[Sample Report] - Vietnam Cement Market 2021
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The Vietnam Cement Market Report 2021 provides an analysis of the cement industry's performance, highlighting a 0.9% growth in total sales in 2020, driven mainly by buoyant export activities despite a decline in domestic consumption due to COVID-19. The report forecasts a supply surplus in the cement market until 2029, with predictions for a 17% increase in exports in 2021, supported by strong demand from markets like the Philippines and China. Additionally, local private manufacturers dominated the market, capturing 41% of the domestic sales volume in 2020.
[Sample Report] - Vietnam Cement Market 2021
- 1. ‹#› VIETNAM CEMENT MARKET REPORT 2021 Date of the report: April 2021 Part of FiinGroup’s Industry Report Series for Vietnam @ 2021 FiinGroup Corporation. All rights reserved. All information contained in this publication is copyrighted in the name of FiinGroup, and as such no part of this publication may be reproduced, repackaged, redistributed, resold in whole or in any part, or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping, or by information storage or retrieval, or by any other means, without the express written consent of the publisher.
- 2. 2 Table of Contents Part Content Page Executive Summary 5 - 8 1 Section 1: Supply and Demand Analysis 9 - 24 1.1 Demand Analysis 9 - 15 1.2 Supply Analysis 16 - 19 1.3 Forecast Analysis 20 - 24 2 Section 2: Competition landscape 25 - 36 2.1 Market Share 25 - 29 2.2 Retail Cement Price Analysis 30 - 36 3 Section 3: Sector Financial Performance 37 - 42 4 Section 4: Market Outlook 43 - 51 Appendices Appendix 1: Clinker Facilities in Vietnam 53 - 55 Appendix 2: Clinker & Cement Export Activities 56 - 60 Appendix 1: Selective Listed Cement Companies’ Factsheet 61 - 64
- 3. 3 Biinform® Portal Vietnam cement industry expanded by 0.9% in 2020, mainly driven by buoyant clinker and cement export activities Vietnam Cement Market Report 2021 – Sample Content 1. Demand Analysis Figure 1: Total sales volume of cement & clinker in Vietnam, mn tons Figure 2: Annual sales growth of Vietnam cement industry Source: FiinResearch from VNCA, General Customs Cement & clinker export volume in 2019 is amended to 30.8mn tons (compared to 30.7mn tons in Vietnam Cement Market Report 2020) to reflect the revised official data from General Customs. Source: FiinResearch from VNCA, General Customs ▪ Total clinker and cement sales in Vietnam stayed at 97.5mn tons in 2020, expanding by 0.9% (YoY). Of which, domestic cement consumption reached 62.3 million tons in 2020, declining by 5.4% (YoY) while clinker and especially cement export remained strong with a surge by 14.3% (YoY) in export volume in 2020. ▪ The deceleration in domestic demand could be explained by negative impact of COVID-19. Construction activities were disrupted due to the stringent measures taken by the government to contain the spread of COVID-19 as well as real estate developers’ reluctance to launch new projects due to negative market outlook. Following the subdued construction growth in the first half of 2020, the industry was showing signs of regaining the momentum thanks to the improvement in the public investment disbursement in 2H2020, however, domestic cement demand stayed low with a 5.4% decrease for the whole year 2020. • Clinker and especially cement export remained strong thanks to rising demand from China and Philippines. China remained the key destination for clinker & cement export from Vietnam in 2020, which could be explained by the temporary supply shortage in the South of China due to environmental protection inspections as well as rising cement demand from infrastructure developments in the South of China to support economic growth amid COVID-19 pandemic. As a result, domestic clinker price in the South of China kept increasing during the period 2020-2021, triggering Chinese buyers to source clinker and cement from Vietnam. TOTAL SALES -15% 0% 15% 30% 45% 60% 2016 2017 2018 2019 2020 Domestic cement sales Clinker & cement export TOTAL Buoyant clinker and cement export activities drove the market in 2020 0 22 44 66 88 110 2016 2017 2018 2019 2020 Domestic cement sales Clinker & cement export Note: Some figures were removed in this Sample Content.
- 4. 4 Biinform® Portal Except for Central market, domestic market recorded negative sales volume growth in 2020 Vietnam Cement Market Report 2021 – Sample Content 1. Demand Analysis Figure 3: Vietnam domestic cement sales volume by region, mn tons Figure 4: Vietnam domestic cement sales growth by region Source: FiinResearch from VNCA Source: FiinResearch from VNCA DOMESTIC MARKET • There was an apparent divergence in growth momentum of domestic market across the country, with a slight increase by 1.8% in Central while sales volume in the North and the South contracted by 8.2% and 6.5%, respectively. The remarkable rise of Central cement sales can be attributed to an increase in demand for rebuilding and reconstruction as a result of the destruction of the heavy storms in the summer. In addition, a boost in construction of industrial parks, mainly focused on the provinces of the Central region, despite the downward trend across the real estate segments also contributed to the region’s significant increase. • The decline in the North and South of Vietnam mainly due to negative impact of COVID-19 due to social distancing, real estate developers’ reluctance to launch new projects due to negative market outlook. In 2020, the condominium market in Ho Chi Minh City recorded a significant drop in new launch supply, reaching 17,272 units, a decrease of 35% y-o-y. This number signified a dramatic downturn in term of projects, reporting a total of 21 projects were launched in 2020 compared to 36 projects in 2019. -10% -5% 0% 5% 10% 15% 2016 2017 2018 2019 2020 North South Central 0 15 30 45 60 75 2016 2017 2018 2019 2020 North South Central The deceleration in domestic demand in 2020 due to negative impact of COVID-19 Note: Some figures were removed in this Sample Content.
- 5. 5 Clinker and cement export volume continued strong growth momentum in 2020 thanks to high demand from Chinese and Philippine buyers Source: FiinResearch, General Customs • Cement & clinker export activities maintained an upward trend for five consecutive years, reaching 35.2 million tons in 2020. The market was driven high demand from both “traditional” export markets including China and the Philippines as well as new markets including South Africa and US. • Clinker export volume to China hiked in Q3.2020 thanks to the recovery of construction sector & cement price in China. Multiple local investment projects, especially large-scaled infrastructure projects in the South of China including interconnection of infrastructure in the Guangdong-Hong Kong-Macao Greater Bay Area, the Hainan Free Trade Port, started construction as Chinese government’s measure to support the economic growth amid COVID-19 pandemic. On the supply side, Chinese Government continued to maintain restrictive environment protection policies on cement factories in the effort to address China's pollution situation, resulting in a decrease in actual production and triggering Chinese buyers to source clinker and cement from Vietnam. • Cement export volume to the Philippines remained high thanks to “Build, Build, Build” infrastructure development program by the Philippines Government. • In addition, Vietnamese cement manufacturers also managed to diversify the cement export destinations to other markets including South Africa, Malaysia, US, contributing to the buoyant clinker and cement export activities in 2020. EXPORT ACTIVITIES Total export vol. -4.4% 27.1% 45.6% 7.1% 14.9% - clinker 22.4% 49.2% 35.3% -2.5% 6.3% - cement -31.7% -13.3% 78.1% 30.7% 29.4% Y-o-y Growth Rate Figure 6: Monthly cement & clinker export volume ,mn tons Figure 5: Annual clinker & cement export volume, mn tons 0 1 2 3 4 5 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 clinker cement Vietnam Cement Market Report 2021 – Sample Content 1. Demand Analysis 0 12 24 36 48 60 2016 2017 2018 2019 2020 clinker cement Source: FiinResearch, General Customs A surge in clinker export volume in Q3.2020, driven by Chinese buyers Note: Some figures were removed in this Sample Content.
- 6. 6 Biinform® Portal Cement export price remained stable with avg. FOB price of US$44.7 per ton at Hon Gai Port in 2020 while clinker export price recorded a surge by 20.7% (QoQ) & 18.8% (QoQ) in Q3.2020 & Q1.2021, driven by high demand of Chinese & Bangladesh buyers Figure 7: Monthly average clinker and cement export price, US$ per ton Source: FiinResearch from General Customs The figure covers FOB export price of clinker & cement at major ports which accounted for over 80% of total clinker & cement export volume in 2020 in order to have better view on the movement of clinker & export price. In particular, clinker export volume at Cam Pha Port accounted for 80% of total clinker export volume in 2020 while cement export volume at Hon Gai Port, Cua Lo Port and Nghi Son Port accounted for 96% of total cement export volume in 2020. EXPORT PRICE • Except for Q1.2020, cement export price remained stable during the review period 2020 – 2021 with the average FOB price of US$44.7, US$40.2 and US$38.1 per ton at Hon Gai Port, Cua Lo Port and Nghi Son Port, respectively. In particular, Q1.2020 recorded the active participation of premium brand-owners including VICEM Hai Phong, Chinfon, VICEM Ha Long in cement export activities, resulting in high average FOB export price at Hon Gai Port. • FOB clinker export price at Cam Pha Port was highly volatile with a surge by 20.7% (QoQ) & 18.8% (QoQ) in Q3.2020 & Q1.2021. Of which, the surge in Q1.2020 was mainly driven by high demands from Chinese buyers while the surge in Q1.2021 was attributed to high demand of both Chinese and Bangladesh buyers. Please kindly refer to Page 13 for in-depth analysis of clinker demand of Chinese and Bangladesh buyers in 2021-Q1.2021 as well as market outlook by FiinGroup. 30 34 38 42 46 50 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 FOB Cam Pha - clinker FOB Hon Gai - cement FOB Cua Lo - cement FOB Nghi Son - cement A surge by 20.7% (QoQ) in Q3.2020, driven by Chinese buyers A surge by 18.8% (QoQ) in Q1.2021, driven by high demand of Chinese & Bangladesh buyers A surge in Q1.2021, driven by high-price brands including VICEM Hai Phong, Chinfon and Ha Long Vietnam Cement Market Report 2021 – Sample Content 1. Demand Analysis Note: Some figures were removed in this Sample Content.
- 7. 7 Biinform® Portal Designed capacity for clinker & cement in Vietnam is forecasted to surge in the next four years with new facilities by private cement manufacturers Figure 8: Clinker and cement designed capacity in Vietnam Clinker Cement FORECAST Owner Factory name Province Designed capacity (MTPA) Clinker Cement Thanh Thang Thanh Liem – Assembly 3 (1) Ha Nam xx xx Tan Thang Tan Thang Nghe An xx xx Long Son Long Son – Assembly 3 (1) Thanh Hoa xx xx Started commercial operation in 2020 xx xx Long Son Nghi Son Grinding Station Thanh Hoa xx xx Thanh Thang Thanh Liem – Assembly 4 (2) Ha Nam xx xx Long Thanh Long Thanh Ha Nam xx xx SCC-VN Insee 2 – Phase 1 Kien Giang xx xx Fico-YTL Production line 2 Tay Ninh xx xx Manh Binh Grinding Ha Giang Ha Giang xx xx Can Tho Can Tho - Hau Giang Cement (Assembly 4) (2) Hau Giang xx xx To complete in 2021 xx xx Dai Duong Dai Duong Factory 1 Thanh Hoa xx xx Long Son Long Son – Assembly 4 Thanh Hoa xx xx To complete in 2022 xx xx Vissai Do Luong – Phase 2 Nghe An xx xx Xuan Khiem Xuan Son – Assembly 1 Hoa Binh xx xx To complete in 2023 xx xx Dai Duong Dai Duong Factory 2 Thanh Hoa xx xx To complete in 2024 xx xx Thanh Thang Thanh Liem – Assembly 5 Ha Nam xx xx To complete in 2025 xx xx New facilities in 2020 - 2024 (1) New installed capacity of Thanh Thang – Assembly 3 & Long Son – Assembly 3 were included in 2021 as these production lines started commercial operation by the end of December 2020. (2) New installed capacity of Thanh Thang – Assembly 4 & Can Tho Hau Giang – Assembly 4 were included in 2022 as these production lines expect to start commercial operation by the end of December 2021. FORECAST Vietnam Cement Market Report 2021 – Sample Content 2. Supply Analysis Source: FiinResearch Total linker & cement designed capacity in Vietnam were amended compared to Vietnam Cement Market Report 2020 as provincial low-scaled facilities were included in the 2021 issue. 70 80 90 100 110 120 2020 2021f 2022f 2023f 2024f 2025f 110 120 130 140 150 160 2020 2021f 2022f 2023f 2024f 2025f Note: Some figures were removed in this Sample Content.
- 8. 8 0 30 60 90 120 150 180 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Supply Demand Vietnam Cement Market Report 2021 – Sample Content 3. Forecast Analysis Vietnam cement industry is forecasted to face supply surplus situation until 2029 and the market is driven by buoyant cement export activities thanks to high demand from the Philippines & China as well as local cement manufacturers to tap on new overseas market amid COVID-19 pandemic Figure 9: Forecast of cement designed capacity and cement sales volume in Vietnam, mn tons Source: FiinResearch’s estimated Note: Utilization rate is calculated based on existing & certain projects with detailed timelines only CEMENT • FiinGroup forecasts domestic cement demand to expand by 0% in 2021 and avg. 5% p.a. for the period 2022-2030 with strong fundamental of infrastructure development needs; residential (housing) demand and commercial & hospitality real estate in Vietnam. • FiinGroup forecasts cement export to expand by 17% (YoY) in 2021 & 15% (YoY) from 2022 onwards thanks to high demand from “traditional” markets including the Philippines & China as well as Vietnamese cement manufacturers’ effort to tap on new markets. • FiinGroup assigns positive outlook for Philippine market thanks to public spending on infrastructure and social assistance, better progress in the country’s coronavirus (COVID-19) vaccination drive in this country. In fact, the Philippine government’s expansionary fiscal program, accommodative monetary policy and infrastructure development program will put the economy on a firm recovery path by the second half of 2021, especially construction sector, indicating rising demand for cement from Philippine buyers. • In addition, Chinese buyers continue to source clinker from Vietnam as clinker export price remained high, attributing to the high growth projection for the period 2021-2030. 122 existing facilities & 13 certain projects with detailed timelines FORECAST ANALYSIS HISTORICAL DATA Utilization rate xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% xx% Note: Some figures were removed in this Sample Content.
- 9. 9 Local private manufacturers continued leading the market, accounting for 41% of market share by domestic cement sales volume in 2020 Vietnam Cement Market Report 2021 – Sample Content 4. Competitive landscape | Market Share Source: FiinResearch from VNCA Figure 10: Market share by domestic sales volume of key groups of players, 2020 DOMESTIC MARKET In 2020, Vietnam cement market was led by Local private & Other SOEs manufacturers. In particular: (i) VICEM stayed 2nd, accounted for 33.5% market share with 5 biggest names including Ha Tien, Hoang Thach, But Son, Bim Son & Hai Phong (ii) Foreign-owned accounted for 29.7% market share with some big names including SCC-VN, Chinfon, SCG, TLCC & Luks. (iii) Local private & Other SOEs led the market, accounting for approx. 41% market share by domestic cement sales volume in 2020. Big names include Long Son, Vissai, Xuan Thanh, Thanh Thang & Cam Pha. VICEM Ha Tien VICEM Hoang Thach VICEM But Son VICEM Bim Son VICEM Hai Phong VICEM Hoang Mai Ha Long Song Thao VICEM Tam Diep VICEM Hai Van SCC-VN Chinfon SCG TLCC Luks Phuc Son He Duong 2020 VICEM Foreign-owned Local private & other SOEs Long Son Xuan Thanh Vissai Thanh Thang Cam Pha Pomihoa Cong Thanh Tay Do Xuan Thanh (QN) Others 2019 Note: Some figures were removed in this Sample Content.
- 10. 10 Figure 11: Profitability of listed cement companies in Vietnam Vietnam Cement Market Report 2021 – Sample Content 5. Sector Financial Performance Cement industry experienced deteriorated profit margin as the consequence of COVID-10 in 2020 Figure 12: EBITDA margin of selected listed cement companies, 2019 vs. 2020 In 2020, only La Hien, Yen Binh and Vicem Hai Van recorded an improvement in their profitability (reflected by EBITDA margin). Meanwhile, other cement players suffered from a slight drop. Among them, VICEM But Son had the largest gap between their two years’ performances. Source: FiinResearch The analysis is conducted based on financial data of 10 listed cement companies which accounted for approximately 17% of cement designed capacity and 25% of cement domestic sales volume in 2020. As of April 2021, financial information of unlisted cement companies for FY2020 has not yet available. FiinGroup will update Section 3: Sector Financial Performance once the information is available. 0% 5% 10% 15% 20% 25% 2015 2016 2017 2018 2019 2020 Operating profit margin Net profit margin EBITDA margin v 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% VVMI Quan Trieu Cement Ha Tien 1 Cement Sai Son Cement La Hien Cement Bim Son Cement Yen Binh Cement Vicem Hai Van VICEM ButSon VICEM Hoang Mai cement 2019 2020 15.8% EBITDA margin 5.4% Net Profit margin 1.2%, compared with 2019 0.7%, compared with 2019 Note: Some figures were removed in this Sample Content.
- 11. ‹#› Contact us FiinResearch is part of FiinGroup, a Vietnam’s leading provider of financial data, business information, industry research and other data- driven analytics services. Ho Chi Minh City Branch 3rd Floor, Profomilk Plaza Building, 51-53 Vo Van Tan Street, Ward 6, District 3, Ho Chi Minh City, Vietnam T: +84 (028) 3933 3586/ 85 E: [email protected] Head Office 10th Floor, Peakview Tower, 36 Hoang Cau Street, O Cho Dua Ward, Dong Da District, Hanoi, Vietnam T: +84 (024) 3562 6962 E: [email protected] W: https://fiingroup.vn W: https://fiinresearch.vn Dong Le, CFA Managing Director, Head of Market Research and Consulting Services T: +84 (024) 3562 6962 (ext. 110) E: [email protected] Hai Khieu Senior Manager, Market Research and Consulting Services T: +84 (024) 3562 6962 (ext.: 120) E: [email protected]