Vicem’s woe prompts cementing

Vicem reported that its customers bought 2.9 percent less cement in 2012 from the previous year while a big decline in exports resulted in disappointing revenues and profits.

Vicem general director Nguyen Ngoc Anh said 2012 was a tough year for the cement sector as the group fell short on most of its targets for the year, dragged down by its exports. Vicem members exported 801,000 tonnes, only 38.3 per cent of its yearly projection.

“Poor exports came as Vicem faced the hustle-bustle in the marketplace and could not ensure cash flows for its members. Besides, our members underestimated rising expenses, leading to low export efficiency,” Anh said.

In terms of other targets, Vicem respectively achieved  95 per cent target in clinker production, 82 per cent in cement production, 85 per cent of targeted revenue, 88 per cent of its set profit and around 87 per cent in budget contribution.

Each of Vicem’s eight member units failed to meet revenue and profit targets. Five of the eight experienced a decline in consumer consumption with Vicem Ha Tien, Bim Son and Hai Van as the exceptions.  

Among the others, Vicem Hoang Thach, a top cement brand in the northern market, earned the modest profit of VND250 billion ($12 million) compared to the target of VND427 billion ($20.5 million) and the revenue of VND4 trillion ($192 million) against the set VND5 trillion ($240 million).

In 2013, Vicem Hoang Thach  said it would aim to bolster cement consumption and cut down clinker production volume and striving for higher revenue. The company is also pursuing wide-ranging measures to curtail fuel and material expenses and boost labour efficiency.

Vicem Hoang Mai, meanwhile, posted the VND90.9 billion ($4.3 million) profit tantamount to 55 per cent of their projection. Currently, Vicem Hoang Mai is committed to slashing production costs.
“Huge production against meager consumption will detrimentally affect cash flows and loan repayment like Vicem Hoang Mai,” said the company’s director Nguyen Truong Giang.

In 2013, Vicem planned to reach over VND30 trillion ($144 million) revenue and at least VND500 billion ($24 million) profit against VND27.637 trillion ($132 million) revenue and VND661 billion ($31 million) pretax profit in 2012.

Vietnam’s cement consumption this year was forecast to hover in the range of 45.6-47 million tonnes, slightly up compared to 2012’s versus the estimated supply of 73 million tonnes.