In a recent report by KB Securities Vietnam Joint Stock Company (KBSV), it is expected that domestic steel demand may begin to remain positive from the beginning of 2024 thanks to relatively low interest rates, supporting production and business activities, the low base level of steel prices stimulates consumption demand. Policies to remove difficulties for the real estate and civil construction markets, or potential from the export market have been rekindled.
So what actions are steel and construction materials businesses with products achieving “Vietnam National Brand” taking, and what values are being promoted from the program? Now, we will learn about this topic in a conversation with Mr. Vu Van Thanh – Vice General Director of Hoa Sen Group; Dr. Thai Duy Sam – Deputy President and General Secretary of Vietnam Construction Materials Association.
MC: Thank you very much to the experts for taking the time to participate in this program. For the first question, I would like to invite Mr. Thai Duy Sam. What kind of challenges are we facing for the steel industry in the last months of 2023 and the first half of 2024?
- Dr. Thai Duy Sam: In Vietnam’s current steel industry, most of its products mainly serve the construction industry. If the construction industry does not develop, the steel industry’s output will also be affected. Therefore, this is a huge challenge. Another problem is that US sanctions against Russia and other countries also affect the chains we export, especially Logistics. Although the Government has strongly urged, public investment disbursement still faces difficulties. For example, current highway projects lack sand materials for foundation. Therefore, current projects are under construction, leading to disbursement that is not as expected.
MC: Thanks for your comments. What about Mr. Thanh, from the business’s perspective, we have encountered many challenges from the beginning of the year until now. So where are the opportunities currently coming from?
- Mr. Vu Van Thanh: I assess that the Government’s determination in disbursing public investment in such a timely manner is a great source of stimulation for Vietnam’s economic growth. Secondly, we have a foreign investment. Accordingly, in the first 9 months of 2023, registered capital has reached more than USD 20 billion, while disbursed capital is more than USD 16 billion. Compared to last year, the growth is up to 2%. In addition, the Government and State Bank of Asia have implemented quite flexible monetary policy, thereby also creating conditions for reducing lending interest rates. This third quarter compared to the first two quarters of the year, it is clear that things are getting better.
MC: Dear experts, we are facing opportunities to recover in the last months of the year. Hoa Sen Group is an enterprise whose products have achieved National Brand recognition for many consecutive years. How have businesses prepared and invested to overcome difficulties and challenges and look at the opportunities that are opening up in the coming months?
- Mr. Vu Van Thanh: I think that all businesses that achieve National Brand have a sign that guarantees their competitive ability. For Hoa Sen Group, the first thing we must ensure is product quality and reasonable prices, ensuring competitiveness compared to other businesses in the industry as well as with imported products. As for the export market, Europe implemented a Carbon border adjustment mechanism in the last October. To implement it, there are two ISO certifications which should be met. Recently, we have also achieved these two ISO certifications. The first is ISO 14064-1:2018 on greenhouse gas inventory, the second is ISO 14067:2018 on tracing carbon footprints on products, ensuring full declaration according to the European Carbon border adjustment mechanism.
- Dr. Thai Duy Sam: As we know, Vietnamese National Brand is evaluated through three backbones: Quality, Innovation and Pioneering Capacity. As Mr. Thanh said that the typical example is Europe, they will assess the impact of the environment. We think that businesses also need to innovate more, for example, applying waste heat and waste heat in the production process for reuse. The second is the application of renewable energies such as solar energy or wind energy. Thanks to that, export is also more convenient and easier.
MC: How do you evaluate the National Brand’s guarantee for not only the steel industry but also the construction materials industry in general, when we bring products to domestic consumers, especially the export market in recent years?
- Dr. Thai Duy Sam: The Vietnamese National Brand has existed for 20 years, and the value of Vietnamese National Brand is increasingly appreciated by the world. Therefore, products and brands recognized as Vietnamese National Brands will have the advantage of gaining the trust of domestic consumers as well as the world market, supporting product consumption.
MC: Recently, we learn that Hoa Sen Group has established a sales model called Hoa Sen Home. Is this a new direction, opening up an opportunity when the market is experiencing new developments?
- Mr. Vu Van Thanh: Hoa Sen Home is our new direction with the idea of “all in one”, meaning this is a place that sells all construction materials to build a house. There are three products that we produce ourselves (steel sheet, steel pipes, plastic pipes), but for products produced by other suppliers, we will have to have an extremely strict selection process.
MC: So if this model is invested in by a Vietnamese National Brand enterprise, is it an opportunity for other businesses to join in?
- Mr. Vu Van Thanh: Surely. We greatly welcome construction materials manufacturers recognized as National Brands. It is a “Win-Win”, mutually beneficial relationship. Thanks to that, we will have a source of good quality goods, ensuring reputation, and for suppliers, there will be a sales channel to reach consumers. Suppliers will also be able to promote their brands through a well-organized supermarket system.
MC: As for Mr. Sam, what do you think, what opportunities are there for construction materials businesses?
- Dr. Thai Duy Sam: I find Hoa Sen Home to be a very good model and also very convenient for consumers. If I’m not mistaken, Eurowindow also proposed this model and established Melinh Plaza previously. But then it is not well developed. Now, Hoa Sen is building this model in the right direction. Because when a consumer visits Hoa Sen Home, they can buy all the things to build a house, helping them save time.
MC: Yes, thank the experts for spending your time on the program and I believe that with opinions from businesses and suggestions from experts, we will receive more positive signs from the steel market in the coming times. Thank you very much for taking your time to participate in this program.