Export of cement: the success imprint of The Vissai Group

In the context of supply over demand, the cement industry must actively search the market to minimize the amount of excess cement.

After a number of contracts for export of cement performed with the business partners from Laos, Cambodia and recently Bangladesh, Africa, the study of the cement market in Myanmar Vietnam Cement Industry Corporation (Vicem) is seen as a positive move in the context of the cement oversupply in the domestic market.

As reported by Vicem, demand for imported cement to serve domestic consumption in Myanmar is very huge because the production capacity of the plants in this country only meets 50 % of the needs. For many years, Myanmar has imported cement from Thailand, Malaysia and China.

Oversupply of cement in the domestic market.

Not only that, the price of cement in Myanmar is also quite attractive compared to the export price in the markets of Bangladesh, Laos, Cambodia. Ministry of Construction said the CIF import price of cement at the Yagoon port (Myanmar) was from 85 to 89 USD / ton, the actual sales price was about 100-110 USD / ton.

Domestic cement market in 2011 and the following year will enter in a period of intense competition due to oversupply. Therefore, from 2009 and especially, 2010, the Ministry of Construction has consecutively proposed the enterprises to actively seek the export markets.

In the first 6 months of 2011, with the promotion of customer-searching, although the exporting results that Vicem has achieved are not high, it already has had a far progressive step compared to 2010 with 610,000 tons exported to markets of Singapore, Philippines, Bangladesh, Hong Kong, Laos.

Mr. Nguyen Ngoc Anh, General Director of Vicem, said that Vicem failed to gain the target of exporting 1 million tons of cement in 2010. With the results of the first 6 months this year, Vicem is expected to export more 600,000 tons in the last 6 months and totally export 1.1-1.2 million tons in 2011.

In 2010, The Vissai Ninh Binh Group has created an impressive imprint in the cement industry when signing a contracts for exporting 1.2 million tons of clinker, valued $ 40 million to Bangladesh market. Specifically, from 9/2010 to 8/2011, The Vissai has exported 100,000 tons of product each month to partner Peakward Enterprises Company (Hong Kong). This export contract is nearly completed, The Vissai is negotiating with Peakward Enterprises to continue bringing its products to this market.

Mr. Hoang Manh Truong, Chairman of The Vissai Ninh Binh, said that Peakward Enterprises was not only the import-exporter of construction materials, but also a strong transportation enterprise. Therefore, the domestic enterprises were able to reduce a part of pressure in chartering vessels when exporting goods. Thanks to the regular trading relation with Peakward Enterprises, The Vissai has more opportunities to export products to new markets such as Japan, Singapore…

Although The Vissai does not set forth the target of production for export, but in the context of oversupply, the cement industry must actively search the market to minimize the amount of excess cement. Although the cement export results of the previous 6 months has increased significantly compared to 2010, according to the latest report of Vicem, the current inventory of the enterprise is nearly 1.4 million tons, including both cement and clinker.

According to the Investment Newspaper