The associations general secretary, Ngo Van Thanh, said the oversupply was remarkably high, and a major headache for the nations glass enterprises.Besides a slowdown in new construction projects, he attributed the problem to the prevalence of glass smuggled from China to evade a 30 per cent import duty.
The association said glass makers have discounted their prices, but with modest results. The price of 4mm-gauge white glass plunged from VND47,500 per sq.m to VND34,000 between January and March, while that of 5mm coloured glass fell by VND7,000 to VND60,000 per sq.m, it said.
To remedy the situation, glass makers are considering suspending production of 4mm glass, which now accounts for 30 per cent of the industrys output.
Local construction glass makers are also lobbying the Government to suspend the licensing of new glass-making projects until 2010, amid concerns of an imminent surplus crisis in the domestic market. In a proposal recently sent to the Prime Ministers office, the association argued that given the industrys current production capacity, the domestic market could be saturated within five years.
The nation now has seven large production facilities, which last year rolled out about 81 million sq.m of glass products.
The construction of two new large glass-making facilities is expected to exasperate the situation. The Truong Son Glass Plant, with an annual capacity of 12 million sq.m, is expected to be operational this year, while construction work on a joint-venture in southern Vung Tau City, with potential to add another 29 million sq.m of glass a year on the market, is scheduled to be completed next year.
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Huge surplus of glass alarms association
The countrys glass makers have stockpiled a combined total of 21 million sq.m of glass, amassed during a period of near standstill industry growth paralleling the stagnant real estate market, according to the Viet Nam Construction Glass Association.