The Ministry of Construction said that on June 15, the Standing Government will hold a conference to remove difficulties in the production of construction materials, cement, and iron and steel.

Many cement production enterprises are facing difficulties when domestic cement consumption has dropped sharply - Photo: D.M.

The conference was chaired by Government leaders with the participation of a number of ministries: Construction, Transport, Industry and Trade, Natural Resources and Environment, enterprises producing cement, iron and steel, and construction materials to Find solutions to stabilize production.

The cement factory stopped production for half a year:

In a recent report sent to the Prime Minister on the situation of Vietnam's cement industry in 2023, the Vietnam Cement Association said that the country currently has 61 cement factories in operation with a total design capacity of 117 million tons/year. year, actual production capacity can reach over 130 million tons/year.

• Source of sand and construction materials for expressways: How long to wait?

• Sea sand will be a material to replace "sand thirst" for urban leveling and highway embankment

• There is a shortage of sand, so we should build a highway sand bridge

About 80% of cement output is produced on modern, advanced and large capacity lines, the remaining about 20% of cement output is produced from small capacity lines.

Vietnam is also the third largest cement producing country in the world, after China and India. But from 2022 until now, domestic cement consumption has dropped sharply, and domestic cement production enterprises have encountered many difficulties in production.

Many cement enterprises have had to shift towards increasing cement exports to maintain production. In 2021, the export volume of cement and clinker will reach about 45 million tons.

The Cement Association believes that if they do not find ways to export, many cement production enterprises will encounter difficulties and face the risk of bankruptcy.

In 2023, the total capacity of the country's cement industry will only reach about 87 million tons of cement and clinker, of which domestic consumption is about 56 million tons and export is 31 million tons. Domestic consumption of cement and clinker is only 84%, export is 99% compared to 2022.

According to Mr. Nguyen Quang Cung - president of the Vietnam Cement Association, the cement industry is facing great difficulties in production and consumption, many businesses are at risk of bankruptcy or selling part of their capital to foreign countries. 

Particularly in 2023, many cement factories will have to stop production for half a year, some factories will stop production for the whole year.

Many housing projects have been slowly implemented in recent times, leading to difficulties in cement and iron and steel consumption

What does the Vietnam Cement Association recommend?

To overcome difficulties in cement production, the Vietnam Cement Association proposed to the Prime Minister and ministries to increase domestic cement consumption by encouraging the use of cement for highways and viaducts in poor geographical areas. Weak soil terrain such as the Mekong Delta, some areas in the Central region, and mountainous areas.

Promote the reinforcement of roadbeds with cement - soil to replace the current traditional technology of covering highway embankments with soil and sand to increase the life of the project.

The Association also proposed that the Government soon submit to the National Assembly the abolition of export tax on clinker and cement. In the immediate future, if not abolished, the export tax rate of 5% on clinker should be maintained.

At the same time, direct banks to reschedule debts, reduce interest rates for cement businesses, prioritize cement businesses to borrow working capital, and discourage FDI investment in the cement industry because domestic businesses have mastered it. technology.

In addition, recently the Vietnam Construction Contractors Association also proposed to the Prime Minister some solutions to remove problems for Vietnamese construction contractors.

Specifically, the Vietnam Construction Contractors Association proposed to the Prime Minister to abolish the unfair mechanism between contractors and investors.

This association said that according to the provisions of the Bidding Law, currently contractors and general construction contractors must fulfill guarantee obligations such as: bid guarantee, contract performance guarantee, advance guarantee, Warranty guarantee when winning bids to execute construction projects.

Meanwhile, investors, especially private investors, are not required to guarantee payment of construction contracts, leading to many private investors circumventing the law and not paying enough construction costs when the contractor contractor to complete the project. 

This has led to many large construction contractors and general contractors across the country such as Delta and Hoa Binh having prolonged construction debt amounting to thousands of billions of dong.

Many construction contractors after completing the project have difficulty with cash flow because they spend money on the project but are not paid on time. The Contractors Association proposed to the Prime Minister and ministries to supplement payment guarantee regulations for project investors, especially private investors, to ensure fair payment for construction contractors.