Tightened credit wrecks toll on construction sector

In Ho Chi Minh City, construction material manufacturers and retailers are suffering from low sale as a result of a credit-starved real estate market.
Bui Hoang Trieu, Director of Minh Khoa Construction Company, said the troubling economy and the government’s policy that restricts credit to the real estate sector was affecting the building material industry.

The owner of a building material store in District 10 said so far her sale had slumped by 30 percent in four consecutive months compared to the same period last year.

She said she had never seen such prolonged recession like this year and hadn’t been able to sell the products stockpiled since April.

M.V.T, a cement distributor, said he had managed to sell only 1 ton of cement a day, down by 50 percent compared to the same period last year.

For their parts, construction material manufacturers said the frozen real estate market had also affecting their businesses badly.

Vietnam Cement Industry Corporation, or Vicem, said cement consumption recorded in July dropped 10 percent month-on-month to 320,000 tons.

As of the end of July, Vicem achieved only 50 percent of its annual target with 9.6 million of tons of cement consumed. Its stockpile also reached a record high of 1.62 million tons.

Meanwhile, the Vietnam Steel Association said the steel sector also incurred a large stockpile of 930,000 tons in July, up by 28 percent compared to the same period last year.

Dinh Quang Huy, Chairman of the Vietnam Building Ceramic Association (VIBCA), also said there are now 30 million square meters of tile bricks stockpiled at all VIBCA’s member companies.

Tran Van Huynh, Chairman of the Vietnam Association for Building Materials, said a Ha Nam-based company also keeping 12,000 cube meters of lightweight concrete in its warehouse even though its annual production is only 100,000 cube meters.
Tuoi Tre

Tags: Vietnam Construction, Vietnam construction sector