ANALYSIS: Vietnam consumers still look for new products at best prices with after-sale services including replacement facilities. Companies are forced to market new or innovative products in face of stiff competition from imports, even from the ASEAN countries like Thailand and Indonesia, which enjoy easy access to the Vietnamese consumers under Asean Community. Vietnam’s industry sources believe that the property markets will pick up next year greatly. They said the market has seen a stable growth in the first half this year, in various sections from lower-segment to high-end and tourism. VABM said with recovery of the markets new projects are coming in stream with attractive offers by the developers to the apartment and condo buyers. According to the estimates of the MoC and building material traders, a substantial number of the households of the total population of nearly 100 million (2016) are buying or constructing new residential houses and a huge number of new institutional and commercial buildings are constructed every year. Those buyers are using quality construction glasses. MoC monitors a growing trend of urbanization and migration from the rural areas that ultimately creates opportunities for increased sales of construction glasses to be used in new houses. According to the estimates of the UN Department of Economic and Social Affairs, this year some 33.6 percent of the population in Vietnam is urban and the median age of the country’s population is 30.8 that has power for spending on improved living. Preferential loans in massive amounts are being provided for social housing development, according to Nguyễn Trần Nam, Chairman of the Việt Nam Real Estate Association. Nam said at an online business forum recently that commercial joint stock banks with controlling state stake-holdings would have to spend 3 percent, equivalent to some US$13.4-17.9 billion (VNĐ300-400 trillion), of their total outstanding loans for developers and buyers of social housing projects that can contribute significantly to the real estate transactions, which showed a good progress last year. “Vietnam’s real estate market began recovery from the end of 2013, with the number of successful transactions in 2015 doubling in Hanoi and a 1.8-fold increase in Ho Chi Minh City as compared to the previous year,” said Deputy Construction Minister Do Duc Duy. Official and other institutional forecasts indicate last year’s GDP growth of some six percent that stimulated Vietnam’s consumption will have a robust positive impact this year on the glass industry sector’s construction and packaging glasses both. According to MoC, housing and construction growth is further going up this year, despite affect of drought on agriculture that reduced GDP, significantly, in the first half of 2016 to some 5.52 percent, down from the 6.32 percent of first half of last year, as reported by the government’s General Statistics Office (GSO). “Vietnam has targeted GDP expansion of 6.7 percent this year, meaning growth in the second half will need to be around 7.6 percent if the target is to be met,” said Dao Quang Tuyen, director of the national accounts system department (NASD) at the GSO. “This may be difficult given the current state of the economy,” Tuyen added. Associations of building materials, constructors and real estate developers said the market has recovered considerably in last three years after a slump of a couple of years when the glass manufacturers were less concerned in controlling production capacity as a result of which there were unwanted inventories. However, industry sources monitoring shows, Vietnam’s real estate inventory had an estimated value of US$1.68 billion (VND37.49 trillion) as of the end of June, down 26 percent or US$603 million (VND13.4 trillion) from the end of December 2015, according to the Agency for Management of Housing and Real Estate Market under the MoC. Increasing consumption of beer and other beverages have helped packaging glass to stay in the market comfortably although imported beer continuously poses a threat. Current year’s demand for beer in the domestic market is expected to be around four billion litres, according to an estimate of the Vietnam beverage association VBA. Many foreign beer manufacturers, including Japanese and Thai, are planning to open plants in Vietnam to exploit the double digit growth, while existing foreign operators as well as domestic breweries, including market leader SABECO, have expanded production, said VBA. Beer and other beverages saw 10 per cent growth in the first quarter of this year, the highest increase for two years and mainly led by volume increases of 8.1 per
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PROFILE: CONTAINER GLASS PLANTS Malaya Vietnam Glass Limited (MVG) (O-I BJC Vietnam Glass Ltd) Location: Ba Ria-Vung Tau, My Xuan Industrial Estate, 80 km east of Ho Chi Minh City, Vietnam. Products: Beverage, drinks, food and medicine packaging glass Markets: Domestic and export markets Others: Malay Vietnam Glass Ltd is the leading beverage packaging glass manufacturer in Vietnam. The company has been taken over in 2010 and is now 70 percent owned by BJC and O-I. It is a manufacturer and distributor of glass containers serving producers of beer, beverages and foods, such as, PepsiCo Vietnam, CocaCola Vietnam, SABECO, Vietnam Brewery, Asia Pacific Brewery and SABMiller. Its production capacity of 280 tons per day is being expanded, following higher demands in the domestic market. It is well-equipped with world-class modern technology and natural gas is being used as a source of energy to reduce production costs. San Miguel Yamamura Haiphong Glass Co Ltd Location: Ngo Quyen District, Hai Phong City, Vietnam Products: Beverage, drinks, food and medicine packaging glass. Markets: Domestic and export markets Others: San Miguel Yamamura Haiphong Glass Co Ltd operates as a subsidiary of the Philippines based San Miguel Yamamura Packaging International Limited of San Miguel group. In Vietnam, its glass containers are used mainly for packaging beer, soft drinks, spirits and liquors, among others. It is a major manufacturer of packaging glass in Vietnam with international standard. Go Vap Glass Location: Vap Dist, Ho Chi Minh City Vietnam Products: Glass tablewares, glass containers, glass decorative wares and other glasswares. Markets: Domestic and export markets Others: Started as container glass factory in 1960, the Vietnamese state owned Go Vap Glass Joint Stock Co started production of color and clear glass tablewares, especially, drinkwares, in 1985. It has nearly 2,000 designs, and exporting to the world markets since 1993. Export serves mainly European Union and Scandinavian countries. In Vietnam’s large and deficit market, European and US companies are exploring markets for higher-middle and upper-end segments of consumers of glass tablewares. Chinese and other Southeast Asian glass tablewares are available in Vietnam to cater the increasing demand.
PROFILE: OPTICAL AND SPECIAL GLASS PLANTS Hoya Lens Vietnam Location: Binh Duong, Vietnam Products: Optical glass and other glass products. Markets: Domestic and export markets Others: Hoya Lens Vietnam is a subsidiary of Hoya Lens Corporation of Japan. Its optical glass products and lenses serve various industries including electronics, imaging, healthcare and others. Tamron Optical Vietnam Location: Hanoi, Vietnam Products: Optical glass and other glass products. Markets: Domestic and export markets Others: A subsidiary of Tamron optical glass and lens company of Japan Kishiro Vietnam Location: Hanoi Products: Optical glass and other glass products. Markets: Domestic and export markets Others: A subsidiary of Kishiro optical glass and lens company of Japan. Vietnam Special Glass Location: Ving Tau, Vietnam Products: Touch panel and solar glass Markets: Domestic and export markets Others: Vietnam Special Glass is a subsidiary of NSG (Nippon Sheet Glass) group of Japan. It is major manufacturer of solar glass and touch panel in Vietnam.
cent, according to US based researcher Nielsen’s FMCG Market Pulse report for the first quarter released in last June. Competition of alternative packaging is rising fast in Vietnam, but compared to flat glass, packaging glass is less concerned about capacity utilization as glass bottles are still most favoured packaging in major users, breweries. Domestic container glasses have stronger command on the local market compared to flat glass that suffers from capacity surplus.
Biting capacity
Industry sources predict that the annual demand for flat glass is likely to approach 220-250 million sq metres by 2020, against the country’s existing estimated annual production capacity of around 200 million sq metres. As all existing types of products meet only a part of the domestic demand of
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