Due to the impact of COVID-19 epidemic, the business situation of construction materials enterprises is facing many difficulties and may continue in the coming time.

According to statistics and quick reports from the Association of Cement, Construction Ceramics, Glass and construction glass ... and some businesses, along with the decline of the real estate market leader, the field Construction materials are also heavily affected. Production output and consumption of some main types of construction materials such as cement, tiles, sanitary porcelain, construction glass in the first months of 2020 began to decline sharply.

Experts pointed out, because construction materials are always associated with the development of the real estate sector and the need for construction investment of the people. Therefore, when the real estate market declines severely with new supply as well as the demand of most housing segments, this means that demand for construction materials such as iron and steel, cement, brick construction, ceramic tiles, interior equipment ... all dropped sharply.
 

Illustrative image (Source: baoxaydung.com.vn)
 

Cement production in the first quarter of 2020 reached an output of 19.55 million tons, down 11.4% from 22.06 million tons in the same period in 2019. At the same time, the consumption output is also only at 17, 85 million tons, down 20.9%. Due to slow consumption, the average inventory of the entire cement manufacturing industry has increased to 4.8 million tons, up 135.3% and 2.35 times higher than the same period in 2019 of 2.04 million tons. The amount of exported cement also stood at 6.6 million tons, down 21.4%.

In the same difficulty is the field of construction ceramics with the output of ceramic tiles reaching 120.5 million m2 - down 7.3% over the same period and consumption reaching 55 million m2 - down to 52.2%. . Notably, the inventory of ceramic tiles increased to 98.1%, equivalent to 158.5 million m2.

Sanitary wares produce 4.5 million units, down 6.2% with 2 million units - 37.5%, bringing the inventory to 6.5 million units. products - up 150% over the same period.

Although orders for export of ceramic tiles and sanitary ware in January and February 2020 have not been affected much, but in March, most of them were delayed due to blockade orders of European countries, the US and Japan. , South Korea and some ASEAN countries.

For construction glass, the production output in the first quarter reached 55.8 million m2 of standard (QTC) - down 4.2% over the same period. Sales volume reached 14.8 million m2 QTC, down 61.5% and inventory 91.4 million m2 QTC - up to 292%. Currently, in addition to Nipon Sheet Glass Company exporting 100% of its products to foreign countries, in the first quarter has not been affected much, the rest of other domestic glass enterprises, the export volume is almost negligible.

As a leading brand of construction materials production, Viglacera Corporation is also difficult to avoid difficulties due to the influence of COVID-19 epidemic. According to this enterprise, in February, there was a shortage of input materials for the manufacturing plants. Not only that, the export of capital which is following the "very smooth" process also faces difficulties. The results of production, business activities, consumption and market development have been greatly affected.

Experts evaluate that, in general, consumption of construction materials in the first months of 2020 tends to decrease; In particular, the field of construction glass and ceramic tiles saw the strongest decline in sales, respectively 61.5% and 52.2% over the same period due to the impact of the disease.

Some other types of construction materials such as building materials, roofing, stone, sand, gravel also tend to reduce consumption by 10-20% over the same period. Facing this situation, businesses have proactively reduced production output to limit product inventories.

For export markets, businesses still continue to export under signed contracts. However, due to the outbreak in most countries, the restriction of travel between the countries affected by the epidemic also greatly affects the exportation of enterprises.

Therefore, enterprises can not sign new export contracts, old contracts are implemented slowly, cost price increases, prolonged storage time, workers unloading, transporting goods are delayed. .. Export output in the first quarter of some businesses decreased from 13-20% (depending on the field); in which, cement export decreased by 13%.

Due to slow consumption, in the first months of 2020, some businesses were forced to reduce the price of products by 10-12% compared to the fourth quarter of 2019.

A number of raw materials, equipment, supplies and spare parts must be imported from abroad (mainly from China) for production activities of enterprises which stalled in February and early March. However, the supply was back to normal by the end of March.

According to Mr. Dinh Hong Ky - Chairman of the Board of Directors of Secoin Company, this construction material manufacturing enterprise has experienced a 50% reduction in orders. It is expected that the key export markets of Secoin such as the US, Europe, Australia ... will continue to decline in the coming time when all investment and business activities in these countries are stopped due to epidemics. The impact of the disease on construction industry, construction material production may be slower than other sectors such as hotels, restaurants, transportation ... but certainly the recovery will be slower.

The Ministry of Construction also stated that the difficulties of construction material manufacturing enterprises in the first quarter were only initial steps, the situation may be more complicated in the second quarter and may be prolonged. If the epidemic situation is not soon controlled, the risk that some businesses have to stop production is entirely possible, leading to tens of thousands of workers who will have to quit their jobs - the Ministry of Construction warned.

In order to solve difficulties for this production group, the Ministry of Construction has gathered the opinions of many businesses, associations and professional associations and offered some forms of support. Accordingly, the first proposal is to reduce VAT to 5%, to reduce interest rates on bank loans; adopt policies to support enterprises to postpone or postpone the deadline for VAT payment, corporate income tax, export tax, land rent, social insurance ...

In addition, the reform of customs procedures is also essential to ensure fast, convenient export customs clearance, saving time and cost for businesses.

In addition, localities also need to promote disbursement of public investment, continue to have appropriate programs to stimulate demand and increase domestic consumption. Enterprises themselves in this period should actively seek new export markets to expand or replace the old ones.

Source: Dangcongsan.vn