FiinGroup’s Expert: Supply Surplus Situation Remains until 2030 Despite Long-term Growth Potential

Hanoi, Vietnam – [on June 11th, 2024] – Mr. Hai Khieu, Director – Head of Market Research and Consulting Division at FiinGroup joined as a speaker at INTERCEM Asia – a premier conference for cement industry executives worldwide. The conference was attended by 300 cement professionals and industry experts from countries across Asia and further in the USA, Australia, and South Africa, for networking, sourcing materials, and doing business with cement producers and traders.

During the keynote presentation titled "Vietnam Cement Oversupply Situation: Market Outlook & Implication for Foreign Buyers”, Mr. Hai Khieu delved into the challenges and opportunities presented by the Vietnamese cement market's current situation. In the context that Vietnam's cement industry is still facing an oversupply situation, the presentation shed light on the outlook for clinker and cement export activities as well as the implications to navigate this dynamic landscape.  

Further discussing this topic at INTERCEM Asia 2024, below are the key topics of discussion: 

1. Vietnam's cement industry is facing the supply surplus situation with the average sector utilization rate of below 80% until 2030. Nonetheless, production capacity continues to rise with the active expansion of private manufacturers including Long Thanh, Thai Group, Thanh Thang, etc. The supply surplus situation resulted in the deterioration in local manufacturers’ profitability with a low EBITDA margin of 9% in 2023 (compared to 11% to 17% in the period 2019-22) and negative NPM for the first time in the last five years. 

2. Domestic cement consumption in Vietnam is forecasted to remain weak in 2024 but has huge potential in the long run. Despite these short-term headwinds, clinker and cement demand in Vietnam remains solid in the long term, driven by high demand for housing and extensive infrastructure development plans (energy, transportation such as highways, seaports, airports, industrial and warehousing facilities, etc.).  

3. Vietnam's cement export activities saw a strong recovery whereas clinker exports remained sluggish. Key export destinations like Bangladesh and the Philippines recorded strong growth, while demand from China remained low. 

Overall, Vietnam cement industry still needs to overcome obstacles with the supply surplus situation and the weak domestic demand until 2025. To navigate these challenges, domestic manufacturers might need to diversify markets while improving operation efficiency (i.e. energy efficiency, decarbonization initiatives), consolidating in order to capitalize on growth potential in the long run.  

In the past few years, FiinGroup has carried out numerous consulting and research projects in the cement sector, supporting domestic and foreign cement manufacturers/traders with valuable insights to make informed decisions and stay ahead of the competition.  

For reference, the full details of the presentation by FiinGroup can be accessed HERE. 

Our latest publication on Vietnam Cement Market Report 2024 can be found HERE .

For more information about FiinGroup’s Market Research and Consulting Division and our investor services, please call +84 (24) 3562 6962 or email to research.support@fiingroup.vn. 

About FiinGroup 

FiinGroup is Vietnam’s leading provider of financial data analytics platforms, business information, market research and consulting, credit ratings, and other data-driven analytics services via Platform as a Service (PaaS), annual package, and on-call services. 

FiinGroup has successfully supported the completion of numerous economic concentration notification dossiers, conducted many independent market research reports, commercial due diligence in M&A transactions, M&A transaction advisory and other services, assisting domestic and foreign investors to successfully penetrate/expand business in Vietnam. 

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