Quyết định 1488/QD-TTg

DECISION

RATIFYING THE CEMENT INDUSTRY DEVELOPMENT PLAN IN VIETNAM FOR THE PERIOD 2011 - 2020 WITH VISION TO 2030

THE PRIME MINISTER

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

Pursuant to the Law on Construction No. 16/2003/QH11 dated November 26, 2003;

Pursuant to the Law on Minerals No. 60/2010/QH12 dated November 17, 2010;

Pursuant to the Government’s Decree No. 92/2006/ND-CP dated September 7, 2006 on preparing, ratifying and managing the general socio-economic development plan;

Pursuant to the Government’s Decree No. 124/2007/ND-CP dated July 31, 2007 on management of building materials;

After considering the request of the Minister of Construction,

HEREBY DECIDES

Article 1. To ratify the cement industry development plan in Vietnam for the period 2011 - 2020 with vision to 2030 with the following main contents:

1. Development viewpoints

a) Investment:

Invest in the sustainable development of the cement industry, make a significant contribution to the socio-economic development, promote rational use of natural resources, protect ecological environment, cultural relics, historical remnants, scenery as well as ensure national security and defence. Prioritize cement projects to be executed in Southern provinces, cement facility expansion projects; high capacity, modern technology, material and energy efficiency projects. Cement projects that belong to the list of investment projects enclosed in this Decision shall only be allowed for investment and development in terms of construction of cement grinding facilities with the manufacturing capacity corresponding to that of clinker combustion chambers. Investment in development of independent or separate cement grinding stations shall not be allowed either.

b) Technology:

- Apply advanced technologies with the high level of mechanization, high material and energy efficiency during the manufacturing process. Select proper equipment in order to ensure stable production, high quality products, reasonable cost prices and promote the competitiveness under regional and international economic integration conditions. Invest in the synchronization of facilities and systems by making best use of thermal emissions for power generation purposes, specifically as follows:

+ New cement investment projects (entering into the contract for supply of equipment from the date of this Decision's entry into force) with the capacity of combustion chamber equal to 2,500 tonnes of clinker/day or more must be immediately equipped with systems and equipment that help utilize thermal emissions for power generation purposes, except for cement production lines powered by industrial wastes and sewage; with regard to currently operating cement plants and cement projects which are already underway but have had the contract for supply of equipment before the date of this Decision’s entry into force, they are required to have such investment activity completed by 2015.

+ As for cement plants with the capacity of below 2,500 tonnes of clinker/day, investment in system and equipment utilizing thermal emissions for power generation purposes should be studied and encouraged.

- Promote investment in technologies applied to cement production in association with treatment and utilization of industrial waste and sewage (even medical wastes) used as fuels for energy conservation and environmental protection purposes.

- By the end of 2015, complete transformation of cement production technology from vertical shaft kilns to rotary kilns.

c) Production capacity:

Develop cement plants with high capacity and new investment projects with the minimum capacity of 2,500 tonnes of clinker/day. As for projects located at remote and underprivileged areas and projects for transformation from vertical cement shaft kilns to rotary cement kilns, the proper production capacity should be chosen.

Encourage the foundation of large cement production complexes derived from existing projects by taking appropriate forms.

d) Planned development zone:

Prioritize investments in cement projects located in Southern provinces and areas which are rich in raw materials, have favorable conditions for industrial development and meet rigorous standards for transport infrastructure.

Restrict investments in cement projects located at areas short of materials, or those causing negative impacts on cultural relics and tourism development.

2. Development objectives:

Orientate Vietnam's cement industry towards industrialization, modernization and sustainability with application of advanced technologies and manufacture of products that meet quality standards, market demands; save energy, materials and fuels; protect environment and scenery.

3. Planned criteria:

a) Raw materials:

Sources of materials used by cement projects must be defined in the scheme for exploring, extracting and using minerals as cement products and have resource reserve that can ensure continuous manufacture for the period of at least 30 years.

Material sources must be used in absolutely economical and effective manners by employing the following methods: mineral exploitation, at-depth mining, or mineral extraction by applying tunnel boring technology; set up the plan for rehabilitation of completed mine areas and for scenery and environmental protection.

b) Technical criteria:

Cement plants must conform to technological requirements and reach high levels of mechanization and automation; have low labor costs; consume less electric energy and fuels; discharge small amount of dusts and economize on fuels.

Several criteria are specified as follows:

- Thermal energy consumption: ≤ 730 Kcal/kg clinker;

- Electric energy consumption: ≤ 90 Kwh/tonne of cement;

- Discharged dust volume: ≤ 30 mg/Nm³.

c) Project owner’s eligibility requirement:

- Demonstrate financial competence (minimum percentage of the owner's equity required to equal 20% of investment outlay), and set up the machinery for commencing and executing projects on schedule.

- Strictly and sufficiently comply with general regulations and project requirements according to the approved plan.

- Prepare annual project progress reports for submission to the provincial People’s Committee and the Ministry of Construction.

d) Project’s demands and list of projects:

- Forecast of demands:

- The list of cement projects planned for operation for the period 2011 - 2015 and those planned for investment from 2016 to 2030 shall be specified in the Appendix I enclosed herein.

4. Solutions:

Call for the coherent cooperation between production and consumption as well as between industries or sectors, including mechanical engineering, transportation, natural resource, science and technology, education and training, and infrastructure development, etc. in order to meet demand for cement industry development and also encourage other industry development.

Enhance domestic mechanical engineering capability in order to meet the demand for cement industry development on time. In the meantime, manufacture non-standard equipment, components and spare parts to meet the demand for repair, reduce import rate and move towards researches to design synchronous devices used for cement production lines.

Allocate science and research budget in an appropriate manner to finance the work of research, design and pilot production of new equipment, rotary-kiln cement production line, appliances and spare parts; establish policies to stimulate domestic enterprises to manufacture equipment as replacement for importing goods.

Article 2. Implementation

1. The Ministry of Construction:

- Announce, disseminate and organize activities to implement and inspect the implementation of the plan approved by the Prime Minister;

- Annually, based on the current status of economy, society, market supply - demand, actual project execution according to the stated plan, send reports and proposals to the Prime Minister to request his consideration and decision regarding regulatory and policy system, solutions to demand stimulus, market stabilization; amend and supplement the list of projects that ensure the feasibility and sustainable development of cement industry; review and adjust the progress of projects specified in the approved plan in order to balance the demand and supply.

- Preside over, cooperate with the Ministry of Natural Resources and Environment in conformity with requirements regarding environmental issues that may arise from the manufacture of cement, restriction on negative impacts on scenery and ecological environment; suggest approaches to rational use of land and mineral resources;

- Preside over, cooperate with the Ministry of Science and Technology and the Ministry of Natural Resources and Environment in conducting researches that assist in establishment of the product quality system in accordance with the international standard; issue limits on raw materials, environmental standards and regulations; check requirements regarding technologies applied to cement projects which ensure environmental protection;

- Preside over, review the scheme for exploring, extracting and using minerals as cement products before reporting to the Prime Minister to apply for his approval of possible amendments or modifications; prepare the plan for investigation and research on extraction of material sources to meet requirements for cement industry development;

- Expedite the transformation to vertical shaft kiln cement plants.

2. The Ministry of Natural Resources and Environment:

- Cooperate with the Ministry of Construction in inspection of required criteria regarding environment during cement production and mining activities;

- Grant permissions for mineral activities for projects that have demonstrated their proper progress and manufacturing stage; introduce measures to bind cement material mining companies to apply advanced mining, exploitation techniques and maintain safety and environmental and scenery protection.

3. The Ministry of Industry and Trade:

Preside over and cooperate with the Ministry of Construction and relevant Ministries or industries in directing execution of mechanical engineering programs in order to study, design and invent appliances, spare parts and non-standard equipment used in cement production lines.

4. The Ministry of Transport:

- Review, adjust and plan implementation of the proper transport plan at cement plant-populated areas, even including road, rail and waterway transport, clinker and cement product handling ports;

- Preside over and cooperate with the Ministry of Construction in using cement products in these projects for building roads; prepare and introduce, within its jurisdiction, or request competent authorities to introduce technical standards for cement concrete roads which are applicable to national, provincial and express highway projects.

5. The Ministry of Education and Training:

Set up the plan to train workforce classified by majors: silicate, building material, building material mechanical engineering and automation to meet the demand for development of cement industry and others.

6. The Ministry of Science and Technology:

- Cooperate with Ministries such as the Ministry of Construction and the Ministry of Industry and Trade in developing science and research projects in the field of cement production by sticking to the principle of raw material and fuel efficiency, waste utilization and environmental protection;

- Collaborate with the Ministry of Construction in studying any modification and improvement of cement standards (11^th revised version) in conformity with development requirements.

7. The Ministry of Planning and Investment:

Research and propose regulatory systems to assist the development of cement industry.

8. The Ministry of Finance:

- Ponder over the introduction within its jurisdiction, or request the introduction of regulatory system regarding tax for the purpose of natural and mineral resource administration;

- Request the Government’s approval of encouragement and incentive policies on corporate credit and income tax imposed on cement plants when allowing investment in equipment that help utilize thermal emissions for power generation purposes and use industrial wastes and sewage as fuels for cement production.

9. The State Bank of Vietnam:

Direct commercial banks to consider arranging loans to finance cement projects specified in the approved plan and ensure capital of the project owner account for 20% of investment outlay of specific projects; not to consider cement projects that fall outside of the plan.

10. Vietnam National Cement Association:

Synthesize and put forward solutions, policies relating to technology, environmental protection and trade, etc. to competent authorities in order to develop the cement industry to meet predetermined goals and objectives.

11. Vietnam Cement Industry Corporation:

- Play a key role in stabilizing cement production and consumption across the nation;

- Take urgent measures ordered by the Government to stabilize nationwide cement market.

12. The People’s Committee of centrally-affiliated cities and provinces:

- Direct competent affiliated authorities to rigorously carry out administration and execution of cement investment projects throughout localities in accordance with the approved plan, including the following contents: grant of Investment certificates, land allotment, land expropriation, compensation and site clearance, and residential resettlement according to the specified project progress, legal regulations, and follow other legal procedures regarding investment in cement projects according to the approved plan;

- Upon approving new local cement investment projects to be executed, apply for written consents from specialized Ministries (the Ministry of Construction);

- Cooperate with the Ministry of Construction in directing the work of commencing and executing cement projects located within their local areas according to contents stipulated by this Decision.

Article 3. This Decision shall enter into force from the signature date and replace the Prime Minister’s Decision No. 108/2005/QD-TTg dated May 16, 2005.

Ministers, Heads of Ministry-level agencies, Heads of Government agencies, and Presidents of the People’s Committees of centrally-affiliated cities and provinces, and Heads of relevant agencies, shall be held responsible for implementing this Decision.

APPENDIX I

LIST OF PROPOSED CEMENT INVESTMENT PROJECTS FOR THE PERIOD 2011 - 2030 (Issued together with the Prime Minister’s Decision No. 1488/QD-TTg dated August 29, 2011)

Note:

(1) The Project Owner in this chart is just tentative, except for those who have been designated by competent authorities.

(2) The specific progress of projects planned for investment for the period 2016 - 2030 will be adjusted as per the current state of project execution.

APPENDIX II

LIST OF EXISTING ROTARY-KILN CEMENT PRODUCTION LINES UPDATED AS OF DECEMBER 31, 2010 (Issued together with the Prime Minister’s Decision No. 1488/QD-TTg dated August 29, 2011)

Note: Total designed capacity of rotary-kiln cement plants is expected to reach 3 million of tonnes by 2010. Cement production lines, such as Huu Nghi 1, 2 and 3, will be replaced by Yen Mao project given in Appendix I.