Construction glass sector confident about regional competition

The domestic construction glass industry is confident it will be able to compete under the ASEAN free trade area when import tariffs are shattered to under 5 per cent.

The industry has not yet been touched by the ASEAN Free Trade Area (AFTA) as tariffs remain at a high 20 per cent, but by 2006 these will be slashed to between 0 and 5 per cent.

Construction glass producers believe they can cut prices by 20-30 per cent to produce glass which will be 10-20 per cent cheaper than current import prices. Nguyen Anh Tuan, head of the planning and investment division at the country’s biggest glass and ceramic producer, Viglacera, said Viet Nam’s use of modern technology and cheap labour costs would put them ahead.

He said domestic producers also have the advantage of understanding Vietnamese customers’ taste and the convenience of an established distribution system.

Viglacera general director, Dinh Quang Huy, said the corporation’s new plants are already producing competitively priced glass, as evidenced by US and South Korean sales last year of 20 million sq.m.

Huy said demand for the products from the company’s Binh Duong Float Glass Plant exceeded supply. The plant has already sold 8 million sq.m of white construction glass this year, up 398.5 per cent.

However, fledgling construction glass producers will be disadvantaged compared with their more established ASEAN counterparts, according to the Viet Nam Float Glass Joint Venture’s marketing director, Akihiro Senda.

Most companies have felt little or no change in sales since the first AFTA cut was implemented on July 1.

They attributed the stability to the AFTA tariff cut being made outside Viet Nam’s peak construction season. Companies have predicted that sales will surge in the next two months as the construction season approaches, however, prices will change only slightly.-Enditem

600450 Construction glass sector confident about regional competition
Date: 28 July 2003

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