Cement in a rocky place

After a one year putting Can Tho-Hau Giang cement plant in  Hau Giang province on sale, no investor has come onboard.

The project kicked-start construction in September 2010 by developer Can Tho Cement and Mineral (CCM) in Hau Giang province’s Chau Thanh district with VND320 million ($15.2 million) investment.

At the time the cement plant was offered for sale construction was almost completed with a mechanical factory, a clinker store and an associated wharf were in place.

Initially, the cement plan had a designed capacity of 700,000 tonnes per year. However, due to capital paucity and sinking output market developer CCM decided to lower designed capacity to just 200,000 tonnes per year. Total investment cost was then downwardly revised to below VND100 billion ($4.7 million).

The project record was reportedly sent to a US-based group with an asking price of VND80 billion ($3.8 million).
Then, Holdings Business Group - a building materials producer and trader - worked with CCM on acquiring the project. The deal was later dropped.

CCM chairman Thai Minh Thuyet assumed the project struggled to find buyers because of gloomy market forecast with supply surpassing demand.

To make use of its VND70 billion ($3.3 million) investment into project construction, CCM temporarily put several project items into use, producing ready-mixed concrete or some types of tiles and bricks for sale in the market to cover expenses.

“When construction market bounces with a better consumption of cement products investors will resume interested towards cement plants,” said Thuyet.

According to a Ministry of Construction’s Building Materials Department representative besides the Can Tho-Hau Giang, five to six other cement plant projects incur the same fate due to financial woes.

Before closing its doors in late 2011 Thanh Liem Cement project in northern Ha Nam province hoped it could charm foreign investors. However, the project sank into oblivion as no business players had climbed on board.