State-owned construction firms performed poorly in the first six months of the year, with unfinished projects and slow growth compared to last year.
Gloomy outlook for construction sector
The Ministry of Construction said in a report that both construction and consumption of materials are down because of cuts in Government investment.
According to the report, due to high inventories, many companies have had to cut production to avoid further losses.
For example, there were 9.6 tonnes of cement produced in the last six months, 37.8% of the initial plan, but 0.4 tonnes are sitting idle in inventories.
Construction glass 62.9% of the production goal was met, but 2.6 million square metres are still in stock. Tile production reached 33% of what was planned, but 2.6 million square metres lie in stock.
Building construction was at 59% of the same period last year because of a lack of investment capital.
The ministry reported that a number of companies did not follow the business plans they had registered, investing less than claimed. For example, Vietnam Cement Industry Corporation invested only 6.3% of its investment plan, Vietnam Fitted Lilama invested 12.9% and Bach Dang Construction Corporation invested just 13.2%.
The ministry has requested that construction companies focus on the problems facing them in order to better the situation for the remainder of the year, specifically restructuring debts, changing high-interest short-term debts to long-term ones with less interest, and focusing on core business activities.
Other goals include reorganising management and financial system to establish large subsidiaries, raise registered capital and avoid competition among subsidiaries of the same group.