Companies in the construction sector in the first five months of this
year continued to meet many difficulties, especially in the materials
and real-estate area, said the Ministry of Construction.
The
total business and production value of the construction sector reached
more than 12.6 trillion VND (600 million USD) in May and 57.814 trillion
VND (2.75 billion USD) for the first five months of this year, down 5.4
percent year-on-year.
The results meet 35.9 percent of full year targets, the ministry said.
The
assembly sector’s revenue was 21.25 trillion VND (1 billion USD), down
14.6 percent over the same period last year and 34.2 percent of the
whole year target. Many key projects are still behind schedule,
especially those involving electricity.
Meanwhile, the
value of production in the industrial and construction material was 23
trillion VND (1.1 billion USD), a slight increase of 3.9 percent
year-on-year. This was 39 percent of the whole-year target.
The
construction material industry continues to face a difficult time in
domestic and foreign markets, said the chairman of the Vietnam
Construction Materials Association, Tran Van Huynh.
He said
that the industry last year faced an over supply when sales plummeted
because of the inactive property market. He added that most companies
did not operate at full capacity.
“The capacity of cement
companies was 80 percent, the pottery sector was under 70 percent,
construction glass was under 50 percent and some of other sectors only
15 percent,” Huynh said.
In addition, he added, stockpiles of finished goods were at a high level – and coal and power costs have increased.
All
of these obstacles have pushed many companies to bankruptcy and small
companies have to merge with big companies to avoid losses.
“Massive
uncontrolled investment is the main reason causing oversupply,” said
Huynh, adding that many companies still use out-of-date machines that
cannot produce high-quality products with good designs and are harmful
to the environment.
To solve the problem, the association
has suggested re-planning the industry to balance demand and supply,
applying new technologies to improve quality and design of products,
using new materials that can save time and money, and using industrial
waste and strengthening management.
Construction material
production is considered a key industry in Vietnam, contributing 7-8
percent to the national gross domestic product.
Last year,
the industry’s turnover reached about 190 trillion VND (9.05 billion
USD), of which 31 percent was contributed by the cement industry.-VNA