SCG expects rise in sales from office in Vietnam

SCG expects its first dedicated showroom that opened in Hanoi last week to help boost its building materials sales in Vietnam by 35 percent to Bt420 million this year.

“Vietnam is always our strategic market that we give priority to develop to become a sustainable business leader in Asean,” said Sattawat Thitaram, country director for SCG Building Materials.

After SCG and Cotto were set as master brands last year, this flagship showroom would be the next step of the group to tap into the high-end market, he said. The SCG brand represents the group’s construction and building materials, while Cotto is for sanitaryware, faucets and shower products, as it entered into this market 20 years ago.

The group’s strategy for Vietnam, consisting of brand-building, innovation offering and total building solution displaying, should be successful as lifestyles are similar to those in Thailand especially for building materials, he said. About 5-10 percent of sales is earmarked for brand-building.

Although the property market in Vietnam has seen a bubble, there is still high potential for building materials in the premium segment, which SCG has focused on. Most customers are concerned about product quality more than price. The Vietnamese economy is expected to grow by 7 percent this year.

The lower end represents more than half of the overall market by volume and homes built by owners outnumber those built by developers.

However, inflationary pressure in Vietnam might force its government to tighten monetary policy by raising interest rates. This might squeeze the purchasing power of prospective buyers who want to build or renovate their homes. Mortgage loans now charge 16-17 percent annually with an average 10-year term.

Out of SCG’s roofing products sold in Vietnam, about 60 percent are imported from Thailand and 40 percent are sourced from its local production base.

The group has tried to reduce its dependence on imports as it plans to widen the range of building materials manufactured at its plant in Vietnam.

Located on Troung Chinh Street, the SCG Building Material Showroom is a three-storey structure with total space of 660 square metres. Besides displaying total building solutions, it provides SCG product information, technical data and consulting services to architects, designers, developers and homeowners.

HCM City in the near future would get the second showroom with about the same space. Within five years, the group targets to have a strong distribution network with more than 50 authorised dealers nationwide, up from 37 dealers currently.

“In 2015, SCG expects to become an Asean market leader with Bt1 billion in sales annually from the building materials business in Vietnam,” he added.

http://www.nationmultimedia.com/2011/03/14/business/SCG-expects-rise-in-sales-from-office-in-Vietnam-30150798.html

[-By Sasithorn Ongdee]

Tags: Vietnam business, Vietnam companies, Vietnam enterprises