Building materials not oriented as exports

Building materials have recorded a robust export growth rate over the past few years, but the Ministry of Construction in the long run does not encourage manufacturers to boost export, officials said in HCM City on Thursday.

Pham Van Bac, deputy head of the Building Materials Department under the Ministry of Construction, told a seminar here that these materials in the long run should be to meet local demands only.

Bac, however, hailed enterprises at the seminar on tapping the Middle East and African markets organised by the Vietnam Trade Promotion Agency in HCM City on Thursday for their efforts to boost export now.

Given the frozen real estate market, building materials makers are facing huge challenges, so boosting exports is a good way to find outlets for them, he said.

The ministry considered it a good way for them to survive current tough times, but domestic consumption should be given the top priority, he noted.

Explaining the ministry’s stance, Bac said building materials production requires much energy and natural resources, and causes environmental pollution. Due to those drawbacks, several countries limit or even ban the exportation of construction materials in a bid to satisfy their domestic consumption only.

For instance, Thailand currently puts a limit on tile production and imposes the export ban on this kind of construction material.

Furthermore, the costly shipment fees also make exports of such materials less cost-effective, especially to faraway markets like Africa.

However, boosting building materials exports is now imperative as the domestic supply of key building materials has far outpaced the demand, resulting in mounting inventories.

Apart from traditional markets, Bac suggested exporters to look to the new ones such as the Middle East, Africa and Eastern Europe.

Vietnamese building materials producers can grasp more export opportunities opening up in the Middle East and Africa thanks to their booming construction industry, said Ly Quoc Hung, a representative of the Ministry of Industry and Trade.

The Cooperation Council for the Arab States of the Gulf (GCC), for example, plans to spend some $915 billion on construction projects within two years of 2012-13, with Arab Saudi and the United Arab Emirates alone accounting for 59 percent of ongoing projects in the Middle East and 75 percent within GCC, Hung said. Such projects will require huge volumes of imported building materials.

Africa also emerges as a strong importer of building materials, he said.

Nigeria, for example, imports some $4.2 billion worth of building materials each year, while Algeria imported nearly $2.3 billion worth of such materials in 2010.

Vietnam last year exported up to $766 million worth of building materials, up 87 percent against the previous year’s figure of $410 million. Cement export posted the biggest increase last year, earning $319 million compared to only $97 million in 2010, according to data from Vietnam’s customs at the seminar.

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Category: Business