Although in the midst of construction season, building materials are facing the danger of surplus and fierce competition by imported products. For more than a year, glass, ceramic tile, wood, cement, steelare in surplussupply.
In face of such danger, Vietnamese building materials still could not find markets for export. In spite of many years of concerted efforts, building materials remain in low export value and represent no statistic figure.
According to Cement Association, in 2009 Vietnam has 105 cement production lines with total designed capacity of over 61 million tonnes and annual output of 50 million tonnes. The consumption in 2009 is estimated at 44-45 million tonnes, with forecast for 2010 of additional 4-5 million tonnes. Therefore, with full capacity, Vietnam can have a surplus of over 10 million tonnes in 2010.
Meanwhile, the statistics of Vietnam Steel Association show that the steel demand in 2009-2010 is some 4 million tonnes, but the present capacity is already 7 million tonnes. Likewise, Vietnam has over 60 tile enterprises with total capacity of nearly 200 million sq. metres a year but the consumption demand is only 150 million sq. metres a year.
Due to the surplus, many enterprises have to find their own way out. They expand markets at home and abroad, apply new measures to reduce production cost. Nevertheless, export remains the most difficult problem because of huge investment and the production cost is 15-20 % higher than the world average. The transport fee is also higher than most of the countries.
Beside outside causes, there are also inside causes pointed out by the enterprises themselves. They are the lack of cooperation and mutual assistance. To compete, several enterprises resorted to massive sales causing losses to Vietnamese businesses in negotiation with foreign partners. For instance, Russia as well as Europe have big demand in cement, many foreign businesses are considering cement import from Vietnam, but the price is unacceptable as it will be a loss if the transport is included.
In purchase of building materials, partners often apply delayed payment. It is another risk. Many African partners have offered cooperation, but as the risk is so high that Vietnamese businesses focus only on domestic market.
According Vietnam Building Materials Association, the total export value of Vietnamese building materials in the past 5 years was less than US$1 billion. As the major part of the export is by FDI enterprises and most of the input are imported, Vietnamese enterprises can get benefit only from contractual work.
As a result, in the first 8 months of 2009, Vietnamese ceramic products with tiles as main products suffered lowest export turnover. In August, it stood at US$18 million, US$1 million less than the previous month. In the first 8 months, it is US#167 million or 27.7 % less than the same period last year.
Recently, the Ministry of Construction has called on concerned enterprises, associations and experts to help promote the export. For their parts, the associations proposed a cessation of licenses for new investments to make to good use of existing enterprises. The Building Materials Association requested the government to negotiate with other countries on reduction of import tax rates and lower transport fees for export products to Europe. However, experts believe that besides support of macro level, dynamism and concerted efforts of the enterprises are most decisive.
Luong Tuan
Vietnamese
