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Construction glass unable to find buyers

Post Time:Mar 16,2009Classify:Industry NewsView:241

VietNamNet Bridge – With 34mil sq m of glass in stock at present, or 1/3 of the total yearly output of the country, a lot of construction glass producers have been keeping production at moderate levels, having dismissed a lot of workers.


Unsold glass at VFG
 
Workers at Viglacera Dap Cau Company are unhappy these days. The way into the workshop is full of heaped up, unsold glass. The 120 tonne/day production line stopped running five years ago.

More than 2mil sq m of glass, worth VND50bil, is yet to find buyers. The number of laid-off workers has reached 326, or a half of the total staffs of the company.

Deputy Director of Viglacera Dap Cau Company Nguyen Manh Chan said that in order to survive, his workers now have to provide some services for construction works. The company now still has to pay VND7bil a year in interest on the loan it took out to purchase the production line which is sitting idle.

VFG, the floating glass joint venture between Vietnam and Japan, is facing the same problem. The large storage facility of the company is full of glass. The labels on the glass products show that they were made in mid 2008.

A staff of VFG revealed that more than 10mil sq m of glass worth $20mil is piled up at the company. The company is running its production lines at only 50% capacity.

Inability to sell products is the greatest worry of all glass producers, from VIFG Binh Duong, VGI Vung Tau, to Viet Phuong and Ky Anh. “If the situation does not improve, glass companies will have to stop production,” said Dang Hoang Tung, Deputy Trade Director under Viglacera Corporation.

Holes in technical barriers

While domestic products are unsalable, imports still keep flocking into Vietnam. Experts have estimated that some 2mil sq m of glass is imported every month.

Nguyen Manh Chan said that 3mm glass imported from China is selling at Yuan/sq m (VND20,000/sq m), while Dap Cau brand name product is selling at VND35,000/sq m. Therefore, it is understandable why domestic products remain unmarketable.

The gap between domestic product and import prices has been explained by the higher input material prices in Vietnam than in other countries. FO oil in Vietnam is selling at VND7.7mil/tonne, while in China VND3.6mil/tonne, and Singapore VND4.2mil/tonne.

Le Minh Tuan, Secretary General of the Vietnam Glass Association (Vieglass), said that domestically-made products meet requirements in terms of both quality and quantity. However, they still cannot compete with imports due to trade fraud.

Tuan said that in many cases, importers declare the wrong taxable values of import products, just 50-70% of actual values, and just 30-40% of the production cost in Vietnam. Moreover, importers also deliberately declare lower thicknesses to enjoy lower tax rates, he added.

However, Tuan said that the biggest problem now is a hole in the technical barriers for imports.

China, Malaysia, Thailand and regional countries always require documents that show the quality of products and certificates of product quality inspection before imports get customs clearance.

Meanwhile, according to Vieglass, construction glass products of low quality are dominating construction sites, and could cause investors losses and affect construction works.

Vieglass has called on the Ministry of Construction to set up technical requirements in order to ensure the quality of imports arriving in Vietnam.

Source: VietNamNetAuthor: shangyi

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