Vietnam: VCMA urges export growth

With supply surpassing demand in the Vietnamese construction materials sector, the Vietnam Construction Materials Association (VCMA) recently identified several key export markets in a bid to raise ov…

With supply surpassing demand in the Vietnamese construction materials sector, the Vietnam Construction Materials Association (VCMA) recently identified several key export markets in a bid to raise overseas sales. Taiwan, the EU, Japan, South Korea, and the US were cited in a recent VCMA report, which also called on the industry to step up trade promotions aimed at improving export potential. According to the report, Taiwan has a huge demand for construction materials, particularly glass and tiles. It presently imports almost all of its glass, topping the list of world glass importers, as well as about 30% of its tiles. Taiwan is considered an ideal export destination due to its proximity to Vietnam and its high import prices. EU countries are also seen as key export markets because of a number of large-scale infrastructure projects planned for the next few years that will require large amounts of construction materials. Japan and South Korea were also named in the VCMA report as markets prime for Vietnamese exports. As much as 40% of Vietnam“s Toto and Inax sanitary-ware products have been exported to Japan. The report said Vietnam would also focus on consolidating exports to other ASEAN countries in the region, along with China and Australia, Africa and the Middle East. The Ministry of Construction said Vietnam set average annual export growth targets of 25% over the next five years, focused on construction stone, terracotta, ceramic and granite tiles, sanitary-ware products and bricks. It is estimated that between 25-30% of total domestic output will be exported. Construction material export turnover is expected to reach USD 125 million in 2006, a 25% increase on 2005. To meet this target, Vietnamese enterprises need to develop detailed strategies for different markets, pay attention to product design and quality, and find favourable trading services to enhance their competitivity, according to the report. The association also said the Government policy must support Vietnamese exporters in order to mitigate difficulties they face in export procedures. The association called on Vietnam to raise production destined for export, which is below that of its neighbors. While the tile industry in Vietnam is much larger than that of Thailand and Malaysia,, the export value of Vietnam“s tile producers is only 10% of these two countries, the report said. Vietnam has over 230 construction material exporters, generating total export revenues of only USD 279 million over the five past years, a figure widely considered to fall short of the industry“s potential.