HCM CITY (Biz Hub) — Export are one of the emergency measures the Viet Nam Association for Building Materials has suggested to the Government to overcome the difficulties caused by oversupply.

The association said the industry's capacity in the next few years would be 20-30 per cent higher than domestic demand.

Without immediate measures, the situation would worsen since production capacity keeps increasing, Tran Van Huynh, chairman of the association, told Dau Tu (Vietnam Investment Review).

According to the association, some sectors are running at just 50 per cent capacity.

But some companies like Vuong Hai V-Block and Tan Ky Nguyen E-Block have managed to increase their output to 60-70 per cent of capacity by boosting exports.

Dang Le Viet, chairman of Khang Minh Brick Joint Stock Company, told Dau Tu that by exporting 35 per cent of its output his company managed to escape the worst effects of the stagnant demand.

So far this year, 7 million tonnes of cement have been exported, more than 150 per cent up year-on-year.

Hoang Xuan Vinh, general director of the Cam Pha Cement Company, was quoted as saying that this year his company plans to export 750,000 tonnes of cement, or as much as 30 per cent of its capacity.

Another measure the association has proposed to the Government is to boost domestic consumption by making it compulsory for public projects to use domestically produced construction materials.

It also suggested reducing value-added tax for the industry.

For long now the construction-materials industry has been in a slump due to low demand, high inventories, and high input costs, forcing many companies to close down.

This is despite a doubling of exports since 2010 to more than US$1.1 billion last year. — VNS