While cement and steel producers are worried about the slow sale because of the lack of big projects under implementation, interior decoration materials keep selling well because houses are still being repaired.
According to the Tan Phu district’s Urban Planning Management Division, in the first quarter of the year alone, the division received nearly 1,100 applications for building new or repairing houses in the district, an increase of 7.24% over the same period last year.
No big construction works
Though the sale prices have been lowered seven times since the beginning of the year, the sales of the Viet Steel Joint Stock Company have not improved. Do Duy Thai, Viet Steel’s General Director, said the sales have decreased by 30% over the same period of the last year, while the stocks have reached over 200,000 tons.
“Previously, we could sell between 55,000-60,000 tons a month, while we are now selling 35,000 tons at the highest,” Thai said, adding that the sales would have been even worse if the company had not tried to do the marketing to boost sales.
A representative from another steel company said that the sales have been going slowly because of no big scale construction project under implementation now.
“The steel volume distributed directly to construction works has dropped by 60% over the same period last year, which has led to the sharp sale falls in general,” he said.
The cement sale has also been facing the same problem with the consumption volume in March 2009 down between 25-30% in comparison with the same period of 2008. A big cement distributor in the south said that only between 1,200-1,400 tons of cement are selling per day, while the figure was over 2,000 tons per day in the past.
Marketing Director of the T. brand name tile revealed that his company only received one big deal when providing products to 8,000 square metres of floor space to the construction work in Thu Duc district in HCM City in the whole of Q1.
Sale still going slowly despite price cuts
The Deputy General Director of a cement corporation complained that though the corporation has promised a higher discount rate for distribution companies and sales agents by VND 20,000/ton and gifts (three packs free for every 100 packs sold), the sales have still been going very slowly. He said that cement producers now think very carefully when setting business plan for the second quarter. The rainy season has come sooner, while the market demand remains unknown.
“The problem does not lie in the pricing, I mean the price decreases will not help boost sales when the purchasing power remains weak,” said Hoang Quoc Tuan, Deputy General Director of the Dong Nai Tile Company.
Tuan added that his company has lowered the sale price by 15% since the beginning of the year, but the volume of products sold just accounted for 30% of the production capacity. The company now has to produce hollow bricks as well to earn more jobs to survive the current difficulties.
Meanwhile, Bui Hoang Trieu, Director of the Minh Khoa Construction Company Ltd. in Tan Binh district in HCM City, said that 50% of his company’s clients build new houses and 50% demand repair services. The figures prove to be better than last year when no one built houses because of the overly high construction material prices.
Trieu said that his company is building houses at the package price of between VND 3.5-3.6 million per square metre, lowered by between VND 600,000-700,000 per square metre than the previous year.
VietNamNet/ |
