Salt Production Still Facing Demand - Supply Imbalance

Without timely and strong measures, salt production may face a serious imbalance in demand and supply. This is the warning of Mr Nguyen Gia Hung, a leading expert and former Director General of the Salt Corporation. In 2006, salt demand of Vietnam was 1.1 million tonnes.

In fact, salt production growth in the past 10 years was only 25 per cent, while the demand in 2020 will grow at 270 per cent, posing a real challenge to the salt sector.

 

Industrial salt demand for the production of soda, potash and chloride in 2010 is expected at 810,800 tonnes. Meanwhile, demand for soda in 2015 will be 465,000 tonnes and will require 744,000 tonnes of salt. By 2020, soda demand will be 380,000 tonnes, and require 608,000 tonnes of industrial salt. As a result, 1,352,000 tonnes of salt is needed each year for the two products. Furthermore, according to Ministry of Agriculture and Rural Development, by 2010 there will be 40 millions head of livestock requiring 250,000 tonnes of salt for animal feed. To meet the demand, some additional 90,000 tonnes of salt is needed each year. If each tonne of salt requires an investment of VND1 million a year, total required investment will be VND90 billion. Slow growth in salt production is due to the shortage of investment capital. So far, it depends mainly on State-owned enterprises, with limited working capital, enterprises are not ready for further investment. Therefore, according to Mr Hung, privatization of salt production will help solve the issue.

 

According to the government, in 2007 all State-owned enterprises of the salt sector, including the Salt Corporation, will be equitized. However, statistics of the Ministry of Agriculture and Rural Development show there are some 80 enterprises producing salt for domestic consumption and export. Among them 29 enterprises, with output of 5,000-15,000 tonnes a year, operate home-made production lines.

 

Experts believe the best solution is to mobilize capital from all economic sectors, at home and abroad. In fact, some private enterprises have invested in the sector such as Thong Thuan private company in Vinh Hao, Binh Thuan, investing VND38 billion on an area of 255 hectares and already starting production in 2007; and Ha Long Co. Ltd investing VND230 billion on 2,500 hectares in Quan The, Ninh Thuan.

 

Mr Hung added that the salt sector must make the best use of natural conditions to increase productivity, modernize production, and ensure better incomes and low production cost.