71
2.2.14 Logistic System 72
Table 15. List of harbors and ports of cement enterprises  
2.3 Industry Risks 74
2.3.1 Major Rinks 75

Table 16. List of delayed and cancelled plants in the Master plan

Figure 49. Structure of implementation progress of constructions, 2010 – 2015

 
2.3.2 SWOT Analysis 80
2.3.3 5-Forces Analysis 82
   
2.4 Industry Planning 84
2.4.1 Cement Industrial Planning 85
2.4.2 Construction and Real Estate Industrial Planning 87
2.5 Prospects and Forecasts 92
2.5.1 Industry Driving Force 93
2.5.2 Driving Forces for Output Industry 94

Figure 50. Forecast on construction and infrastructure

Figure 51. Population growth

 
2.5.3 Global Forecast– Ministry of Industry and Trade 95
2.5.4 Domestic Forecast 96
Figure 52. Forecast of Cement industry, 2016f – 2020f  
3. Enterprise Analysis 100
Table 17. Top typical enterprises, 2015  
3.1 Revenue and Profit analysis 111

Figure 53. Business situation of cement enterprises 2015

Figure 54. Net profit and profit growth of enterprises 2015

 
3.2 Operation Ratios 114

Figure 55. Receivables turnover of enterprises 2014 – 2015

Figure 56. Inventory turnover of enterprises 2014 – 2015

Figure 57. Asset utilization rate of enterprises 2015

 
3.3 Financial Strength 117

Figure 58. Repayment capacity ratios of enterprises 2015

Figure 59. Solvency Ratios of enterprises 2015

 
3.4 Management Effectiveness 120
Figure 60. ROA and ROE ratios of companies in the industry 2014 -2015  
4. Appendix 122

– Ha Tien 1 Cement JSC.

– Vicem Bim Son Cement JSC.

– Vicem But Son Cement JSC.

– Vicem Hoang Mai Cement JSC.

– Vicem Hoang Thach Cement Company Limited

– Nghi Son Cement Corporation

– Chinfon Cement Corporation

– The Vissai Cement Group

– Quang Ninh Construction and Cement JSC.

– Thang Long Cement JSC.