The Middle East market is becoming a new and promising destination for local construction material producers to explore in the coming years.
Head of the African, West and South Asia Markets Department under the Industry and Trade Ministry, Ly Quoc Hung, said the industry was booming in the Middle East as governments target infrastructure development.
During the 2009-10 period, the construction projects in this market totalled 3 trillion USD and it is estimated that its infrastructure development projects would grow 5.4 percent annually over the next five years, compared to the global growth of 5.2 percent.
"This sounds very promising for our producers since almost all of the materials used for these projects must be imported," Hung said.
The latest figure from the Construction Ministry showed that despite a production capacity that far exceeds domestic demand, the industry has not yet reached 500 million USD a year in exports.
For example, cement production increased from 24.1 million tonnes in 2005 to 51 million tonnes this year. Glass production in 2005 was 80 million square metres but was estimated to increase to 142 million square metres this year.
In the near future, the country would have to cope with an abundance of materials if local producers did not create a proper plan, said Deputy Minister of Construction Nguyen Tran Nam .
Nam cited the Middle East as having great potential if local producers take advantage. China recently closed nearly 600 cement plants due to environmental concerns and more plants will probably shut down in the near future. Thailand had a planned capacity of 60 millions tonnes of cement per year but the real capacity has fallen short by nearly half.
Hung, who agrees with Nam that the Middle East presents promising uncharted waters, said: "Market regulators should have tighter relations with this market via the memoranda of understanding and agreements to boost exports."
He added that producers should work to improve product quality and survey good opportunities.
Bui Van Luyen, director of Ha Long Cement Company noted, however, that local producers had been challenged by foreign demand to keep export prices steady for at least six months, while power and coal prices was increasing./.