With new technologies, the construction material production sector has made great progresses in increasing production volume and product quality over the past five years. Many Vietnamese products have penetrated into foreign markets. However, the sector is presently encountering various difficulties in bringing its production capacity into full play while maintaining its current markets. At a conference hosted by the Ministry of Construction last weekend, delegates agreed that it is time the construction material industry developed a detailed export strategy.
One in 10 for Export
According to the report presented at the conference, Vietnam now has some 230 construction material exporting enterprises, which have 11 export items. Vietnamese exported construction materials have penetrated into many countries around the world, including the US, Japan and Italy. The annual average export growth hit 148 per cent in 2001-2005 and the total export revenues in the five year period are US$279 million. Outstandingly, the export revenue in 2005 has been 4.5 times higher than that in 2001. With its remarkable achievements, the construction material sector is at the spearhead of global integration.
However, the export volume only accounts for 10 per cent of the country’s total production output and is equal to less than one per cent of the world’s total export volume. According to the statistics from the Vietnam Construction Materials Association, the export proportion of Vietnam is much lower than that of regional countries. For example, although tile production in Vietnam is much larger than that of Thailand and Malaysia, the export value of Vietnam is equal to roughly 10 per cent of these two countries.
According to the Department of Construction Materials, Vietnam saw only a small export proportion because exporting enterprises have lacked concrete strategies. Some enterprises even regard export as their secondary choice. As a result, the investment in new technologies and machines remains insufficient. Some others have even exported their products to countries that already have an excess of construction materials. Furthermore, many Vietnamese enterprises haven’t paid due attention to marketing or introducing their products in other countries. For instance, Thach Ban Brick Joint Stock Co. has no independent export department although it has exported its products for decades with an annual export revenue of tens of million of dollars. Its export activity comes under the Sales Department and is conducted by only one staff member, who mainly seeks customers over the internet.
The lack of cooperation between enterprises has led many of them to export the same products to the same markets, and has resulted in unfair competition. In addition, one enterprise alone cannot handle some big contracts involving various kinds of products.
Mr Pham Thinh Lam, deputy director of the Planning and Investment Department under the Ministry of Trade said the high investment level in Vietnam is harming both the construction material export of Vietnam and domestic production, especially now that Vietnam is trying to enter the WTO.
Trebling Exports
According to estimates, over the next five years, the world will need a much larger volume of construction materials for infrastructure projects. As a result, many countries, especially the US, the EU, Japan, South Korea and the Middle East, will import more building materials. The Ministry of Construction said Vietnam has set targets to reach an average annual export growth of 25 per cent in the 2006-2010 period. From 25-30 per cent of total output will be exported. If these targets are fulfilled, the Vietnamese construction material sector will have a strong foothold in the world market and secure stable production.
To realise these aims, cooperation and assistance are crucial. Enterprises must decide which products are strategic exports in order to attract suitable technologies. Enterprises also need to associate with each other to exchange experiences and information in order to fulfil big contracts. The Ministry of Construction is completing a strategy for the export of glass fibre, water pipelines and roofs. This strategy will bring numerous benefits to construction material export firms.
According to General Economic Department under the Ministry of Foreign Affairs, apart from its traditional markets, Vietnamese firms should also pay attention to exporting to Africa and the Middle East. Recently, Vietnam has boosted bilateral ties with South Africa, which provides a solid platform for Vietnamese enterprises to enter other African countries.
Thu Huyen
Vietnamese
