Building materials sector in a jam
Building materials sector in a jam
Despite approaching the year-end months typically considered the peak time for construction projects, the domestic building material market currently finds itself in a gloomy situation.
A report from the Viet Nam Building Materials Association showed that in the first 10 months of the year, inventories of unsold ceramics rose by 20 per cent.
The ceramic tile sector recorded an inventory of 40 million sq.m, equivalent to VND3 trillion (US$142.8 million). Roughly half of ceramic tile factories had to halt their production as a result.
The glass industry also saw difficulties as four float glass plants produced 273,000 tonnes while domestic consumption was just 191,000 tonnes.
The cement sector also saw a shortfall, as it was expected to produce 65 million tonnes this year, while domestic consumption was estimated to hit 48 million and exports 8 million tonnes.
Statistics from the steel industry showed the sector planned to increase productivity of 3-4 per cent this year, but in reality, its surplus inventory reached 300,000 tonnes. Adding to the woes, forecasts expect steel consumption in the year-end months to be much lower than that of previous years.
Chairman of the Viet Nam Building Materials Association Tran Van Huynh said the the high inventories are due to the economic slowdown as well as Government policies to cut public investment. In addition, increasing prices of raw materials and high interest rates have prevented businesses from accessing loans.
Huynh said domestic producers are also battling imported products which cause consumption to fall and inventories to rise.
He said the association has proposed the Government reduces interest rates, extends debts and takes measures to increase building demand.
He added that the Government should adopt policies to encourage building projects using domestically-produced products, possibly by putting a limit on imports.
In addition, the sector should expand promotion campaigns to foreign markets in a bid to further reduce inventories, he said
vietnamnews
