Vietnam’s Building Materials Industry Gradually Elevates Its Position

Kinhtedothi.vn – Thanks to the application of science and technology, Vietnam’s building materials (BM) industry has made remarkable progress in production capacity and product quality, meeting the increasing demands of both domestic and international markets.

Outstanding Development

In recent years, the building materials industry has achieved significant improvements in production capacity. Prior to 2010, many key Vietnamese BM products — such as clinker, ceramic tiles, sanitary ware, and construction glass — were still imported to meet domestic construction needs.

However, today, domestic BM enterprises have largely met the construction and infrastructure development demands nationwide. Many products have entered export markets, including clinker, energy-saving glass, ceramic tiles, natural stone, sanitary ware, and industrial lime.

These achievements have not only increased output and production efficiency but also enhanced the industry's international standing. Over the past 40 years, production capacity for key BM products such as cement, ceramics, and glass has increased dozens to hundreds of times.

Additionally, the production value of the BM industry continues to rise, with its contribution to Vietnam’s GDP reaching about 6–7% by the end of 2023.

According to the Building Materials Institute (under the Ministry of Construction), Vietnam’s cement industry began in the early 20th century with the establishment of Hai Phong Cement Plant using vertical kilns from France with a total capacity of 20,000 tons/year.

By 1927, rotary kiln technology was introduced, raising total industry capacity to 2.6 million tons/year. However, most cement facilities before this used vertical kilns, dry methods, or small-capacity wet rotary kilns, which consumed large amounts of energy and yielded unstable, low-quality products.

Nguyễn Quang Cung, Chairman of the Vietnam Cement Association, shared that during the early development of Vietnam’s cement sector, projects were developed in various regions, though domestic enterprises were financially and technologically limited, and market demand often exceeded supply. Medium-level technologies were favored due to lower investment costs, limiting the entry of companies with modern, higher-priced technology.

Despite this, Vietnam has transitioned from outdated technologies and low capacity to modern dry-process rotary kilns with dual-branch heat exchange systems (5–6 levels high) and capacities from 4,000 to 12,500 tons of clinker per day. This has propelled Vietnam to become the largest cement exporter in Southeast Asia and the third largest globally.

In ceramic tiles, there were no advanced production lines until after 1985. By 1993, Viglacera invested in a 1 million m²/year ceramic tile line (Welko, Italy) at Hanoi Ceramic Tile Plant (Thanh Xuan, Hanoi), introducing spray-drying and roller kilns. In 1996, Thach Ban Ceramic Company launched the first granite tile line producing high-hardness polished tiles.

Today, Vietnam has 83 ceramic tile factories with a total capacity of 831 million m²/year, making it one of the world’s top 10 producers of construction ceramics. In 2023, exports reached nearly USD 58 million.

For sanitary ware, Vietnam had only two factories with a combined capacity of 800,000 products/year before 1995. These used outdated shuttle or tunnel kilns and manual production. Over the past 30 years, production capacity has increased by nearly 200 times to 26.5 million products/year, with actual output reaching 13.6 million units in 2023 — 15 times more than in the past.

The construction glass sector also reported impressive growth, with capacity increasing 57-fold from 5.8 million m²/year in 1994 to 331 million m²/year in 2023, placing Vietnam among the top producers in Southeast Asia.

New Opportunities

Vietnam’s demand for building materials remains high due to a relatively low national housing area, an urbanization rate of only around 43%, and incomplete infrastructure in transport and energy.

However, in recent years, the domestic BM industry has faced difficulties, with declining sales and revenues leading to production slowdowns, job losses, and broader economic impacts.

Nevertheless, businesses in infrastructure and BM sectors — such as steel, cement, asphalt, logistics, housing, and industrial real estate — are expected to benefit from a surge in public investment in 2025.

Experts note that public investment often accompanies major projects like expressways, bridges, airports, hospitals, schools, and urban zones — all of which require massive volumes of materials like cement, steel, sand, stone, bricks, glass, and aluminum. Hence, public spending increases BM demand.

With this rising demand, BM producers must expand or enhance production capacity to meet market needs, fostering industry growth and job creation in manufacturing and supply.

Government-backed infrastructure spending offers stable, long-term sales prospects for BM producers, reducing volatility in prices, especially as private real estate and investment projects may fluctuate with economic cycles.

For example, Phase 2 of the North-South Expressway project, with a total investment of VND 146.99 trillion and length of 729 km, began construction in 2023 and is slated for completion in 2025 and operation by 2026. Other key projects — such as Long Thanh Airport, HCMC Ring Road 3, and Hanoi Capital Region Ring Road 4 — are also being accelerated.

Notably, the high-speed North-South railway project, with an investment of USD 67.3 billion, is expected to start in 2027 and finish by 2035. It will generate a construction market valued at USD 33.5 billion, presenting huge opportunities for infrastructure and BM enterprises.

Industry Direction

According to Mr. Lê Trung Thành, Director of the Department of Building Materials, businesses must proactively innovate and apply advanced technologies, pursue digital and green transformation, and adopt circular economy models.

Strengthening investment cooperation, transferring technology and corporate management practices can help save resources, enhance productivity, improve product quality, and protect the environment.

Moreover, BM companies need to modernize production technologies and management methods to boost productivity, cut costs, diversify products to suit various building types and climates, and replace imports with domestically made products for both local and export markets.

The government’s Decision No. 1681/QĐ-TTg (dated December 28, 2024) to adjust and supplement the 2021–2025 public investment plan and 2024 investment allocation for ministries and localities is expected to spur public investment from early 2025.

Source: Thành Luân / kinhtedothi.vn
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