Slow construction industry weighs on materials sales

The building materials market has had a tough time lately due to a downturn in the building industry and increased production.

The Viet Nam Building Material Association said production at factories making cement and ceramic tiles had increased against the same period last year while consumption had reduced.

Nguyen Thi Thuy, owner of Tien Thuy building material shop in Hoang Quoc Viet Street, said sales always fell in the wet season but this year they were down from the beginning of the year and hadn’t recovered.

Pham Thanh Trung, owner of Son Tung shop in Tay Ho Street, Ha Noi, said the shop had a year-on-year reduction of 70 per cent in revenue to VND300 million (US$14,527) in June.

Nguyen Tien Nghi, deputy chairman of the Viet Nam Steel Association, said consumption of steel had fallen to 298,000 tonnes in June and recovered to 359,000 tonnes in July, still much lower than the average consumption of 400,000 tonnes a month.

Sales were not expected to improve before the end of this year due to reduced public investment and expenditure on construction in a period of high inflation, Nghi said.

Consumption of cement in July had also reduced by 360,000 tonnes against June to 3.59 million tonnes, said Le Van Diep, head of the administrative office at the Viet Nam Cement Association.

To promote sales of building materials, producers and retailers had offered large discounts.

Viglacera Ha Long, a building ceramics producer, usually discounted at the end of the year but this year 10-15 per cent was applied since mid-year, Thuy said.

Meanwhile, large steel and cement producers had sought to export their products.

This was a temporary solution because the export value was not high, Diep said.

Exports of clinker and cement reached 2.5 million tonnes in the first half and 133,000 tonnes of steel in the first seven months. — VNS

Tags: Vietnam Construction, Vietnam construction material industry