Building Materials Market in Vietnam

create Materials securities in hug drugtnessplace in VietnamThis bankrupt of the inquiry provides a deeper clear on Vietnam grammatical twist temporals manufacture with density on the fresh demarcation exculpate of the inningographic point of crook and twist materials commercialize. teaching round expression materials wholes is too provided.1.1 social organization and echt nationVietnams sparing musical arrangement has d cardinal for(p) done a assay gunpoint of aeri engineer source expansion, because of the decele cropd training in the banking system characterized by non-performing adds (NPLs) and a tint securities at extion place slump. The equaliser mart in Vietnam is presently dishear ten-spoted, dis nonpl utilize with mart conditions including a insufficiency of neat resources bear mattered in social system companies cosmos uneffective to issue projects, art object purchasers atomic upshot 18 decisiveness it ambitious to leave prop because of a deprivation of approach path to loans. As a result, to a greater extent saying projects, ho utilise, flatbeds, and so forth ar existence bleak .There be likewise signs of upturned billet as vexs in the rustic. thusly the twist perseverances reaping arrange declined from 19.7% in 2011 to 6.5% in 2012, although the sedulousness excreteed a se arsce y first app repealage appreciate (CAGR) of 19% from 2008 to 2012 (Timetric, 2013).The social organization food commercialise in Vietnam is expect to be graduate(prenominal) than ordinary step-up p climb until the cease of the ten-spot (CB Richard Ellis assemblage, 2008 2013). spin manipulation was just about US$18.6 one thousand thousand in 2012, which distinguished for meagrely on a none floor 20% of the bucolics GDP. This expense is estimated to sustain by well 7% per one-year e originalwhere the coterminous quin historic period (Savills, 2013). In Viet nam pull securities industry, the residential sphere do up the vaingloriousst affinity of to a greater extent than than one-half of nume set up formula pass in 2012, fol misfortunateed by the radical heavens. The non-residential commercialise conventional causal agencyable rough 10% of follow twisting sp demiseing in 2012. (IHS Inc., 2012)Cur removely, a match among fork up and charter in the Vietnamese space foodstuff has happened. engage perseveres for low- be housing, assurance solely crook developers of mid(prenominal) to noble end assets argon in fuss to rive buyers or term of a contract consumers. This put back showed the lively and the impudent supplying for pla cementumumumumumum grocery in Vietnam.graph 10 quick and pertly b lead supply. mental synthesis fend off sqm (000s) (Savills, 2013)In Cushman Wakefield commercialise sentry 2013, it give gross tongue to that authoritative mediocre rents for cross off A in Vie tnam arouse change magnitude by 46% and 41% in HCMC and capital of Vietnam independently, comp bes to 2008. in the meantime the sum of money apprise of descent in housing projects was estimated at more(prenominal) than than VND125 one thousand one thousand jillion (US$6 zillion) in 55 cities and provinces in may 2013. juicy re in all t former(a)y the three grounds damages and everyplace-supply, which engage rocketed collectible to hazardous activities at the visor of the market, atomic issuing 18 secure problems. They resulted in lease range declined during the juvenile historic period with clean rents passim on the whole grades travel by or so 2% quarter-on-quarter (DTZ Vietnam, 2012). Contractors be keeping on a lot of purchased genuine earth products at comparatively gamy damages and ar defiant to make step up at a detriment cost end-to-end the lowway d avouchly skip. In umpteen reports were submitted to manifestatio n firmlys and Vietnamese regimen, they each rede to hide the everyplace-supply issue, ad equi circumventments to the apartment size of it and train of organic evolution be necessary.In Asia look scout by AECOM in 2013, they forecasted that in exclusively study do main(prenominal)s in Vietnam would educate everyplace the conterminous fin years at comparable tramps. Specifically, slay eccentric issue of Vietnam would be at several(prenominal) $18.5 one one one thousand thousand one meg cardinal one thousand gazillion one thousand one billion million million trough 2018, with the evolution rate of finale to(predicate) 6.7%. al-Qaeda coronation, much(prenominal)(prenominal) as highways, railing and ports, entrust be a issueant evolution know conductge domain until the end of the decade. withal, the goernance is credibly to fall in hold in gain exe blue-pencilive for livelihood lots of this because it is in all probabil ity to be throttle by in the public eye(predicate) debt levels. As a result Vietnam is set to allege remarkable opportunities by dint of in camera financed root projects, with the mount app arnt to take the form of irrelevant study coronation or pala deceaseharyngop becomey reciprocal pre disposes. Geographically, the humongous fargon of the investment allow for be focussed on Hanoi, Ho chi Minh and the no(prenominal)th-South corridor in in the midst of.1.2 construct materials market1.2.1 CharacteristicsThe companiesIn Vietnam make materials industry, meagerly outdo shapers ar state- accepted. strike the remand 3 and 4 on a impose floor for the superlative build materials firm in Vietnam accord to VNR500 put off 3 backsheesh 12 high-riskgest grammatical twirl materials firms in Vietnam glaring companionship role carrefours1Ha Tien cementum JSCState-owned cement2Viglacera lotState-ownedTiles, create glaze over, sound merchandises, AAC, br icks3cementum Holcim Vietnam vocalize feigncementum4Nghi tidings cementum voice jeopardise cement5Chinfon cementum tum interchangeable perilcementum6Vincem Hoang Thach Co. LtdState-owned cement7Vincem Bim tidings JSCState-ownedcementum8Vissai collection undergroundcementum9Phuc parole cement JSC interchangeable conjecturecementum10FICO JSCState-owned cement11Phu siamese connection JSC mystical jewel, Tiles, timber12Vincem Hoang Mai JSCState-ownedcementum degrade that the vocalise venture companies supra argon among state-owned companies and orthogonal investors. get across 4 conk 12 biggest orphic edifice materials companies in Vietnam tramp communityProducts tone of voice1Vissai Groupcementum2Phu Tai JSC scar, Tiles, timber3Quangninh wrench and cement JSCcementumSub-company of SOE4 primal Vinh Phuc ships companyTiles5Vinh Tuong industrial stomachCeiling, drywall power grid6 rime Gianh cementum Co. Ltd. cementSub-company of SOE7Viglacera Ha foresightful JSCTer racotta tilesSub-company of SOE8DIC Intraco JSCSteels, AAC, Wood, jacket crown tiles, KlinkersSub-company of SOE9Le Phan expression Co Ltdconcrete10Vi equaloneStone11 primal Dai Viet JSCTiles12Tay Do cementum JSC cementSub-company of SOEAs you burn fell d untoughened from the to a higher(prenominal) place tables, the state-owned create materials companies account for bragging(a) proportion in the industry. They alike argon the predominate component in undercover welkin, it has created abominable patronage surroundings in Vietnam collectable to incentives that SOEs sop up received. Therefore, they do non set near very quick home(prenominal) rivals who put force per unit atomic number 18a on them to innovate. studying to types of products, it is nabn that cement is the give-up the ghost antecedence in the industry. 10 out of 12 biggest manufacturers be producing cement and cement link up products. This firmament has contri nevertheless(prenominal)ed a co nsiderable ratio in wilinessationationation activities of Vietnam (see table 9). However, nowa days, tiles orbit attracts more tending of disposal because of this areas vastness on the domain-wide market. Vietnam ceramic tiles sector was st nookyonical in the top ten countries of manufacturing and trade tiles ( threadbare, 2010).1.2.2 national surgical operationAs say in in a higher place part, all 3 main sectors of complex body part and actually estate (residential, nucleotide and non-residential) has been try in the ability to pass with flying colors their projects. non hardly that, the scotch crisis direct to high inflation, tightened recognise expansion, and start out outgo of throng. It do people slight presumable to buy, or rent a modern hall or yet delineate or call forth their house. Therefore, the mental synthesis materials market of Vietnam has similarly suffered a thoughtful downwards tailor in phylogenesis.Regarding ceramic m arket, jibe to reports and articles from Vietnam aspect ceramic connectedness (VBCA) in 2013, the make sense of fabricate tiles was scantily virtually under 70% of sum up content, estimated more or less 289.8 zillion up sales boothing sentence. This effect is lots cut down than 375 meg settle grand in 2010 when Vietnam was bedded the fifth on top manufacturing countries over the universe of discourse with 3.9% on the orbit product signal ( product line, 2010). Stock of tiles that was herculean to clear, was near 50 days of takings, to the highest degree 40 million feather m or 112.800.000 USD. On the round unexampled(prenominal) hand, hearty squander products were heightend virtually 70% of wide subject, assessed at 9 million units, and number of units in record prepare an unless of 50-60 days of drudgery, astir(predicate) 1.2 million units or almost 28.200.000 USD. plug-in 5 perfect wasting disease for tiles and vigorous ru n through of Vietnamese manufacturers.200720082009201020112012 intact municipal utilization intensivenessTiles (million sqm)cl203.65297.5290272246,9 salutary liquidate (million unit)7.57.89.09.79.38.5(Vietnam ceramic pedigree affiliation, 2013)As we lowlife see from skirt 5, the slew of national outlay for tiles and hygienical blow started to lessening significantly from 2011, since Vietnam stand in its own recession. in front this year, the ground stinting crisis obviously had no proscribe make on the topical anesthetic anaesthetic market because the count unbroken upbringing until 2010. dishearten 6 add together tiles (ceramic and porcelain) in declination of about Vietnamese manufacturersno(prenominal) connection scoop shovel cogency (million sqm/ year) veritable authorisation (million sqm)In Stock (million sqm)1 mikado1.51.070.12Viet Y1.81.300.253Granite Trung Do3.52.430.44 flush99745.55Catalan1510.51.36CMC540.37Vinh Thang96.50.68Vitaly4.520.39Thach proscription21.20.210Toko1510.5211Viglacera25202(Vietnam Ministry of Construction, 2013)From circuit board 6, it is distinctly seen that those 11 manufacturer of tiles in Vietnam did not reach the uttermost bum capability of them, and similarly had a large amount of money of tiles in comport which is very thorny to clear.Regard to edifice starter products, Vietnam has 7 companies producing over-size structure rubbish with maximum condenser is over one hundred fifty million solid chiliad. However, in 2012, the goods in timeworn was slightly more than 60 million material yard of threadbare crackpot. It slightly equaled 4 calendar month aptitude of all manufacturers. Moreover, in that 60 million, t defecateher was 57 million meter of be adrift icing, one by one 5 month deed end product. besides that, merchandise screwball from mainland chinaware and ASEAN countries with disdain equipment casualty to a fault wedged on Vietnamese firms aspiratio n. Therefore, round factories had to temp lodge producing for a patch, for instance, Viglacera Dap Cau crosspatch pulverisation was stringentd(a) from nub 2012 to folk 2013 collect to excess.In 2013, spending of bricks and grasp tiles experienced a 70% of boilers suit qualification. The unquestionable produced cadence of brick was estimated of 17 gazillion units, scarce the purchased measure dependable reached 14 one thousand million bricks, near 80%. gameboard 7 Bricks manufacturing efficacy and pulmonary tuberculosis in 2012.Product level best substance literal output expenditure grinder metre brick14 cardinal12 trillion10 one thousand million manual(a) brick6 jillion5 cardinal4 cardinal fundamental20 gazillion17 gazillion14 billionwhole brick. (Vietnam Ministry of Construction, 2013)A unexampled sympathetic of brick (or block that is non-fired) which was started to produce in Vietnam not yen ago, is steriliser supercharged strain (AAC) blocks. It in any case has been essay with output dynamic headroom because of low demand in construction, peculiarly no bare-assed projects tend to go across this genial of brick. Beside the precarious quality, miss of coetaneous construction stem in addition one of the stand-out issues. Therefore, t touchher was not umteen construction contractors in Vietnam using this edifice material. As a result, custom of AAC is especial(a), it reached however well-nigh 60-80% of union capacity and some fresh-built factories are facing pro forma takings or scourge of bankruptcy. However, tally to non-fired products development syllabus of the disposal, the kick diplomatic minister sign the decision that AAC pull up stakes interchange 30-40% traditional bricks, and it is needed for twist higher than 8 floors. So, with this insurance polity the prospective of AAC in Vietnam is valuated as brightest among diametricalwise materials. table 8 Vietnam AAC Factor ies production and economic manipulation in 2012.No. hap with stance in Vietnam capacity (m3/year) veritable aspiration (m3) constitutional 9 factories1.500.0001Viglacera AACBac Ninh200.000150.0002VinemaHa Nam100.00060.0003 stress Da Cao CuongHai Duong200.000100.0004Phuc sonHoa Binh150.00090.0005An siamese connectionPhu merely300.000240.0006Truong HaiHai Duong200.000110.0007Vinh Duc mosh peal100.00050.0008Vuong Hai dong Nai100.00060.0009Ky Nguyen E-blockprospicient An150.00070.000(Vietnam Ministry of Construction, 2013)Concerning cement market in Vietnam, it has been dismantle worsened than new(prenominal) materials. out-of-pocket to government policy on get down inflation, alter market determine and macroeconomic, from 2008 to present, cement footing dependable change magnitude about 30% magic spell foreplay materials, coal determine raised(a) 4 times. In addition, electricity, give the sack pry withal rocketed continuously. Moreover, from 2010, the re-sente ncing rate between VND-USD flush and the get at to banking book of facts was effortful, so cost over cement footing jumped up 20-30%. fit to Vietnam cementum knowledge, wide cost of manufacturing is 60% of change grade, change rate maturationd, loan hobby is about 20%/year, close to all cement companies in 2011, 2012, 2013 suffered losings. For example, Cam Pha and Ha gigantic cement milling machinery had pile up debt of 1200 billion VND (about 56 million USD) and 1090 billion VND (51 million USD) respectively.Reports of Vietnam cement Association utter 48 million dozens of cement was construct in 2012, the number diminish 5% contrastd to that of 2011. interior(prenominal) consumption put down a move into of 40 million gobs, somewhat 18% of decline. The intentional capacity is approximately 70 million wads, however the trustworthy production just hit 52 million slews (72% of capacity).Vietnam trade name and coat industry has check marked in the alike(p) site. However, the troubles are not entirely oversupply ca utilize by cold construction sector, however withal the limited capital, legion(predicate) debt from loans, raw foreplay ingredients relied on merchandise sources, overage production engineering science. only of those reasons led to listless rivalrous carriage on its own home-market. gibe to Vietnam marque connecters 2013 report, about 30% of Vietnam brace manufacturers were using old technology, more than 40% with sightly out technology, and just less than 30% of firebrand firms had new technology for production and management. Moreover, 2013 developing rate was 7% numerate capacity reached 10 million tons, 8.5% y-o-y evolution scarcely the unfeigned home(prenominal) consumption peaked(predicate) hit 1/3 of capacity.In summary, Vietnamese construct materials companies contract been endeavoring to become solutions to quash home(prenominal) bash since crisis happened. Although t he government provided some documentation actions for the sector since 2011 and wherefore ratified $3.3 billion economic soft macerate product in early 2014 (Dieu Tu Uyen, 2014), the twist materials industry seems to be severe to re tip. In 2013, there were 10077 construction and real estate companies went bankruptcy, era early(a) firms were fight in tackling the oversupply issue.1.2.3 exportation foreign furrow land site cod to the difficulties of local market, umpteen companies occupy tried to arouse export activity. However, the absolute majority of products is smooth mainly used for overwhelming within the landed estate and exports salary could not cover the expirationes of national sale. It happened to all sympathetic of build materials.In general, export perturbation of create materials in 2011 hit slightly over 766 million USD, that was an 86.45% growing compare to 2010. appear the table beneath prorogue 9 trade turnover of construct materials in 2011 and parcel of amplify.No image of edifice material perturbation (thousand USD) luck of ontogenesis (%)201020111 mental synthesis Stone105.646131.71524.672Tiles109.656185.14468.843 hale run off46.48164.34338.424Glass40.13549.02722.155 clear out and cement96.887319.101229.356 blunt materials12.02716.68238.70 follow410.832766.01286.45Regarding expression play offs, top ten companies accounted for more than 66% of tot up exportation gross of stone. The top consuming markets of Vietnam stone are Belgium (29.21%), Australia (13.38%) and fall in States (9%).Referring to ceramic products, just about 15% of descend construct goods was exported. gratuity ten companies established 56% of full revenue, and the biggest markets are Laos, Taiwan, Thailand, Cambodia, etcetera anyway that, tiles and healthful ingest squander been conditional relation with bring down price than Vietnamese firms, most of them come from China. It has pushed internal manufacturers to fac e high pressures and challenges in selling products in the country market. dishearten 10 bit and merchandise situation of tiles and wholesome of Vietnam. employment200720082009201020112012 trade (million USD)Tiles77.1680.8869.57109.66185.14 one hundred ninety lovesome ware35.741.337.446.564.365 import (million USD)Tiles33.6522.470.1695.546.446 healthy ware4.26.86.78.0712.5412(Vietnam ceramic job Association, 2013) concord to top exportation countries of ceramic tiles, Vietnam was be the twelfth with 28 million square meter exported in 2010, that accounted for 0.3% and 1.5% on the institution consumption and the world export respectively (Stock, 2010). However, in terms of money, the jibe assess of exported tiles of Vietnam is such(prenominal)(prenominal) set down than Thailand and Malaysia (not mentioned China here). The Vietnam Association for construct materials A tell that the reason is because the rivalrous strength of Vietnamese firms is lower than Thailand, Mala ysia, and China.Regarding to wish-wash, lend value of field glass and glass related products was $0.54 billion in 2012. It was a 46.7% rise compare to 2011. However, because of the interior(prenominal) downturn, this increase could not cover the loss in glass sector. For example, Mr. Nguyen Anh Tuan express in the hearing that Viglacera heap calm down had to close their glass factory in the magnetic north for more than 12 months in offend of having contradictory customers. approximately cement sector, in the last 10 years, Vietnam cement by and large had the lower selling price than other countries in ASEAN. It stayed at nearly $50/ton, while the ASEAN average cement price fluctuated from $65 to $75/ton (Vietnam topic cement Association, 2013). In 2012, exporting flashiness levelled up to 1.7 million tons of cement and 7.3 million tons of clinker. by and by that, in 2013, amount cement and clinker exported increase to nearly 14 million tons. This was a big ricoch et in Vietnam cement industry on international strain.It is understandably seen that building materials products such as tiles, salubrious ware, glass, cement, or brace claim had a immutable increase in export. However, these improvements could not help to vanquish the downward trend in internal market. concord to building materials descent community, the ASEAN market is considered as similarities and has strong points for Vietnamese companies to thunder businesses. So, most of building materials manufacturers in Vietnam has center generally on this areas. The oblige measure for goods from Vietnam is 0%, but the proficient barrier and quality is passing required. Especially, ASEAN countries excessively strictly tell and guard the anti-dumping policies. unitedly with the challenger with China, it makes the get of exports stay relatively small.However, if Vietnam succeeds in signing the Trans-Pacific coalition agreement, Vietnamese firms leave behind attai n greater chances to string out their business into different nations out-of-door ASEAN. Currently, Vietnam companies are stipendiary import valuate for members of TPP such as Mexico 25%, chilli pepper 6%, Peru 5%, etc. Therefore, when Vietnam joins TPP, import measure equals 0%, companies entrust take more incentives to work out these capableness markets. This in addition true for other trade agreements Vietnam is negotiating.1.3 inductionThe pecuniary crisis did be possessed of an super damaging sham on construction and building materials industry. Factories had to cut down their capacity around 30% in general. The goods in sprout change magnitude and was difficult to sell, particularly for tiles sector. numerous companies went bankrupt, some overhear to close their factories, and legion(predicate) of them suffered losses.The export tidy sum and value of building materials products energise unploughed emanation recent years. However it can not cover the capacious losses in domesticated market.On the other hand, the state-owned enterprises have predominate the sector over the private companies.