TaFico seizes the opportunity

TaFico seizes the opportunity

While the consumption of cement in Southern market increases 11% per year on an average, finding of lime bandstone which spreads from Ta Thiet (Binh Phuoc province) to Tan Chau (Tay Ninh province) is a golden opportunity that Fico Tay Ninh Cement Joint Stock Company (TaFico) cannot miss.

According to the specialists, the development potentiality of Vietnam cement market is still promising as cement consumption per capita in Vietnam now is about 390 kgs/person/year, equal to one fourth in comparision with Thailand and one fifth – with Singapore or Malaysia.

In Southern provinces (from Da Nang to Ca Mau), lime stone for clinker production exists only in Kien Luong Dist., Kieng Giang province. As a result of lack of raw materials, cement production capacity of local enterprises meets only 70% of 11 mil tons/year demand. Therefore, when finding lime stone spread from Ta Thiet (Binh Phuoc province) to Tan Chau (Tay Ninh province), in December 2004 Building Materials Corporation No.1 (FICO) decided to establish Fico Tay Ninh Cement Joint Stock Company (TaFico) with investment capital of 3,000 bil VND and build the factory in Tan Chau Dist, Tay Ninh Province with capacity of 1.5 mil tons/year of clinker and cement.

As planning, the first tons of FICO cement will appear in the end of 2008. But in fact, FICO cement already appearred on the market last month as result of a sudden decision of TaFico BOM. It is buying up Phuong Nam Cement Factory (Hiep Phuoc IZ, Nha Be Dist, HCMC) with capacity of 500,000 tons of cement /year at the price of 437 bil VND and renaming it into FICO Cement Factory.

In TaFico development strategy, the company will invest another clinker grinding station near HoChiMinh City. This station will receive clinker from Tay Ninh Factory, grind and pack it then sell the final products in HoChiMinh City – the company’s most important market – and Delta Provinces. Meanwhile, cement manufactured in Tay Ninh will be sold in local market and exported to Cambodia. According to Mr. Tran Phuong Tung – Chairman of TaFico – decision on buying up Phuong Nam Cement Factory helped TaFico shorten 2 years in new grinding station investment plan.

Strategy of new brand name

Along with buying up Phuong Nam Factory, TaFico also has strategy to attract experienced specialists in cement industry. Thanks to these specialists, TaFico can reduce investment rate for Tay Ninh Cement Factory from USD 120.00/ton to USD 90.00/ton.

In the scene of competition with about 30 cement companies in Vietnam market, in order to build up Fico cement as a leading cement brand in 2007, TaFico is now concentrating in 3 major points: invest in high quality cement PCB40 production process; build up enthusiastic and skilled staff; brand name and market development. For market development, TaFico already signed contracts with strategic distribution channels including 30 professional distributors and 10 big concrete stations. Meanwhile, the Company is establishing, consolidating relationship with more than 300 construction companies and about 4,500 shops in HoChiMinh City, Easten and Westen provinces.