FiinGroup is pleased to introduce Vietnam Cement Market Report 2023, 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 2022 and Q1.2023, resulted from the low public investment disbursement for infrastructure projects and stagnant construction activities as well as diminishing demand from Chinese buyers. Meanwhile, cement manufacturers started to decrease the MSRP the first three months of 2023.
This 2023 issue provides the latest information on the current supply-demand situation in Vietnam cement industry, covering industry data & operational information up to the first three months of 2023. This report also provides an in-depth analysis of key growth drivers, market outlook for 2023 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 ninth issue:
- Clinker and cement demand weakened in both domestic and export markets in 2022 and Q1.2023. Total clinker and cement sales in Vietnam witnessed a decrease of 11.2% (y-o-y) to 92.0mn tons in 2022, resulted from the shrinkage demand from export markets and weak domestic consumption. In particular, cement domestic cement consumption decreased slightly by 0.8% to 62.2mn tons while total clinker and cement export activities slumped by 27.1% to 29.8mn tons. In Q1.2023, the slowdown continued with a contraction of 11.9% (y-o-y) and 25.9% (y-o-y) for domestic and export markets, respectively.
- Leading private cement manufacturers continued to develop new facilities aggressively, which might face financing difficulty given the gloomy market outlook. In particular, there are four new facilities starting commercial operation in 2022, posting an increase of 9.3mn tons in clinker production capacity and 4.6mn tons in cement production capacity. The average utilization rate of Vietnam cement industry declined from 85% in 2021 to only 66% in 2022, resulted from weakened demand and the commercial launch of 4 facilities in the year.
- Local private players continued to dominate the Vietnam cement market in 2022. Local players accounted for over 43% of market share by domestic cement sales volume in 2022 with big names including Long Son, Vissai, Xuan Thanh, Cong Thanh & Thanh Thang. Meanwhile, leveraging strong brand position, VICEM and selected foreign players such as SCC-VN, Nghi Son and SCG managed to achieve high avg. utilization rate in 2022.
- The profit margin of listed cement manufacturers declined in 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 10-17% (YTD) during 2022. Factoring a decline in import coal price and a 3% increase in electricity tariffs, FiinGroup forecasts that profit margin of Vietnam cement manufacturers shall witness a modest recover in 2023. However, the challenges are still there, considering numerous challenges in the times to come including low utilization rate and the downward trajectory in demand from domestic market and major export destinations.
- Both domestic cement demand and the export market are forecasted to have a negative outlook in 2023. This could be explained by a slight in cement domestic consumption (i.e. slow public investment disbursement, gloomy real estate market outlook) and low clinker and cement demand by Chinese buyers.
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