opportunity in challenge

Customers are viewing glass products at the Vietbuild exhibition.

Domestic manufacturers are making efforts to improve product quality and develop new glass lines to meet the increasing demand for quality and technical features.

Many challenges

Construction materials expert, Master Pham Ngoc Trung, acknowledged that the construction glass market in Vietnam has been growing strongly, especially in the context of rapid urbanization, the demand for high-rise construction and commercial projects is increasing.

Glass products are not only used in civil works but also popular in high-end projects such as office buildings, commercial centers, luxury apartments, and important infrastructure works.

Currently, there are many types of glass on the market for construction, such as: tempered glass, double-glazed glass, laminated glass, heat-resistant glass... with diverse uses, used for glass doors, glass walls, domes, soundproofing - heat insulation... produced domestically, imported, the selling price is relatively suitable for all customers. For example, the type of tempered glass depending on the thickness (5, 8, 10, 12, 15 or 19 mm) and origin, the price ranges from 500,000 - 2.5 million VND/m2.

“The construction glass market is witnessing fierce competition between domestic manufacturers and foreign importers. Famous brands such as Guardian, Saint-Gobain, or PPG have been present in Vietnam and have captured a large market share. Domestic manufacturers are also making efforts to improve product quality and develop new glass lines to meet the increasing demand for quality and technical features,” said Mr. Trung.

However, the market began to slow down, due to the "freezing" of the real estate market, the demand for construction glass products also decreased seriously, falling to a very low level. Besides, one of the major challenges for the construction glass market in Vietnam is the price of high-quality glass products, especially imported products.

High prices increase construction costs, thereby affecting the selling prices of real estate projects. Many projects are stalled, causing businesses in the industry to be unable to pay off debts, leading to difficulties and ineffective production and business. According to data from the Ministry of Construction, from 2022 to June 2024, 3 production lines had to stop production, including: Viglacera Float Glass Factory (VIFG) - Binh Duong; Chu Lai Float Glass Factory (Chu Lai, Quang Nam) and Trang An Float Glass Factory (Ninh Binh).

One of the "giants" in the glass industry, Viglacera Corporation, recently announced its business results for the third quarter of 2024. Accordingly, after-tax profit on its separate financial report decreased by VND 177.2 billion, equivalent to a decrease of 43.9% compared to the same period last year.

As of the end of September, Viglacera's total assets were VND24,231.2 billion. Of which, fixed assets were VND5,990.5 billion, equivalent to 24.7% of total assets. Inventory reached VND4,583.5 billion, accounting for 18.9%.

Notably, in terms of capital structure, the payable debt as of September 30 was VND 14,277.6 billion, equivalent to 58.9%. Of which, short-term debt was VND 7,850 billion, long-term debt was VND 6,427.5 billion. Total short-term and long-term loans and financial leasing debt was over VND 5,018 billion, a slight decrease compared to nearly VND 5,135 billion at the beginning of the year. This outstanding debt level accounts for 20.7% of the total capital of the enterprise.

New Opportunity

Master of Economic Law Le Son Tung acknowledged that Vietnam is promoting the development of sustainable construction projects, encouraging the use of environmentally friendly and energy-saving construction materials.

This creates favorable conditions for the development of building glass such as Low-E glass, insulated glass and smart glass. Green building projects such as LEED, EDGE are becoming a trend, boosting the demand for energy-saving and environmentally friendly building glass.

With the support of government policies and the development trend of the construction industry, domestic glass manufacturers are making efforts to develop products and improve quality to compete with imported products. Domestic manufacturers can focus on increasing the production of tempered glass, safety glass, energy-saving glass, and developing new product lines with more competitive prices.

Along with that, recently, implementing the Government's direction in Resolution No. 108/NQ-CP dated July 10, 2024 and Directive No. 28/CT-TTg dated August 26, 2024, the Ministry of Construction has developed and widely consulted on the draft Circular guiding the management of quality of construction materials and products. On November 1, 2024, the Circular was issued with many new contents (Circular No. 10/2024/TT-BXD).

In particular, to strictly control the import of construction glass, it must ensure quality and be in accordance with Vietnamese standards, in order to remove difficulties for the domestic glass manufacturing industry. Importers will be fully responsible before the law for the quality of the goods they import.

For float glass goods, management measures for imported goods will include: State inspection of quality before customs clearance; Registration for State inspection of quality before customs clearance; Basis for State inspection based on certification results of designated certification organizations; Inspection agency is the Department of Construction.

It can be seen that the construction glass market in Vietnam has great opportunities but also faces many challenges. With the strong development of the construction industry, especially high-rise buildings, real estate projects, and the demand for green buildings, the construction glass market will continue to grow strongly in the coming years.

However, enterprises need to focus on improving product quality, improving production technology, and meeting safety and environmental protection requirements to capture the market and develop sustainably.

Source: https://kinhtedothi.vn/thi-truong-kinh-xay-dung-viet-nam-co-hoi-trong-thach-thuc.html