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Building a future on hope
Foreign investors are bravely backing Vietnam’s construction sector in the hope a recovery is imminent.
Japan’s Toto Group, a well-known sanitary ware maker, has recently expressed interest in building a manufacturing factory in central Quang Nam province in order to expand its production in Vietnam, according to Quang Nam Provincial Investment Promotion Centre.
The details of this investment plan have not been revealed, but the authority announced that Toto wanted to expand production in Vietnam to serve both local and foreign markets.
Lixil, another Japanese firm, broke ground late last year on its $441 million factory in southern Dong Nai province, which is expected to be operational by November 2013. The company now owns and runs 11 factories in Vietnam, and just last month it revealed a plan to build one more in Binh Duong.
The investment expansion of both Toto and Lixil is in stark contrast to the downward trend of Vietnam’s construction sector that has been so seriously impacted by the domestic economic slump.
However, in line with Thailand’s SCG acquisition of Prime Group, the expansions indicate that foreign investors are still optimistic about the growth of the Vietnamese market in the long term.
Toshimasa Iue, president of Lixil Group, in a visit to Binh Duong last month, underlined that the Vietnamese market retained its future potential, a major reason for the firm’s desire to continue building factories in the country.
“Vietnam is a very potential market of construction materials,” said Nguyen Van Nghia, deputy general director of Prime Group. “Certainly, it will attract a lot of foreign companies. The industry is growing fast and is more competitive than ever. The economy is recovering and is expected to be fully recovered in the next few years.”
Prime Group was previously the largest domestic private building material maker in Vietnam, accounting for approximately 20 per cent of the market.
With SCG taking over 85 per cent of shareholdings in Prime Group in April this year, Nghia affirmed that the Prime Group’s strategy remained unchanged.
“We are focusing on the domestic market and plan to gain more market share by launching new products, improving our product and service quality and increasing capacity. Due to our synergy with SCG, we can supply a greater product variety to explore and serve a greater number of market segments,” said Nghia.
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