VietNamNet Bridge - The investment rate for an unburnt brick factory is high, while the expected profit is low and the market unstable.

The Ministry of Construction has estimated that Vietnam would need 42 billion bricks for construction works by 2020. The government has decided that the building material industry will gradually be shifting to ‘clean production’.

Unburnt building materials are light, heat insulated, fireproof, compressible, easy to  use, and allow reduction of construction time and save materials and investment costs.

However, with the current production capacity, the total number of burnt bricks to be churned out in 10 years may reach 330 billion. In order to have this output, 500 million cubic meters of clay will be needed, equal to 25,000 hectares of fields. 

The production will consume 40 million tons of coal and will produce 148 million tons of toxic gas.

When the real estate market froze, a series of burnt brick workshops had to shut down or run at half of the designed capacity.

As the market has warmed up, the burnt brick price has escalated in recent months. In HCM City and Ba Ria – Vung Tau province, the price has surged by 30-50 percent.

The market recovery has prompted investors to resume burnt brick factories, which do not require high investments, and have prices competitive with unburnt products.

Analysts have warned that the real estate market recovery, plus the increased demand for building materials, may lead to the ‘unfired brick factory boom’, which will once again raise worries about the danger to the environment.

While investors can easily build burnt brick factories because of the low investment rate, they have to think carefully when deciding to build an unburnt brick factory because of the high investment capital and unstable profit.

A report showed that there are 23 factories in the country which make unburnt building materials. The total output of the factories just accounts for 17-18 percent of total building materials used.

Tran Van Huynh from the Vietnam Building Material Association, said that unburnt bricks were used by the modern construction industry.

Meanwhile, the government has decided that unburnt building materials must account for 40 percent of total building material output by 2020. 

Third- and higher-end urban areas have to use 100 percent of unburnt materials from 2013, while the required proportion is 50 percent for other areas. After 2015, unburnt materials must be used for 100 percent of construction works.

However, in 2014, unburnt materials were used for only 179 construction works in HCM City. Some contractors hesitated to use unburnt materials because these materials required new methods and instruments for the execution.

NCDT