Czech Firm to Build US$400Mln Cement Factory in Bac Kan

Czech Firm to Build US$400Mln Cement Factory in Bac Kan

Czech firm Lamela Group plans to build a US$400 million cement factory in the northern mountainous province of Bac Kan, making it the first foreign company to express an interest in investing in the impoverished province.

Lamela representatives made a fact-finding trip last week to the proposed construction site in the province’s Cho Moi district, where they signed an initial agreement with the local authority regarding their investment plans.

The factory will make the company the second investor from the Czech Republic to set up shop in Vietnam after a US$18 million Bohemia crystal factory in the central province of Quang Binh.

Under the agreement, Lamela will build a cement factory with an annual capacity of 1.2-1.5 million tons in order to satisfy regional demand, said Hung Dung, an official from the Bac Kan Province People’s Committee.

“We are hopeful that Lamela’s investment plan will become reality because the results of the fact-finding trip were very promising. We are waiting for further feedback when they expect to get the project off the ground,” he said.

If it is built, the factory will be the first foreign invested project in Bac Kan, one of the poorest provinces in Vietnam.

“We are hoping to lure more foreign investors to the province with the most attractive incentives,” Dzung said.

Bac Kan has advantages in the tourism and mining industries, but its isolated geographical position and under-developed infrastructure are deterring foreign investors from coming here.

The province’s extensive reserves of limestone - a raw material for cement production - can keep the factory running for the next 100 years, he said.

Bac Kan currently has only one cement-making facility, which has obsolete technology and low output.

The Government recently decided to offer incentives to any firms that build cement plants in remote and highlands areas in a bid to cut back on the high costs of transporting cement from lowland areas.

Industry analysts predicted that Vietnam’s cement demand would reach 6.5 million tons this year.

They also warned that Vietnam would have to import clinker to meet the cement industry’s raw material demands until projects like the one in Bac Kan begin production.

VIR