Hard times for Vietnamese cement firms amidst 2023 industry decline
Many Vietnamese firms have struggled this year with both input and output pressures, incurring heavy losses and even having equity turn negative, said the Vietnam National Cement Association.
In the year to end-November, the entire cement industry's sales of 80 million tons was down 12% year-on-year, domestic market consumption down 16% at 52 million, and exports down 29% at 29 million tons.
An association report attributes the decline to several factors including an ailing real estate market and slower-than-expected progress of public investment projects that affected consumption of construction materials including cement.

A worker prepares cement packaging at a factory of Vicem Ha Tien Cement Joint Stock Company. Photo courtesy of the company.
Besides, prices of input materials such as electricity and coal increased in tandem, even tripled at certain times.
An increase in clinker export tax from 5% to 10% this year put the cement industry at a further disadvantage.
As a result, several local cement giants reported falling profits in the first half of the year.
Cong Thanh Cement Joint Stock Company, based in the north-central province of Thanh Hoa, posted a net loss of nearly VND609 billion ($25 million) in the first half of 2023, compared to a loss of VND538.6 billion in the same period last year.
With losses of VND1,182 billion ($48.5 million) in 2022 and VND881 billion ($36.16 million) in 2021, the company had a negative equity of nearly VND5,789 billion ($237.64 million) at the end of the second quarter.
As of June 30, 2023, its total assets value was VND12,157 billion ($499 million), down 1.5% compared to the beginning of the year. Its liabilities amounted to nearly VND17,946 billion ($736.7 million), with outstanding bond debt of over VND2,373 billion.
As of mid-2023 Cong Thanh Cement had not paid its long-term loan and bond dues of more than VND1,593 billion ($65.4 million) to VietinBank and a short-term loan of nearly VND287 billion ($11.78 million) to Saigon-Hanoi Bank, along with the total overdue interest of nearly VND333 billion.
In its H1/2023 financial statement, DFK Vietnam Auditing Company Ltd. raised grave doubts about the company's continued operations.
Cong Thanh Cement, established in January 2006, has invested in a cement and clinker factory in Tinh Gia district, Thanh Hoa province that’s expected to produce 10,000 tons of clinker per day in its second phase. It has also invested in a concrete crushing station with a capacity of 360 cubic meters per hour in District 9, Ho Chi Minh City.
At the end of Q2/2023, the company had equity of VND900 billion, with chairman Nguyen Cong Ly holding 57.2%; Dong Nai Roofsheet & Construction Material Joint Stock Company 10%; Financiere SA (5%) and other shareholders 27.8%.
While its situation is not as bad as Cong Thanh Cement, accumulated net profit of Hai Phong-based Chinfon Cement Corporation in the first half of 2023 was just 0.4% of the same period in 2022 at VND268 million ($11,000).
As of June 30, 2023, Chinfon Cement's equity was VND1,665 billion ($68.35 million), down 10% compared to the beginning of the year, but on a positive note, its liabilities dropped 19% to VND2,630 billion ($108 million). Its outstanding bond debt was VND400 billion ($16.42 million).
Chinfon Cement owns a cement factory in Hai Phong and a clinker grinding plant at the Hiep Phuoc Industrial Park in Ho Chi Minh City.
Meanwhile, Xuan Thanh Cement Joint Stock Company, based in the northern province of Ha Nam, reported a net profit of VND1.8 billion ($73,890) in the first half of 2023, a positive result compared to a loss of VND30.7 billion ($1.26 million) in 2022, but still far behind the VND296 billion recorded in 2021.
Total assets of Xuan Thanh Cement were valued at VND22,422 billion ($920.44 million) as of June 30, 2023, down more than 3.5% from the beginning of the year. Its equity stood at VND6,836 billion ($280.6 million) and liabilities were VND15,586 billion ($639.8 million). Of which, outstanding bond debt was more than VND2,100 billion ($86.2 million).
Xuan Thanh Cement was established in February 2012, with Nguyen Xuan Thuy as chairman and Vu Quang Bac acting as CEO and legal representative.
From November 2019 to December 2020, it increased its charter capital twice, from VND3,689 billion to VND6,168 billion ($253.2 million), making it one of the largest cement enterprises in the country in terms of charter capital.
A business with close links with Xuan Thanh Cement, Ha Nam-based Long Thanh Cement Joint Stock Company, reported a net profit of nearly VND2.7 billion ($110,837) in H1, down nearly 13% compared to the same period last year. The company had reported losses of VND638 million and VND1.1 billion in 2021 and 2022, respectively.
The business results of listed cement companies in the third quarter of 2023 were also quite gloomy. For example, Vicem Ha Tien Cement Joint Stock Company, listed on the Ho Chi Minh Stock Exchange (HoSE) as HT1, reported an after-tax loss of nearly VND10.3 billion ($422,825), marking its second quarter of losses this year.
Bim Son Cement Joint Stock Company, listed on the Hanoi Stock Exchange (HNX) as BCC, suffered a Q3 net loss of VND57 billion ($2.34 million), marking its fifth consecutive quarter of losses. Vicem But Son Cement Joint Stock Company (HNX: BTS) had a net loss of nearly VND32 billion ($1.31 million), its biggest loss since the first quarter of 2014.
Potential solutions
To help the cement industry overcome current difficulties, Nguyen Quang Hiep, deputy director of the Department of Building Materials under the Ministry of Construction, said that ministries, agencies and localities need to speed up public investment projects and infrastructure construction according to approved plans.
This would strengthen consumption markets for building materials, including cement, he said.
“At the same time, it is necessary to promote implementation of solutions to remove difficulties for the real estate market under the government’s Resolution 33/NQ-CP; as well as accelerate the project to build one million social housing units by 2030,” he added.
Hiep felt the government should postpone the increase in clinker export tax from 5% to 10% and keep the old rate at 5% for another two years, helping cement businesses overcome difficulties in the current period.
“Cement producers themselves need to innovate technology, use energy effectively, and use waste as fuel to replace coal to reduce production costs and become more competitive,” he said.
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