Vietnam Cement Market Report 2022: Ready for modest recovery ahead

FiinResearch is pleased to introduce Vietnam Cement Market Report 2022, the first and most comprehensive issue on the Vietnam cement industry. This report presents a broad range of topics, both sector-specific and crosscutting market issues.

What’s New? Clinker and cement demand weakened in both domestic and export markets during the first five months of 2022, resulted from the low public investment disbursement for infrastructure projects and stagnant construction activities as well as diminishing demand from Chinese buyers. Meanwhile, given the rising increasing production costs, especially coal prices, cement manufacturers continued to increase MSRP in all regions to assure their bottom line in 2022.

This 2022 issue provides the latest information on the current supply-demand situation in Vietnam cement industry, covering industry data & operational information up to the first five months of 2022. This report also provides the in-depth analysis of key growth drivers, market outlook for 2022 and supply-demand forecast until 2030. Especially, the analysis of retail bagged cement prices for PCB30 and PCB40 by region, key brands and production cost are also included in this report.

Below are the most critical findings in our eighth issue:

1. Clinker and cement demand weakened in both domestic and export markets during the first five months of 2022. In domestic market, the growth momentum remained weak in 5M2022 with lessoned demand in the North and the South of Vietnam due to low public investment disbursement for infrastructure projects, limited financing sources, and estate developers’ reluctance to launch new projects due to negative market outlook and licensing issues (especially in largest cities of Hanoi and HCMC. Meanwhile, there was a quick reduction in the amount of clinker & cement exported from Vietnam to China in the first five months of 2022, mainly driven by a fall by 21.6% in clinker export volume.
2. Leading cement manufacturers are still active in developing new facilities despite the continuous supply surplus situation in Vietnam. In particular, while there is a new cement facility in 2021 with an increase by 2.3 million tons in cement production capacity, many expansion projects in the next five years will boost the cement production capacity of Vietnam to reach 158.6 million tons in 2026.
3. Local private players continued to dominate the Vietnam cement market, accounting for over 45% of market share by domestic cement sales volume in 2021, with big names including Long Son, Xuan Thanh, Cong Thanh, Vissai and Cam Pha. VICEM and leading local private players achieved a relatively high avg. utilization rate of 94% when foreign-owned players’ figure slumped to 64% in 2021.
4. Cement manufacturers’ profit margin declined in 2021 & Q1.2022 due to rising production cost, especially in coal prices. To pass on the rising production cost and assure the bottom line, cement manufacturers in Vietnam have increased their MSRP by 5-10% (YTD) during the first five months. Given rising MSRP, cement manufacturers are expected to achieve a stable profitability level with NPM of 4.0% in 2022.
5. Domestic cement demand is forecasted to have a moderate outlook in 2021, while the export market is projected to have a negative outlook due to the fall in clinker export volume to China. In addition, the Vietnam government plans to raise its clinker export tariff to 10% from 5% in 2023, resulting in negative outlook for clinker export in the time to come.

You can explore more detail on our full report HERE

Should you have any questions, please contact our Client Advisor at +84 (24) 3562 6962/+84 (28) 3933 3586 or research.support@fiingroup.vn