FT: Vietnam glass makers struggle to survive overseas competition

Vietnam's two largest glass producers are sitting on major stockpiles of unsold stock, despite strong protection from Government tariff and non-tariff measures.

The Vietnam Floating Glass joint venture company (VFG) has surplus inventory of 5 million sq.m, equal to 20 per cent of its annual output target.Meanwhile, Dap Cau Glass Company, has been able to offload only 60 per cent of this year's production.In recent months, their combined sales turnover has slumped by VND3 billion a month, or 650,000sq.m in volume terms.Vietnamese-made glass has a 30 per cent market share.Chinese producers command a 60 per cent share, with Japan, Italy and Belgium occupying the remaining 10 per cent slice.

The Government is hoping to ward off this strong offshore competition with a 40 per cent tariff, and has also slapped a ban on imports of transparent and coloured glass with a thickness of 12mm or less.

But the measures haven't been enough to stem the poor sales at Vietnam's major producers, whose prices and products remain uncompetitive.

Vietnamese glass costs 40-50 per cent more than elsewhere in the region, and its designs are monotonous.

Although glass sheet producers, VFG and Dap Cau, enjoy tariff protection, dozens of companies that specialise in fashioning materials sourced from glass sheets are struggling against a tide of imports.

The current import tariff levied on finished glass is much lower: just 5 per cent for safety glass and 30 per cent for coated glass.

These producers are having to buy costly Vietnamese sheet glass while competing against low-cost foreign rivals, and want to see higher tariffs applied to their corner of the industry.

600450 FT: Vietnam glass makers struggle to survive overseas competition glassonweb.com
Date: 28 November 2001
Source: FT

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