Operating under capacity
Chairman of the Vietnam Construction Ceramics Association Dinh Quang Huy said that the total design capacity of ceramic tiles is currently 839 million m2, and sanitary ware 26 million products. With this capacity, the Vietnamese ceramics industry ranks first in ASEAN and fourth in the world . Before the Covid-19 pandemic, the industry's total revenue reached 4 billion USD/year, but from 2022 to now, actual production output has declined, reaching only 55-60% of capacity.
According to the statistical report, the total export value in 2023 reached 511.5 million USD, of which tiles reached 231.4 million USD, sanitary porcelain 164 million USD, the rest was raw material and frit exports, by the first quarter of 2024, exports reached 110.5 million USD. In the first 6 months of 2024, the total consumption of tiles reached 188 million m2 of tiles and 5.5 million sanitary porcelain products.
Raw materials such as clay, kaolin, etc. are becoming increasingly scarce, and factories have almost no mines, so they have to buy in bulk. Enterprises have difficulty purchasing raw materials in areas such as Hai Duong, Bac Giang , etc.
The price of tiles and sanitary porcelain has not increased, but the price of raw materials has increased. Lump coal increased from 3.75 million VND/ton to 7 million VND/ton, and is now 6 million VND/ton, fine coal increased from 2 million to 4 million VND/ton, and gas increased from 8.8 USD/1 million MMBtu to 14.7 USD/1 million MMBtu (1 MMBtu = 28.26m3).
“The real estate market has been stagnant since the pandemic for many reasons, including many legal procedural problems, so projects have had to wait for a long time. Real estate construction activities are fragmented, causing many industries to also stop, leaving workers unemployed, affecting social security,” said Mr. Dinh Quang Huy.
On streets such as Hoang Quoc Viet, De La Thanh, Cat Linh, Dai Mo, etc., for over a month, many building material store owners have been restless because of the lack of customers despite launching many promotional programs before the Ngau month (the 7th lunar month).
Mr. Duc Dung - owner of a tile and sanitary equipment store on Dai Mo Street (Nam Tu Liem District) shared that for the past half month, the store has been deserted, customers mainly come to see or replace broken items, but there are almost no customers for construction or projects.
“The market situation has been quite gloomy since last year, we are having a very deep discount policy, even the price is the best in many years but that is still not enough to attract customers at this time. Those who are in need are still trying to wait at least until after the Ngau month before deciding” – Mr. Dung said.
Chairman of the Board of Directors of Vicostone Company Ho Xuan Nang shared that in 2024, the unpredictable fluctuations of the world economy when being affected by prolonged impacts from overlapping economic and political shocks, competitive risks, legal changes, etc. will continue to be major challenges for Vicostone's resilience.
The leader of this enterprise also acknowledged that it is difficult to expect the problem to be as effective as before 2019 because at that time the high-end segment was less competitive. Currently, many competitors compete at all costs, Vicostone sells for 100 USD, they only sell for 60 USD. In fact, Vicostone's product prices have decreased by about 20% from 2019 to now.
Removing difficulties
Industry experts believe that the temporary solution for businesses to overcome difficulties in the coming months is to focus on pivoting, shifting to retail, increasing coverage, developing more distributors, level 1 and 2 agents; and promoting product exports abroad when the product quality of Vietnamese brands is on par with world standards.
At the same time, focusing on public investment projects, especially highway and airport projects; focusing on removing difficulties for the real estate market and promoting disbursement of public investment capital is also an important and indispensable solution.
To solve these difficulties, the Chairman of the Vietnam Construction Ceramics Association proposed to the Prime Minister a series of major contents, including planning raw material areas, considering mine levels associated with deep processing manufacturers to improve the quality of raw materials.
In the ceramic tile sector, investment is only allowed to replace outdated production lines, no new investment is licensed. The government creates a fund to promote the brand of Vietnamese construction ceramic products, and boosts export activities by supporting ceramic enterprises to participate in international fairs and exhibitions.
The representative of the Vietnam Construction Ceramics Association also proposed that the Government approve the certification process for imported goods, allowing the inspection of the source of imported ceramic tile products into Vietnam, similar to the certification process that Thailand, Malaysia, Indonesia, etc. are implementing for Vietnamese ceramic tile products.
This includes a regulation to send a delegation to inspect the factory to ensure the quality of goods before they are imported into the market. This source inspection is linked to customs documents and only when the requirements are met will the goods be cleared through customs.
In the past few years, Indian tiles imported into the Vietnamese market accounted for 50% of the total import volume, exceeding the 3% limit set by the WTO to be subject to review. Not only that, Indian tiles are also dumped, causing damage to the domestic manufacturing industry.
The Association and enterprises are initiating an anti-dumping investigation into ceramic tiles imported from India. This is also a practical measure to protect the domestic market and the ceramic tile industry of Vietnam. The Construction Ceramics Association recommends that the Government and the Ministry of Industry and Trade support this lawsuit.
Enterprises need to develop a team to survey and evaluate the market, propose and orient production and business products to have appropriate and effective plans, maximizing existing capacity. Promote communication programs, focus on promoting brand image, research and develop new product designs, and meet people's needs.
Master of Construction Materials Pham Ngoc Trung
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