For years, Vietnam’s cement market has been plagued by oversupply, geopolitical challenges, and rising input costs, causing many businesses to struggle or even incur losses. Since early 2025, conditions have improved, but risks remain that could slow recovery.

A wave of construction projects nationwide is driving growth in the building materials sector, especially cement, offering a chance to regain stable momentum.

Positive signs emerge

According to the Ministry of Construction’s Department of Science, Technology, Environment and Building Materials, in the first half of 2025, cement output reached 49.8 million tonnes, up 18% year-on-year. Total cement and clinker consumption reached 54 million tonnes, up 14%, with domestic sales at 37.5 million tonnes (up 18%) and exports at 17 million tonnes (up 6%). Export value totaled about USD 635 million, up 1.7%, with main markets including the Philippines, the US, Singapore, and Malaysia.

Clinker and cement inventories are around 4.5 million tonnes - enough for 20 days of production - ensuring a safe reserve.

Vietnam Cement Industry Corporation (Vicem) produced 10.82 million tonnes, up 9.8%, and sold 12 million tonnes (up 5%). Domestic sales reached 10.09 million tonnes (up 18.4%), and pre-tax profit stood at about USD 51,200.

Acting General Director Ngo Duc Luu attributed the results to close coordination between production and sales, optimizing kiln operations, maintaining clinker supply without excess stockpiling, cutting costs, applying new technologies, and increasing the use of alternative fuels such as waste and sludge, as well as industrial by-products like ash and slag.

In a highly competitive market, Xuan Thanh Cement General Director Vu Quang Bac noted that in tough years, plants slashed prices, sometimes selling at a loss. However, since late 2024, the sector has rebounded, aided by government measures such as lowering the cement export tax from 10% to 5%, which boosted overseas sales. Xuan Thanh has secured long-term contracts for about 600,000 tonnes annually to demanding markets like Singapore and the US, enabling the launch of its third production line and raising total capacity to 16.8 million tonnes a year.

Challenges and efficiency measures

Despite improvements, producers face high raw material costs - construction sand has doubled or tripled in price since late 2024 - slowing the construction market and cement demand. Some producers also struggle with annual mining quotas for limestone and clay, essential cement ingredients, and the lengthy approval process for adjustments or new mining rights. Businesses are calling for more flexible, long-term mining policies aligned with market needs.

Industry experts urge investment in waste-heat recovery power generation. For example, Xuan Thanh Cement’s three lines use such systems to produce nearly 50 MW, cutting electricity use by 30% and saving about USD 4 million annually. However, state-owned cement firms have been slow to adopt this technology.

Circular economy models are gaining ground. Vicem Ha Tien 1 has used ash from thermal power plants and slag from metallurgy in production, along with over 213,000 tonnes of waste as alternative fuel, saving about USD 5.3 million in the first half of 2025. Alternative fuel use now accounts for more than 30% of its clinker production energy.

Deputy Director of the Department of Science, Technology, Environment and Building Materials Le Van Ke said the Ministry of Construction will adjust policies to ease raw material supply, incentivize waste use, and phase out small, polluting production lines. It will also prioritize social housing projects and infrastructure works using cement technologies such as reinforced concrete viaducts and soil stabilization for weak foundations.

The ministry aims to work with localities to expedite project approvals for mining and cement production, aligning provincial and national plans. By year-end, total cement consumption is expected to reach 95-100 million tonnes, up 2-3%.

PV