Ministry proposes measures to support struggling construction materials industry

It recommended that the Ministry of Transport incorporate more steel-embedded concrete in unfinished highway projects, particularly in flood-prone and remote areas, like the Mekong Delta. Increased usage of cement and concrete is also advised for road projects in frequently flooded rural or mountainous regions.

To further support the industry, the Construction Ministry and the State Bank will continue to disburse a VND120 trillion (US$4.8 billion) credit program. This fund is designated for the development of social housing, worker residences in industrial parks, and the renovation or rebuilding of old apartment complexes.

Additional proposals include postponing the export tax hike on clinker – a key cement ingredient – and reducing it to zero until 2025. Further measures suggest reducing loan interest rates for building materials manufacturers by up to 2% until 2025 and granting an interest-free grace period on outstanding debts within the industry.

Additionally, the industry and trade ministry should investigate, prevent, and apply penalties, if necessary, to the dumping of imported products.

Meanwhile, the construction ministry has emphasized that building materials businesses must improve their competitiveness, diversify products, and innovate production lines.

Currently, the industry contributes around 7% of Vietnam’s annual GDP and plays an important role in infrastructure and socioeconomic development, according to the construction ministry.

But as the domestic real estate market has sunk and construction projects have slowed, the industry is starting to feel the impact of the economic recession.

This year to date, Vietnam used approximately 72.4 million tons of cement, 4.35% less than the same period last year, while exports of the product are down 2%.

Compared to average consumption in previous years, the year-to-date usage of cement is down 13-15%, leading many factories to halt production and prevent excess stocks, the MC stated.

So far, eight cement production lines, which produce 9% of the country’s cement, have been shut down.

During the same period, ceramic tiles production was at 47% of its maximum capacity, but only 67% of the output was used.

Concrete production and consumption are down 14% as well.

Steel production and consumption in the first three quarters also decreased by 21.6% and 20% year-on-year, respectively.