Nguyen Quang Cung, director of the Department of Building Materials at the Construction Ministry, said 30 new cement plants were being built, in addition to 17 plants that are expanding their capacity to reach a total of 48 million tonnes per year, the Vietnam News Agency reported.

Tran Quang Tuan of Vietnam Cement Corp said the corporation had nearly completed construction of major factories such as the Bim Son plant, a second production facility at the But Son plant, and a third production facility at the Hoang Thach plant.

The Cement Corp's Nguyen Van Diep said Vietnam would have a surplus of clinker, a major ingredient of cement, by 2009.

However, the cement association has warned against the development of too much capacity, noting that supply by 2010 could exceed demand by 12 million tonnes. Exports could provide a solution to redundancy, but competition with Thai and Chinese cement-makers is stiff, said the Vietnam News Agency.

Most of the increased capacity is being developed in the northern region, said association chairman Nguyen Van Thien, which could add high transport costs to serve markets in the south.

Thien advised investors and enterprises in the cement sector to take care when choosing locations for plants.

Meanwhile, the Construction Ministry has asked the prime minister to restrict the spread of investment in cement projects for the time being, especially smaller projects.

Domestic cement consumption in April reached 3.5 million tonnes, an increase of about 900,000 tonnes over March, bringing total consumption in the first four months of the year to 11.8 million tonnes.

The Cement Corp predicted that in the second quarter consumption would continue climbing, with high demand driven by an upswing in construction activity.