Decision No. 108/2005/QD-TTg Approving the Planning for the Development of Vietnam's Cement Industry until 2010 and Orientations until 2020

DECISION OF THE PRIME MINISTER

Regarding the approval of the Planning for the Development of Vietnam's Cement Industry

until 2010 and orientations until 2020

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Construction Law dated November 26, 2003;

Pursuant to Decree No. 16/2005/NĐ-CP dated February 7, 2005 of the Government on Managing Investment Projects for Construction Works;

Considering the proposal of the Minister of Construction,

DECISION:

Article 1. Approve the Adjusted Planning for the Development of Vietnam's Cement Industry until 2010 and the orientation until 2020 with the main contents as follows:

1. Development Goals:

The development goal of Vietnam's cement industry until 2010 and the orientation until 2020 is to meet domestic demand for cement (both in quantity and variety), exportable when conditions permit; making the cement industry a strong industry with modern technology capable of competing on both domestic and international markets in the process of integration.

2. Development Views.

a) On investment:

Investments in cement projects must ensure economic and social efficiency, competitive products under regional and international economic integration conditions, rational use of resources, protection of ecological, historical, cultural, scenic environments, and ensuring requirements for security and defense. Prioritize the development of expansion projects, new projects in the South and Central regions, and projects in northern mountainous provinces. Do not invest in new vertical kiln cement plants or independent grinding stations not connected to domestic clinker production facilities.

b) On technology:

Utilize advanced technology, high levels of automation, select appropriate equipment to ensure the production of high-quality, stable products at reasonable costs and diverse product lines. Maximize resource, mineral, and energy savings in cement production. Diversify raw material and fuel sources for cement production, including the use of waste from other industries, ensuring product quality standards and environmental protection. Gradually transition vertical kiln technology to rotary kilns and aim to eliminate vertical kiln cement technology before 2020.

c) On capacity scale:

Prioritize the development of large-scale cement plants; choose appropriate capacity scales for projects in mountainous, remote areas. Projects transitioning from vertical kilns to rotary kilns can apply medium and small scales but not less than 1,000 tons of clinker per day.

d) On planning layout:

Cement plants must be constructed in locations with favorable conditions for raw materials, infrastructure, based on local and regional market demands, considering supply-demand regulation nationwide, focusing mainly on eight prospective clinker and cement production areas:

Concentrate on building large-scale clinker production plants in areas with resources and convenient waterway transportation for transporting clinker to the South.

For the Northwest and Northeast mountainous regions, primarily build plants suitable in scale to meet local and nearby socio-economic development needs.

3. Planning Indicators.

a) On ore reserves:

- For projects with a capacity over 3,000 tons of clinker per day: the minimum ore reserve must be sufficient for continuous production for 30 years.

- For projects with a capacity under 3,000 tons of clinker per day: the ore reserve must be sufficient for continuous production for 20 to 25 years.

b) Technical production indicators for cement:

Investment projects for developing the cement industry must achieve advanced indicators for fuel, raw material consumption, electricity, materials, dust concentration in exhaust gases, noise intensity, level of automation, labor productivity, and the ratio of domestically manufactured equipment.

Some specific indicators are as follows:

c) Requirements for vertical kiln cement plants undergoing renovation and technological conversion to rotary kilns:

- Must have repaid all investment loans and have a need for technological renovation and conversion.

- Must have limestone and clay raw material sources meeting quality requirements with reserves ensuring plant operation for more than 20 years.

- Must have a market for product sales.

- Must have financial capability.

- Must have a management team with extensive experience.

Vertical kiln cement plants that do not meet the above criteria for renovation and conversion must have plans to shift production direction or liquidate operations before 2020.

d) Requirements for grinding stations:

- Must be connected to stable domestic clinker production and supply facilities.

- Must comply with environmental protection requirements.

e) Demand and plan for mobilizing cement production capacity:

- Forecast cement demand according to time periods:

+ Nationwide:

Unit: million tons

+ By 8 economic zones:

Unit: million tons

- Plan for mobilizing cement production capacity and investment projects according to the planning includes:

+ Projects listed in the attached Appendix:

. List of existing cement plants (sections A & D).

. List of cement projects currently under construction and approved for investment by the Prime Minister (section B).

. List of cement projects with identified investors and planned implementation schedules (section C).

. List of vertical kiln cement plants planned for conversion to rotary kiln technology (section D1).

. Potential projects expected to attract investment (section E): project name, location, capacity scale, and investment schedule agreed upon with the relevant ministry.

+ Projects outside the list in the attached Appendix may only proceed with initial investment steps after obtaining approval from the Prime Minister.

4. On Investment Capital:

Mobilize maximum domestic and foreign capital sources including credit, bond issuance, own capital, equity, joint venture contributions, etc., for cement investment. Encourage various economic sectors to participate in cement investment, including foreign investment through joint ventures or shareholding.

The State shall provide appropriate support for cement development projects in mountainous, remote, and difficult areas through existing mechanisms and policies.

5. On inter-ministerial coordination:

Harmonize and synchronize production and consumption, as well as related industries and fields such as machinery, transportation, natural resources and environment, science and technology, education and training, infrastructure construction, etc., to best meet the needs of the cement industry's development while creating conditions for other industries to develop. The development of the cement industry must be linked with the Government’s key mechanical program. Maximize the capabilities of the machinery, metallurgy, information technology, automation, and other industries in research, design, manufacturing equipment, technology, and replacement parts for the cement industry to rapidly increase the proportion of domestically manufactured equipment. The Government will support the purchase of technology to design and manufacture equipment for the cement industry to gradually replace imported equipment.

Mobilize all resources to quickly master the design, manufacturing, installation, and operation of cement production lines with a capacity up to 2,500 tons of clinker per day using modern technology, at the latest by 2007. For large cement projects, the ratio of domestic goods and manufactured equipment usage should reach 60% by weight and 25-30% by value. Encourage enterprises with sufficient technical and financial capacity to undertake general contracting for cement projects.

Article 2. Implementation organization:

1. The Ministry of Construction shall be responsible for:

- Developing a five-year plan to implement investment and development of the cement industry to meet market demand and national socio-economic development goals according to this revised planning.

- Managing and directing implementation according to the approved revised planning.

- Taking the lead and coordinating with relevant ministries and sectors to study and improve mechanisms and policies, and take specific measures to accelerate the progress of cement project investments.

- Developing detailed plans and directing their implementation to gradually master the design, manufacturing, installation, and operation of cement production lines.

- Taking the lead and coordinating with the Ministry of Industry to direct the implementation of programs for the manufacturing of complete sets of equipment for cement production lines.

2. The Ministry of Natural Resources and Environment shall coordinate with the Ministry of Construction to establish plans for surveying, exploration, and evaluating cement raw material reserves in a timely manner to meet development requirements according to the planning; studying and supplementing regulations to simplify procedures for granting exploration permits and mining permits; coordinating with the Ministry of Construction and provincial People's Committees to take measures to strictly manage limestone resource extraction for cement production. Gradually implement resource extraction according to planning to use resources efficiently and protect the ecological environment for sustainable development.

3. The Ministry of Finance, the Ministry of Planning and Investment, and the State Bank of Vietnam shall continue to study and improve effective capital support mechanisms for cement development investment.

4. The Ministry of Transport shall take the lead and coordinate with the Ministry of Construction to calculate and establish plans for the synchronous development of transportation including specialized and general transport vehicles, loading and unloading equipment, river ports, sea ports, railway and road systems, transfer station locations, and distribution stations to meet the development requirements of the cement industry according to the planning.

5. The Ministry of Education and Training shall take the lead and coordinate with the Ministry of Construction and the Ministry of Labor, Invalids and Social Affairs to establish programs and direct the organization of training for engineers, managers, design consultants, technical workers, and postgraduate staff to meet the development needs of the cement industry.

6. The Ministry of Science and Technology and the Ministry of Construction shall establish plans to promote scientific and technological activities in the cement production field towards: adopting and applying advanced world technologies and techniques, enhancing the capabilities and equipment of research institutions, receiving and transferring technology; applying thermal energy recovery technology to produce electricity in cement plants; researching and applying technology to process and utilize waste as raw materials, fuels, and additives for cement to achieve initial results in utilizing waste as fuel by 2007.

7. The Vietnam Cement Corporation shall implement the approved restructuring program for member enterprises; complete the proposal to operate under the holding company model to form the Vietnam Cement Industry Group, continuing to play a leading role in stabilizing the national cement market.

Article 3. Provincial People's Committees shall establish local building materials development planning consistent with the cement industry development planning; coordinate with the Ministry of Construction to direct the implementation of cement project investments on their territory according to current project investment management regulations and the provisions of this Decision.

Article 4. This Decision replaces Decision No. 164/2002/QĐ-TTg dated November 18, 2002, issued by the Prime Minister, and shall take effect fifteen days from the date of publication in the Official Gazette.

Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairpersons of provincial and centrally-administered city People's Committees, and the Vietnam Cement Corporation are responsible for implementing this Decision./.