HCM CITY — Most construction material traders in HCM City say they are willing to cut prices and suffer losses in order to stimulate consumption and clear their inventory.
Under pressure caused by frozen real estate market, high inventory and capital shortage, they have endured the "worst situation in a long time." they said.
Many traders are unable to pay wages, rents as well as utility bills.
A trader from District 3 estimates that consumption of steel and cement in the last few months has declined by 50 per cent over the same time last year.
Sales of other materials like brick and tiles has gone down by 40 per cent over last year, he said, adding most traders were ready to cut prices and even accept losses to stimulate sales.
The owner of the Nam Thanh Vinh steel store in District 3 said they had reduced prices by around VND2 million (US$95) per one tonne.
Another shop in District 10 said they were organising frequent promotion programmes to attract customers. For instance, customers buying enameled tiles in large volumes could get 10-12 per cent discounts.
However, these promotions have not improved sales.
Tran Van Huynh, chairman of the Viet Nam Construction Materials Association, said the current economic condition had badly affected member firms.
Construction material manufacturers had to reduce or stop production because input costs have risen 20-30 per cent over last year, he said.
He added the association has asked the Government to expedite construction projects and reduce value added tax on construction materials in order to help the industry survive.
In the first half of 2012, cement inventory volumes reached 2.8 million tonnes, while the steel industry had stockpiled 370,000 tonnes. — VNS