Cement producers feel a weighty burden

>> State cement maker loses $10.7 mln

Cement continues to be one of the local products with mounting stockpiles in the year to September, according to a Ministry of Industry and Trade report, which saw stockpiles at state-owned cement conglomerate Vicem’s member firms reaching 2.34 million tonnes in the first nine months of 2011.

Vicem Hoang Mai Cement witnessed a plunge in its sales volume on the back of stagnant real estate market and unpredictable weather. Its current cement inventory was reportedly worth VND350 billion ($16.9 million).

According to company’s deputy director Hoang Xuan Vinh, Vicem Hoang Mai faced serious capital pressures, particularly arranging loan repayments for a production line.

As of August 31, 2011, the firm’s borrowing costs came to VND627.8 billion ($30.3 million), tantamount to 59.8 per cent of its total assets.

Many popular cement brands like Ha Tien and Fico are in a similar position.

Nghi Son Cement’s deputy director Nguyen Ba Hung said the firm’s sales volume plummeted when a number of property projects incurred delays on the back of extensive cuts in public spending and credit squeezes.

Quang Son Cement had only 50 per cent of its products bought. A company representative said if the situation continues on the company would achieve 70-80 per cent of its full-year plan.

Quang Son Cement reported an annual production of 1.5 million tonnes.

Early in the year the Ministry of Construction forecast the country would need around 54.5-56 million tonnes in 2011, 10 per cent on-year hike. However, industry insiders assumed sales for this year would be even worsen than last year’s sales of 50 million tonnes.

Latest statistics show that around 35 million tonnes of cement were consumed as of September 30, 2011.

Cement-makers hope the sales volume would augment in later months of 2011 as demand often picked up during that period.

In fact, scores of cement firms are retrenching production to reduce stockpiles and focusing on boosting sales.