This report presents a board range of topics, both sector-specific and crosscutting market issues.
What's New? Vietnam cement industry expanded by 0.9% in 2020, mainly driven by buoyant clinker and cement export activities while domestic sales recorded deceleration due to negative impact of COVID-19. Given weakened domestic demand & the rise in fuel cost, list cement manufacturers recorded a deteriorated average EBITDA margin from 17.0% in 2019 to only 15.8% in 2020.
This 2021 issue provides the latest information on current supply - demand situation in Vietnam cement sector with the in-depth analysis on key growth drivers, outlook for 2021 as well as forecast analysis until 2030. Especially, the analysis on retail bagged cement price for PCB30 and PCB40 by region and key brands is also included in this report.
Below are the most critical findings in our eighth issue:
- 1. Domestic cement consumption reached 62.1 million tons in 2020, declining by 5.6% (YoY) due to negative impact of COVID-19. By region, sales volume in the North and the South contracted by 8.2% and 6.5%, respectively, while Central recorded a slight increase by 1.8% thanks to the rebuilding and reconstruction after the heavy storms in the summer 2020 and a boost in construction of industrial parks.
- 2. Clinker and cement export volume continued strong growth momentum a surge by 14.9% (YoY) in total export volume in 2020. The market is driven by high demand from "traditional" export markets including China and the Philippines as well as Vietnamese cement manufacturers' effort to tap on new markets.
- 3. Despite supply surplus situation, leading private cement manufacturers continue to develop new facilities aggressively amid COVID-19 to meet demand from overseas market. Particularly, many expansion projects developed by local private groups including Vissai, Long Son, Thanh Thang, Fico-YTL and SCC-VN are expected to launch the commercial operation in the next 5 years, boosting Vietnam production capacity up to 149.3 million tons of cement per annum by 2025.
- 4. Local private manufacturers continued leading the market, accounting for 41% of market share by domestic cement sales volume in 2020. VICEM and leading private players such as Vissai and Long Son recorded a good performance with full utilization rate of 100% in 2020 while foreign-owned players' figure slumped to 65% in 2020.
- 5. Vietnam cement sector witnessed deteriorated profit margin due to the rise in fuel cost and slow domestic cement consumption. List cement manufacturers recorded a deteriorated average EBITDA margin from 17.0% in 2019 to only 15.8% in 2020. This could be explained by a slump by 6.3% in net sales due to low demand in domestic market and a surge by 20% in coal price (which is driven by rising demand from China and reduction in production of major suppliers such as Australia). In addition, given fierce competition due to low demand, cement manufacturers spent higher marketing & selling expense to boost sales, contributing to lower EBITDA margin for the year 2020.
- 6. Domestic cement market in Vietnam is forecasted to have neutral outlook in 2021 while cement and clinker export is projected at positive outlook thanks to high demand from overseas buyers and local manufacturers to explore new markets.