Diversification to sustain rapid growth

Established in 1974, Vietnam Glass and Ceramics for Construction Corporation (Viglacera) quickly grew from a small company into a large corporation.

"With little financial backing from the government, we were able to create high turnover, capture the majority of the market share, build many factories for production, and now have over 18,000 employees," General Director Nguyen Tran Nam said.

"We see that success that started over 30 years ago continuing in the future."

Viglacera Corp has continuously expanded its business, diversified its products and increased its investment in modern equipment to improve product quality and master worldwide advanced technologies in the field of building materials production.

Viglacera is the pioneer in importing machinery to construct Vietnam's first building glass and ceramic plants that meet European standards.

With a constant annual growth rate of 30 percent, it has diversified into multi-sector development to become the leading group in trade and production of building materials in Vietnam, comprising more than 30 subsidiaries.

In 2000, Vietnam opened its market to foreign investors. Since then, Viglacera has changed its strategy to focus on infrastructure for industrial areas, tall buildings, and rental properties.

"Vietnam competes with China directly, as China is currently the largest producer and exporter in the world of industrial and construction materials," Nam said.

Every year more than 1 billion tons of cement, 2 billion sq m of ceramic tiles, and 150 lines of glass are produced in China.

"China exports to Asia, America, Africa, and Europe, so we compete with them around the globe," Nam said.

"Viglacera has invested in modern technology to produce high-quality products, stayed focused on good management practices and we offer low prices."

Viglacera sees an expanding and untapped market in China. The Chinese economy has developed mostly in the East and Southeast regions, while the transportation route from the East to the West of China still remains underdeveloped.

Recently the Chinese and Vietnamese governments have been in talks to set up the East-West Economic Corridor to facilitate the transportation of goods. Vietnam mainly exports foods and raw materials to China, but cannot yet export construction material.

"Our company is positive about its future in China. We are searching for new ways to access the Chinese market, and after the ASEAN plus one agreement we hope to export our products to West China," Nam said.

Market of the future

Viglacera is currently exporting to more than 20 countries, with the American market being the key future target.

"The demands of the American buyers are high - more than 220 million sq m of ceramics and glasses every year - and the American market produces less than half of its own demand," Nam said.

Chinese products exported to the United States have encountered several challenges recently. The price of raw materials in China has risen and the exchange rate between the yuan and the US dollar is also an issue as the export price of Chinese products continues rising - all making Vietnam's exports look more attractive.

"For American businesses, Vietnam is promoting its exports applying the 'China-plus-one' strategy of attracting trade and investment," Nam said.

"The expectations of American importers are quite high and in this situation they have to look for new exporters like Vietnam to become their long-term suppliers."

(Shanghai Start 09/03/2007 page2)