The cost of Vietnam’s cement export growth

08:34 | 21/11/2018 Trade

(VEN) - Vietnamese cement manufacturers have had to export their products at lower prices than their domestic ones in order to reduce inventories. Vietnam Economic News’ Nguyen Hanh spoke about this with Associate Professor Dr. Dinh Trong Thinh from the Academy of Finance.

the cost of vietnams cement export growth
Cement exports continue to grow

What do you think about cement being exported at a price lower than its domestic price?

It is important to acknowledge that the cement industry has a major negative impact on the environment. However, the industry’s development for the domestic market is necessary.

When supply exceeds demand in the domestic market, it is necessary for businesses to export product even at a price lower than the domestic price to avoid amassing inventories and earn foreign currency revenues. However, in the long run, exporting cement at such a low price is not sustainable given production costs and the price of similar products in other countries.

The low export price is attributed to the lower quality of Vietnamese cement compared to other countries’ products?

That’s partially true. Small to medium-sized enterprises, in particular, apply poor production technology and therefore cause great environmental pollution. In general, the Vietnamese cement industry’s technology remains poor compared with that in other countries in the region and the rest of the world.

More and more cement plants are being built, increasing supply and inventories. How can this be managed?

Cement development planning was discussed a decade ago. Although it has plans for the cement industry, Vietnam still lacks proper overall, detailed plans.

This is why in recent years, while it has been prohibited for import to Vietnam, outdated shaft kiln technology is still found in some localities with limestone mountains. This technology-based production creates waste and affects the living environment.

The first thing to do is to prepare detailed plans for the cement industry. Authorities need to improve their performance to deal with plan infractors in order to ensure the cement industry’s right development.

According to the Ministry of Construction’s Department of Building Materials, cement and clinker exports reached 2.2

million tonnes in September, taking the total to 23.3 million tonnes in the first nine months of this year, far exceeding

that in the same period of 2017.

Nguyen Hanh