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Construction material sales slow
The construction materials market remained quiet despite hopes from producers and traders that the sales volume would surge, as demand has been known to increase late in the year.
Pham Sy Liem, vice president of the Viet Nam Federation of Construction Associations, said that demand for construction materials often rose sharply at year's end. However, the same trend should not be expected to continue in the wake of spending cuts, monetary tightening and high lending interest rates.
Individuals in the business said that 2011 has been an extremely difficult year for them, as demand declined consistently.
The owner of a construction materials store in the capital's Hoai Duc District - where many construction projects are being implemented - said that sales from her outlet and many others had decreased this year and had been especially low since May.
Nguyen Vui, head of the Vinh Cuu trading company, said that purchasing power in the market had decreased since early this year and would continue to be slow at least until next year.
It was reported that steel, cement, construction glass and tile producers are now overstocked due to the decreasing demand in the domestic market.
Vice chairman of the Viet Nam Steel Association Nguyen Tien Nghi said that steel consumption in the first nine months of the year was low, forcing many producers to stockpile about 350,000 tonnes and running at only half of their designed capacity.
The situation was even worse for cement producers, as their consumption this year was only a tenth of the previous year's. Most of them have had to cut production to avoid accumulating a burdensome inventory. According to a Ministry of Industry and Trade report, stockpiles at State-owned cement conglomerate Vicem's member firms reached 2.34 million tonnes in the first nine months of 2011.
The latest statistics show that around 35 million tonnes of cement were consumed as of September 30, 2011, while the industry's total output is estimated at roughly 60 million tonnes this year.
Ceramic and porcelain producers have found themselves in a similar situation.
Vu Quoc Hung, general secretary of the Viet Nam Construction Porcelain and Ceramic Association, said that most of the producers in his constituency were operating at half of their designed capacity. Many of them had accumulated a stockpile of up to 800,000 sq.m in the first nine months.
Hung said that the growth rate of the industry in the first nine months this year was only 1-2 per cent as compared to a rate of more than 10 per cent in previous years.
Industry insiders were concerned that if there was no Government intervention, many construction material producers would have to close their doors due to losses.
vetnamnews
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