Hanoi (VNS/VNA) - The Vietnam National CementAssociation (VNCA) has just submitted a proposal to the Prime Minister aimed ataddressing financial and production bottlenecks faced by cement manufacturerswho are at risk of bankruptcy and potential acquisition by foreign companies.

According to the VNCA's report, cement consumption hascontinuously declined since 2022, posing numerous challenges for enterprises inthe industry.

Vietnam has 61 cement manufacturing plants with total capacity of117 million tonnes per year but the consumption in 2023 only reached 87.8million tonnes, including 56.6 million tonnes consumed in the local market and31.2 million tonnes exported. This figure represented a 16% drop year-on-year.

Vietnam ranks third in the world in terms of cement output, behindChina and India. The quality and production technology are also among the topproducers in ASEAN, with products catering to various construction demands rangingfrom marine and island projects, oil and gas wells, to construction ofindustrial furnaces at high temperatures.

However, the industry is currently grappling with many challengesthat threaten to push producers into bankruptcy and potential acquisition. Thechallenges include reduced domestic consumption due to sluggish implementationof public investment projects and rising cost of fuel and energy, coupled withenvironmental concerns which have led to increased expenses in cementproduction. Additionally, higher clinker export taxes have hindered theindustry’s potential for expanding exports to offset the decline in domesticconsumption.

In 2023, many cement plants were forced to halt production for upto half a year, while some remained idle for the entire year, VNCA reported.

To tackle difficulties for the industry, the association hasproposed the Prime Minister and relevant ministries take steps to boostdomestic cement usage through implementing causeway solutions in highwayprojects, especially in areas with weak soil and those prone to flooding, suchas the Central Highlands and the Mekong Delta.

VNCA also suggests the Government consider reducing or eliminatingexport taxes on clinker. If not removed, the export tax on clinker shouldremain at 5% for the next two years. Furthermore, the association recommendsthe Prime Minister instruct banks to restructure debts and lower interest ratesfor cement businesses, alongside discouraging investors from investing incement projects in Vietnam./.