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Construction material sector in Vietnam on verge of bankruptcy

Steel News - Published on Sat, 28 Jul 2012

According to Vietnam Steel Association\'s latest report, the production and consumption of steel in recent years has reduced drastically.

Generally speaking, in the last six months of 2012, 2.38 million tonnes of steel was produced, about 6.8% less than in the same period last year and around 2.22 million tonnes was purchased, almost 7% YoY less than in the same period last year.
In particular, in June 2012, around 380,000 tonnes of steel was manufactured, a decrease of 12% MoM as percent compared to that in May 2012. The steel association also forecasts that around 20% of enterprises will be declared bankrupt in 2012.

Meanwhile, the cement sector is also facing dismal times as it has more than 10 million tonnes of inventory and many enterprises have huge debts going into thousands of billions of dong.

The construction sector has seen a decrease by 50% in purchasing power in cement, steel and iron in wholesale and retail markets and 40% fall in brick, tile, ceramic and paint.

Retail price of small iron dropped by VND 500 per kilogram and big iron by VND 9,000 to VND 14,000 a rod. Sand and brick slipped by 5% while bath showers, bidet mixers and lavatory seats decreased by 10% and wooden flooring by 15%.

Mr Tran Thanh Hung director of Son Hung Construction Company said that after Government Resolution 13, to reduce and relax deadline for bank loan, the construction sector is hopeful for the future.

Mr Hung said that one of the signs of recovery is that despite the rainy season, this time the company still has orders in the south. In addition, the bank interest is quite low; however, it is still not attracting investors.

On the other side, construction companies are selling at a loss in the hope of reclaiming money, and also activating the market.

Source - Saigon GP Daily

(www.steelguru.com)

Posted By : admin on Sat, 28 Jul 2012
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