Foreign groups try to conquer building material market

13.12.2016

VietNamNet Bridge – After a period of aggressive acquisitions of troubled Vietnamese enterprises, foreign companies have begun increasing their investments in Vietnam.

A series of foreign companies in the building material sector announced their business performance results and new investment projects in Vietnam in the second half of the year. 

SCG from Thailand said sales in Vietnam did not see a sharp increase in the last months compared with the same period last year, but the situation was very positive. 

The revenue in the first three quarters of 2016 reached $500 million, while the group’s total assets in Vietnam increased by 5 percent to $902 million. 

After cementing its position in the building material market, the group jumped into the packaging industry. In mid-November, Kraft Vina, an SCG subsidiary, put a new production line with capacity of 243,500 tons per annum into operation in Binh Duong province.

Declining to give exact figures about the revenue, French Saint-Gobain said that Vietnam is a market with great potential which made a big contribution to the group’s revenue of $3 billion in Asia in 2015.

In early November, a new factory opened making glue products used in construction and waterproofing products with capacity of 100,000 tons a year in HCMC.

Javier Gimeno from Saint Gobain said the inauguration of the factory in Vietnam shows the French group’s confidence in the great potential of the Vietnamese building material market.

Sherwin-Williams’ pain products have been available in Vietnam for years through TDD Vietnam, a distributor. However, a source said Sherwin-Williams is considering building a factory and organizing production in Vietnam in the time to come, and that media campaigns will be launched early next year. 

Merger & Acquisition (M&A) experts commented that foreign conglomerates, which have noted signs of recovery of the real estate market, are planning big M&A deals in order to increase their production capacity and expand market share.

In 2011, SCG spent $5.5 million to buy a 99 percent stake of the Buu Long Cement Plant in Dong Nai province and upgrade it. Later, it bought a 85 percent stake of Prime Group, a well-known tile brand with 20 percent market share. 

At the same time, Indonesian Semen Gresik took over a 70 percent stake of Thang Long Cement JSC in a deal worth $230 million. In 2015, Saint Gobain took over control over Vinh Tuong Company raising its ownership ratio from 14.8 percent to 57 percent.

Roongrote Rangsiyopash, President and CEO of SCG, said in late October that the demand for building materials in SE Asia was stable and remained high, especially for cement. Therefore, SCG is continuing to speed up outward investment activities as planned.

 

Source: Vietnam.net

Photo: CBR Investment AG