Construction material suppliers look towards strong rise in 2022

November 17, 2021 | 09:04
Despite the pandemic-induced economic difficulties, Vietnamese construction material producers have seen a fair share of success, thanks to the efforts of the Vietnam Value Programme and associated agencies and ministries.

Mr. Hoang Minh Chien, Deputy Director of Trade Promotion Department, Ministry of Industry and Trade, Ministry of Industry and Trade, said that after 18 years of implementing the program of voting national brands of seven brands, we have witnessed the continuous growth of many domestic enterprises.

By 2018, this had grown to 97, and this year we have registered 124 businesses and their brands.

At the first selection in 2008, we saw only 30 selected companies with their products. By 2018, this had grown to 97, and this year we have registered 124 businesses and their brands.

For example, the national brand recognized enterprise in 2018 achieved revenue of about 907 trillion VND (39.4 billion USD), export turnover reached 130 trillion VND (5.6 billion USD), contributing 85 trillion VND (3.7 billion USD) to the state budget and created 340,000 jobs.

Vu Ba Phu also said that, the Ministry of Industry and Trade has supported businesses in difficulty. After the first months of the health crisis, the domestic market was redefined.

Right from the beginning of the year, following the direction of the Government, the Ministry of Industry and Trade has worked with ministries, branches and localities to implement supply-demand activities across the country to remove difficulties for businesses in production. and distribution.

In addition, to support businesses with high quality brands, we have also been integrating selected brands into national promotions such as the Clean Food Program to vote Vietnamese products for local people.

The integration of such programs has helped grow the domestic market since the beginning of the year, despite the economic consequences of the pandemic. This shows that the communication, promotion and support efforts of the Ministry of Industry and Trade and its agencies so far have been effective.

Construction material suppliers look towards strong rise in 2022
Construction material suppliers look towards strong rise in 2022

Placing quality and innovation first, Ton Dong A Corporation has become one of the 124 outstanding brands honoured at the Vietnam Value Programme 2020. Nguyen Thanh Trung, general director of Ton Dong A, said that along with the pride from the recognition, many of the enterprises were reminded of their responsibility to do better and build Vietnamese brands for customers in both international and domestic markets.

During the past 22 years, the corporation has been striving to become the leader in coated steel products. Ton Dong A also invested in modern and eco-friendly product lines to meet market trends.

The highlight of the corporation’s investment plan for 2019-2025 is the construction of its third plant with a capacity of 300,000-500,000 tonnes per year. Ton Dong A believes that Vietnam’s new free trade agreements will help the firm increase its exports, especially to the US, Australia, and Japan.

Construction material suppliers look towards strong rise in 2022

Ton Dong A determines that its advantage comes from offering coated steel products with high quality, low selling price, and the best services. To realise this target, the corporation invested in modern manufacturing lines and machinery imported from Japan, Europe, and South Korea. In addition, it applied modern operating methods meeting international standards and offers attractive after-sales services for 10-20 years.

Upon receiving the Vietnam Value’s recognition, another company, Nam Kim Steel JSC was honoured for its efforts in manufacturing high-quality products and its corporate social responsibility activities amid the pandemic.

Vo Hoang Vu, general director of Nam Kim Steel said that the group will focus on completing its targets, including expanding its retail system and distribution channels. Nam Kim Steel uses modern technology and equipment from the world’s leading corporations.

At all stages of production, Nam Kim’s products are subject to severe quality control, and thus the group has achieved many certificates from Japan, Australia, the United States, and Europe.

Vietnam's steelmakers have been improving the technology of production lines in the last decade
Vietnam's steelmakers have been improving the technology of production lines in the last decade

Strong recovery

Meanwhile, Vietnam’s economy has strongly developed, especially in construction infrastructure. Production has met the needs and even supplied a surplus of about 10-30 per cent for exports. The volume of materials has grown strongly, with modern technology and increasingly high quality, meeting the market demand and making a significant contribution to GDP growth.

The production capacity of Vietnam’s building materials industry is about 2-3 times higher than 10-15 years ago. Product designs are diverse and abundant, and product quality meets the standards of developed countries.

Thus, many products are on par with those from more developed countries and regions like the US, Japan, and Europe. Vietnam ranks fifth in the world in terms of cement production and is among the top 20 countries with the highest steel production volume in the world.

In 2020, the steel production reached approximately $24.15 tonnes, an increase of over two million tonnes from 2019. Vietnam’s steel production growth is expected to reach 15.7 per cent, compared with 5 per cent globally. The country’s consumption of construction materials is estimated to reach more than $22 billion in 2020, contributing about 6.5-7 per cent to its GDP.

Along with flourishing urban real estate projects and high-class resorts, Vietnam’s real estate market has witnessed an increase in demand for building materials, indispensable in many architectural works.

Vietnam’s cement industry has 90 clinker and cement production lines with a total capacity of 107 million tonnes per year. However, the full capacity is about 120-130 million tonnes of cement. In the world market, Vietnam ranks fifth in terms of cement production capacity, after China, India, the US, and Russia. Production in H1/2021 was estimated to have risen by 8 per cent on-year.

Vietnam’s cement industry expanded by 0.9 per cent in 2020, mainly driven by buoyant clinker and cement exports. As new export destinations continue to be explored, leading private cement firms look to develop new facilities to meet the demand from overseas, while the domestic market still holds much growth potential. Clinker and cement exports grew by 14.9 per cent in volume in 2020.

The market is driven by high demand from traditional export markets, including China and the Philippines. In 2020, China accounted for 57 per cent of Vietnam’s total cement exports. Considering the massive demand from China, cement and clinker exports will reach around 38 million tonnes in 2021, an increase of 11.7 per cent on-year.

The demand for construction materials continues to rise, both at home and in export markets like China, the US, and Europe
The demand for construction materials continues to rise, both at home and in export markets like China, the US, and Europe

Promoting awareness

With abundant mineral resources, Vietnam has many advantages in producing construction materials. The industry has made remarkable progress both in terms of quality and quantity, which changed the country’s position from a major importer to an exporter, with its materials shipped to over 120 countries and territories worldwide.

Despite the pandemic, Vietnam exported 9.86 million tonnes of steel worth $5.26 billion in 2020, up 47.9 per cent. Among the 10 largest export markets, the turnover to China, the Philippines, Taiwan, and India hiked by at least 30 per cent. Especially, a breakthrough was reported in trade performance with China, with a turnover of 3.54 million tonnes worth $1.48 billion, up 717 and 670 per cent, respectively, compared to 2019.

The demand for investment in factories and industrial parks is increasing strongly, leading to an increase in the demand for construction steel. Vietnam – which is the only country with positive growth in the region – is thus strongly attracting investment inflows. In addition, the implementation of free trade agreements and the associated removal of tariff barriers will help Vietnamese steel enterprises expand export markets and import raw materials.

In June, the export of iron and steel reached 1.02 million tonnes, worth more than $930 million, up 4.3 per cent in volume and 11.7 per cent in value compared to the previous month. In the first six months of 2021, the total export volume of this item reached more than 5.88 million tonnes, worth $4.5 billion, up 50.5 per cent in volume and 117.1 per cent in value compared to the period last year.

In that context, the Vietnam Value Programme is enhancing the competitiveness of Vietnamese brands in the domestic and international markets. The programme promotes the awareness of local and international distributors and consumers and aims to build the image of Vietnam as a country focusing on quality, innovation, and leadership.

During the past 18 years, the Vietnam Value Programme contributed to improving the awareness of the business community about building brands for their companies and products, while increasing quality, innovation, and pioneering capacity. Many of these enterprises have established leading positions in their sectors and maintained high-speed growth in both revenues and profits.

By Van Nguyen

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