Cheap Chinese building materials ‘knock out’ domestic products

The construction material market is seasonally hot, but it’s low-priced Chinese tiles, lights and bathroom fixtures that are the big sellers, reports Tuoi Tre. Local producers are crying ‘foul.’

Shockingly low prices

According to owners of some shops on Ly Thuong Kiet and To Hien Thanh streets in HCM City that specialize in selling floor and wall tiles (ceramic and granite), the sale of Chinese tiles has increased sharply. One shop owner said he can sell more than 100 square metres of 60×80 cm made-in-China floor tiles a day, while equivalent Vietnamese products have been selling very slowly.

According to VIBCA, in 2009, the total import turnover of tiles of different kinds was $70 million, of which imports from China were valued at $51 million

The Chinese tile is selling well simply because it is much cheaper than either Vietnamese goods or other imported products. For example, China’s 60×60 cm floor facing tile are selling at 180,000-195,000 dong per square metre, while Vietnam-made products are priced at 235,000-250,000 dong per square metre, and the prices of imports from Italy or Germany are 300,000 dong per square meter or more.

20×20 cm ceramic wall tile made in China is priced at 140,000-180,000 dong per square metre, or 100,000 dong cheaper than equivalent made-in-Vietnam products.

Decorative lamps from China are also selling very well. They’re everywhere in the market with diversified designs and attractive colours, from single lamps to chandeliers,products made of plastics, glass and stone. The prices of the lamps are very ‘soft,’ 75,000-150,000 dong per lamp, just half the price of equivalent imports from Italiy, Egypt or Hong Kong, not to mention local lamps.

Bathroom fixtures (tubs, Jacuzzis, faucets, toilets and washbasins …) sourced from China are also available everywhere, bearing prices just 60-70 percent of the prices of equivalent Vietnamese products.

Especially, Chinese wallpaper is eating up market share because it is selling at an amazingly low price of 40,000-60,000 dong per square metre. By contrast, wall paper sourced from South Korea or Switzerland sells for 120,000-150,000 per square metre.

A contractor in District 6 of HCM City said that ninety percent of his clients decide to purchase Chinese products, unable to resist the low prices and attractive designs. The contractor said that Chinese products are inferior to Vietnamese equivalents in quality, but his clients do not seem to care. They imagine they can easily replace defective products. “The overly low prices of the Chinese stuff make people forget about quality,” he said.

The playing field is tilted!

Vo Quoc Thang, Chairman and General Director of Dong Tam Corporation, said bluntly that the problem is that the Chinese products have been smuggled into Vietnam or have evaded proper taxes in some other way. “The Chinese products would not be competitive in price, quality or post sales service if they had to bear the 25 percent tariff and other legitimate expenses,” Thang said.

Thang blames the flood of building materials with no clear origin on lax control by market management agencies.

The Ceramic Building Materials Association (VIBCA) has petitioned the Prime Minister, reporting the difficulties now faced by domestic producers due to the trade fraud and smuggling from China. Importers under-declare the products’ value by 50-70 percent, the petition says, and use other kinds of tricks to evade tax.

A member of VIBCA told Tuoi Tre that the volume of goods smuggled into Vietnam by both land and sea is huge. “The products are of low quality and bear very low sales prices. They have pushed domestic producers against the wall because we cannot compete with them,” he said.

VIBCA has asked the Government to take action against smuggling and tax evasion, saying that the trade fraud must be stopped to protect true local producers.

Tuoi tre

Tags: Chinese building materials, Vietnam Construction