The Ministry of Construction has been assisting the local building material market in dealing with low consumption and large stockpiles, a ministry official has said.

Le Van Toi, head of the Building Material Department, said to solve difficulties related to consumption, the ministry had drawn up many programmes to consume cement and other building materials, including one to build concrete roads and others on promoting construction of social houses.

At present, building material stockpiles stood at 2.95 million tonnes, Toi said.

The ministry had also proposed local construction enterprises to promote the use of domestic building materials, he said.

Additionally, the Government should have policies on reducing lending interest rates to 12 per cent per year and waiving value-added tax for building material production from six months to one year, he added. Meanwhile, enterprises should come up with solutions to overcome the difficult period, he noted.

At present, Nguyen Van Sinh, deputy director of Viglacera Corporation, said the company had given priority to making synchronous building material products for building social houses and medium-class and luxury apartments.

The corporation has promoted the reduction of production costs, expanded distribution systems and increased exports, he said.

According to the General Statistics Office, the price index of building materials in April reducd 0.44 per cent against last moth, but local purchasing power was still weak.

Since early this year, Sinh said, his company's consumption of building materials reached 65 per cent of its production capacity because of impacts from tightening policies on credit and public investment and low demand on building after the Tet holidays.

High input costs, including coal prices and high lending interest rates, had pushed Viglacera's production costs up, Sinh noted.

Therefore, since after the Tet holidays, subsidiaries of Viglacera had stopped parts of production or full production to reduce output, but stockpiles remained high, he said.

Tran Thi Van, owner of a building materials shop in Ha Noi said since December 2011, consumption of building material dropped by 40 per cent against the previous period. So, her shop had reduced purchases of new products to decrease stockpiles. Van hoped the Government would help reduce taxes and promote trade to increase consumption.

Source: VNS