Eco-construction pulls new market

A Ministry of Construction circular requiring state-funded construction projects to use eco-friendly building materials is expected to lure foreign investors into this sector, bringing with them equipment and products new to the market. 

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New circular urging green urban construction will see materials in high demand in 2018

Tran Quoc Thai, a Ministry of Construction official, has just returned to Vietnam from a working trip in Europe, where he met with several French firms eyeing opportunities to establish new companies or sell eco-friendly building materials in Vietnam.

Thai said that apart from growing demand for these products, the firms he met are significantly interested in the country’s new ecological regulations – whereby the use of eco-friendly building materials is compulsory for state-funded construction projects.

“The government annually uses tens of billions of US dollars from its budget to build state-funded works,” Thai, vice head of the Ministry of Construction’s (MoC) Department of Urban Development, told VIR. “Foreign firms are particularly interested in this new regulation, because the conditions are more transparent than the old ones issued in 2012.”

Two weeks ago, MoC issued Circular No.13/2017/TT-BXD, effective from February 1, 2018, on the use of eco-friendly building materials in construction works. Under the circular, all state-funded construction works must be built with these materials. Construction works invested by loans of state-owned enterprises that are 30 per cent higher than their total capital must also follow suit. In addition, state-funded buildings with nine storeys or higher must use 80 per cent eco-friendly materials in their construction.    

In Hanoi and Ho Chi Minh City, 100 per cent of construction works must use eco-friendly building materials. However, the rate is only 70-90 per cent in third-grade urban areas, with populations of at least 6,000 people per square kilometre.

All construction projects already approved or licensed before Circular 13 comes into force are to be built in accordance with the approval or the licence.

Under the circular, eco-friendly materials refer to concrete brick, light material (such as autoclaved aerated concrete and panels or foam concrete), gypsum panels, brick made from construction waste, and industrial waste.

Several foreign firms told VIR that they are deeply interested in the new circular. Ditaka Tippawam, vice chairman of Thai laminate maker Greenlan Asia Co., Ltd., said that because the circular will force all state units to build their works with eco-friendly materials, this will spark huge demand for them, many types of which are not produced by Vietnamese firms.

Greenlan is planning to “open a representative office in Vietnam before thinking about opening a factory in the country to produce anti-bacterial laminates, whose materials will be imported from Europe. Products will be both locally consumed and exported,” Tippawam said.         

Liu Dong, from Chinese wooden and glazed tile maker Building Material (Thailand) Co., Ltd., said that the firm is also planning to open a representative office in Vietnam before officially establishing a factory here. The company’s representatives will come to Vietnam to work with authorities of Hanoi and Ho Chi Minh City first.

“We see that over the past  few years, Vietnam’s government has ordered the use of eco-friendly building materials for several types of construction works. However, Circular 13 makes it more definitively mandatory and Hanoi and Ho Chi Minh City will surely have to obey it,” Dong said. “Vietnam’s market size is not big now, but will become very big over the next five years.”

In another case, Thai ceramic and tile maker Ceramiques is also planning to do business in Vietnam.

“We will export more than 40 types of high-quality porcelain products next year. One of the main reasons behind our plan is that most of the products made by Vietnamese companies are not as good as our products, while the customers have become more selective about their building materials,” said Ceramiques representative Rosucon Kosijaronkul.

MoC’s Thai has also met with leaders of many foreign firms in Vietnam, who expressed interest in Vietnam’s eco-friendly building materials market.

“However, the most important thing now is how localities will obey Decree 13. Gradually, the use of baked brick will be limited, and the demand for new materials will soar,” Thai said.

According to Circular 13, MoC will combine with other relevant ministries and agencies to inspect the usage of eco-friendly materials in all state-funded construction works nationwide. This job will also be performed by provincial and municipal people’s committees.

“All violators will be punished under the existing law and regulations,” the circular reads.


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