Continuing to grow
Already one of the largest cement producers in the world, Vietnam is continuing to grow its production capacity, with an expected 7.1Mta of capacity expected to come online this year alone at Tan Thang (2.5Mta) and Xuan Thanh3 (4.6Mta) – although that was before the outbreak of the COVID-19 pandemic.1 In total, installed capacity is expected to reach 130Mta by 2023.2
Much of this expansion is fuelled by demand for Vietnamese cement on the export market. Of the 99Mt of cement produced by the country in 2019, 34Mt was exported3, making the country one of the world’s leading cement exporters. China, the Philippines and Bangladesh are the most significant buyers, although Vietnamese cement also made it as far afield as Peru.
A fortunate position
Vietnam’s position as an exporter owes much to its favourable geology, geography, demographics and climate. With its long coastline and deep-water harbours, the country is within easy reach of the Indian Ocean and the markets of South Asia and Africa, as well as the neighbouring markets of southeast and east Asia. Meanwhile, its plentiful and easily-accessible supplies of limestone, coupled with a large labour pool, enable the low-cost production of high-quality cement, allowing Vietnamese cement companies to compete with local suppliers in countries like the Philippines, even with the addition of freight costs.
The country’s climate – with its wet and dry seasons – also supports its export business with cement companies turning to exports when the rains come and domestic construction activity slows.
That is not to say Vietnam is without challenges, however. In common with the rest of the world, the Vietnamese cement industry has been hit by COVID-19, which has slowed demand for cement both domestically and in key export markets. In response, the government has announced stimulus packages worth about US$12.1 billion to help reduce the impact of the pandemic on the economy. Cement demand is anticipated to pick up again through the second half of the year.2 Export markets may be more problematic but Vietnam’s strengths put it in good stead to take advantage when demand begins to recover.
COVID-19 has also posed challenges to the completion of CAPEX projects. Much of FLSmidth’s support of the new Tan Thang production line, which it supplied, is by necessity now being offered remotely, after the company had to repatriate workers home due to the pandemic. The plant has now started up and is producing clinker as it goes through performance guarantee testing.
Thanks to our solutions and the professionalism of the team, we are able to support our customer remotely through final commissioning and to obtain stable production
Developing a sustainable cement industry
Beyond the immediate challenge posed by the current health crisis, the Vietnamese cement industry is facing more long-term environmental and sustainability challenges. The country was ranked 15th by IQAir in its assessment of the most polluted countries in the world in 2019 with Hanoi, the capital city, often suffering from very poor air quality. Hanoi lies with easy reach of many of the country’s cement plants, underscoring the importance of improving the cement industry’s environmental footprint. To this end, the government has set objectives to improve efficiency and reduce the environmental impact of cement production.
To support this objective, in February, FLSmidth and VICEM, the largest cement producer in Vietnam, announced a cooperation agreement to pioneer new solutions to improve the sustainability of the sector. The agreement will focus particularly on increasing use of alternative fuels from municipal and other waste streams, such as biomass from the country’s rice and forestry industries.
The cooperation agreement is the latest moment in a long history of FLSmidth support for the Vietnamese cement industry. The company supplied Vietnam’s first cement plant, Hai Phong Cement, 120 years ago. It remains a major supplier to the industry, including the 5000tpd line at Tan Thang and a 12,500tpd production line at Xuan Thanh Cement, one of the largest in the world, with another similarly-sized line on the way.
Turning to alternative fuels
“At the moment, most cement plants in Vietnam use coal to energise their process with only limited utilisation of alternative fuels,” said Maxime Ramael. “With our technologies, we believe we can support the Vietnamese cement industry to dramatically increase the alternative fuel substitution rate, reducing the amount of coal used by the industry and providing a sustainable solution to Vietnam’s waste disposal.”
As part of its ambition to enable cement companies to operate with zero emissions by 2030, the company is developing solutions to enable a 100% switch to alternative fuels. These include the FLSmidth Pfister® Alternative Fuels Starter Kit, as well as the In-Line Calciner (ILC) and HOTDISC® combustion device.
The Pfister Alternative Fuels Starter Kit is a flexible plug-and-play system that includes all the basics a cement plant needs to begin using alternative fuels at a significant level, including material handling (either infeed hopper or docking station for direct unload), Pfister rotary weighfeeder for accurate fuel dosing and FLSmidth JetFlex® burner, which has been specifically designed for alternative fuels.
The ILC Calciner meanwhile helps lower NOX and CO emissions, while also allowing the integration of FLSmidth’s HOTDISC technology into the process, which enables the substitution of calciner fuel with a wide range of alternative fuels.
Supporting efficiency and reliability
Efficiency and reliability are also key factors in the success of Vietnamese cement companies. For example, the cement produced at the 12,500td Xuan Thanh line is considered as the most cost effective in Vietnam, while keeping the high quality that is expected from cement produced by FLSmidth equipment, both important elements in marketing the cement produced there for export.
Success in the long run is being secured through constant evolution and willingness to test new technologies and processes optimising the production. A recent example of this we have at Tan Thang, where FLSmidth has installed its first two-base kiln in Vietnam. “The biggest advantage of the two-base kiln is that it is self-aligning, so maintenance is lower and there is less risk of stoppages. This maximises kiln availability compared to the traditional three-base kiln,” explained Maxime Ramael. “Despite the technology being around for 10-15 years, it is still rare that cement companies opt for it. It is a sign of the trust and respect Tan Thang has for FLSmidth that they made the choice to go for it.”
A long history building a bright future
Tan Thang and Xuan Thanh are just a couple of examples of FLSmidth’s continuing support of the Vietnamese cement industry – support that is set to continue into the future, according to Maxime Ramael. “With our 120 years of history in the country, we are not only able to look back at past successes but also look to the future. We are committed to supporting the Vietnamese cement industry and in that way, contribute to the development of Vietnam.”
- “Vietnam to add 7.1Mta of cement capacity in 2020”, CemNet (31 January 2020): Link
- “FiinResearch: Vietnam Cement market witnessed significantly reduced growth in 2019 and continue being hit by COVID-19 in the first half of 2020”, FiinResearch (9 April 2020): Link
- "Vietnam cement sales expand 13% in December", ICR Research (12 February 2020): Link
This article was first published in the June edition of International Cement Review.