Building materials sector booms

Viet Nam’s building materials industry has experienced rapid growth in recent years, turning it into one of the country’s best-performing manufacturing sectors, according to a report by The Kearny Alliance, an American non-governmental organisation.

Primarily known for its cottage industries like handicrafts, garments and furniture, Viet Nam’s building materials industry has positioned itself to become more involved in heavy industries.

While the global economic turmoil led to a severe slowdown in the construction supply segment among key markets in developed countries, the opposite has been true in developing economies, the report said.

Burgeoning demand from local and foreign buyers, particularly from the Middle East, South Asia and Southeast Asia, encouraged the industry to expand by roughly 15 per cent last year.

Building material exports are expected to increase by as much as 30 per cent over last year, experts and industry insiders have said.

The sector has a local abundance of raw materials, particularly those used for tiles, bricks and floorings.

There are more than 2,000 stone and mineral quarries with estimated reserves of at least 100 million tonnes.

Extensive design capability is the sector’s other major strength since Viet Nam has many craft villages composed chiefly of artisans.

These workers are trained in various carving and detailing techniques that are typically used on wooden items, including doors, windows and flooring.

Product suppliers can readily offer models that are created in-house.

In addition, they can recommend modern styles that incorporate traditional motifs to customers.

The Asia Pacific region is the most vital export destination of the industry.

Among the companies featured in the report, the Asia Pacific region accounts for over half of overseas revenue. Major markets include South Korea, Thailand and Malaysia.

The Middle East has, however, become a significant export destination for local suppliers due to a recent construction boom.

Among the manufacturers interviewed in the report, exports to the Middle East region accounted for 13 per cent last year and were expected to double by the end of this year.

Key markets in the Middle East include Iraq, Israel, Iran, Turkey and the United Arab Emirates (UAE).

Robust exports

According to a survey conducted in the report, most local exporters of building materials are gearing up for robust sales growth this year as overseas demand picks up.

Vu Ngoc Khiem, programme manager of the Kearny Alliance, said the country’s building materials suppliers were confident of seeing export sales surge by at least 10 per cent for the next 12 months.

To lure more buyers, 71 per cent of makers plan to maintain export prices for the next six months, the survey said.

About 25 per cent of suppliers who plan to raise prices will keep increases to within 5 per cent over the next 12-month period.

The country’s abundance of raw material has allowed local exporters to offer more competitive prices, especially compared with rising costs in China, Khiem said.

About 40 per cent of suppliers will produce more decorative designs, with others relying on eco-friendly materials.

Total annual export sales of featured suppliers reached more than US$66 million last year, Khiem said.

They currently employ over 8,000 full-time workers, creating more jobs for the local community.

Tiles and bricks account for half of the total output, while flooring takes up 30 per cent.

The Viet Nam Sourcing Report: Building Materials, issued by the Kearny Alliance, covers profiles of 35 manufacturers, plus descriptions, prices and packaging details for 98 best-selling export products.

These products include tiles, bricks, doors, windows, paneling, framework, flooring and roofing.— VNS

Tags: building materials