Potential for exporting construction materials to Middle East

Nguyen Quoc Hai from the Vietnam Trade Office in Saudi Arabia made the statement at a seminar discussing the opportunities for exports to Middle Eastern countries, held in Ho Chi Minh City on June 25.

Experts said that Saudi Arabian businesses have tended to drift away from the traditional export markets of the US and European Union (EU) in favour of the emerging markets, including Vietnam, in recent years.

One of the appealing attributes of the Saudi Arabian market is that it is one of countries which impose the lowest tax on imports. All imported products are assessed a conservative low 5% tariff across the board.

In addition, the country does not introduce an income tax or valued added tax (VAT).

Each year the country requires around 60 million tonnes of cement and 25 million tonnes of construction steel to satisfy its construction needs. Given the market is there, Vietnamese businesses need to devise the proper strategy to access and penetrate it.

Tran Quang Huy, head of the Africa, West Africa, South Africa Market Department, said most Middle East countries have a high demand for construction materials, such as the UAE, Iran, Oman and Turkey for cement, the UAE, Turkey and Iran for steel, and Turkey for sanitary ware.

In addition, due to the climate in the region, these markets do not have adequate timber and wood materials and must, of necessity, rely heavily on imports of these products.

Meanwhile, consumers in these markets are keen on wood furniture, products that Vietnamese businesses are fully capable of competitively providing.

However, Vietnamese businesses should be prudent to carry out their market research, and particularly careful about marketing and promotion campaigns as Middle East cultures tend to be sensitive to religion and a number of social issues, Huy warned.

Export products must also comply with rigid quality and packaging standards as well as a host of environmental protection and consumption regulations, he said.

Furthermore, Vietnamese businesses should be proactive in the competitive bidding processes in the Middle East. 

They are advised to make contact with agencies inviting bids for construction projects or bid winners to exchange and boost the export of construction materials and timber products to these markets.