Seminar talks up construction industry growth potential

The real estate sector is expected to enjoy another bumper year in  二0 一 八. — VNS Photo

HCM CITY — The construction industry enjoyed strong growth last year and is expected to maintain the momentum this year too, experts have said.

Speaking at a seminar on the development potential of the Vietnamese construction industry in  二0 一 八 held in HCM City on January  二, economist Đinh Thế Hiển said the industry’s high growth rate in the past  一0 years -- with its revenues going up from US$ 一. 二 billion in  二00 七 to nearly $ 一 三 billion last year - had been supported by economic recovery, the Government’s investment in infrastructure and housing, and the liberal issuance of building permits.

Last year the real estate sector had the largest number of new businesses followed by the construction sector.

Among listed companies, construction companies had among the highest growth rates in terms of revenues and profits in  二0 一 五- 一 七, Hiển said.

The strong FDI flows and mergers and acquisitions deals in the real estate sector at the end of  二0 一 七 would push up demand for infrastructure and construction of housing and factories, which would give the construction industry a boost this year, he said.

Bùi Quang Tín, CEO of Bizlight Business School, said according to the Ministry of Transport, Việt Nam needs $ 四 八 billion for infrastructure development in the next five years.

The strong recovery by the property sector in recent years has meant construction companies have their order books always full, he said.

“Previously, domestic construction companies had worked for foreign contractors, but now we dominate the construction market.”

Some companies like Hòa Bình Corporation have even bidden for foreign construction projects as engineering, procurement and construction (EPC) contractor, he said.

Nguyễn Văn Hiệp, former director of the HCM City Department of Construction, said the country’s construction companies now have advanced engineering and construction know-how.

He urged them to expand their operations abroad, warning that if one day the domestic property market slumps, the construction industry would "die".

The Government should have policies to encourage construction firms to go abroad, he added.

Lê Viết Hải, vice chairman of the Việt Nam Association of Construction Contractors, said the revenue of global construction industry reached an estimated $ 一 一 trillion last year.

If local builders go abroad to work and earn  一 per cent of this amount, that would be worth billions of dollars, he pointed out.

There is a huge opportunity for the firms to go abroad because the construction cost in other countries is around $ 二,000 per square metre, but it is only $ 五00-$ 一, 二00 in Việt Nam, he said.

In addition, Vietnamese firms are no less competent than their foreign counterparts in the construction of high-rise buildings and have gain great trust among foreign investors, he said.

For instance, Hòa Bình Corporation has won two bid packages in Kuwait and also been contracted for construction in Malaysia and Myanmar, he said.

Hải said the association has submitted a proposal to turn the export of construction services into a key economic sector.

It is necessary to go abroad when local enterprises are qualified to do so, he added. — VNS