Rock Construction Industry - Strong demand from 2H2020
Demand for houses in the Southwest region continues to be healthy. The demand for construction rocks in the Southwest region has been largely served by the Southeast mines in the past few years. Although over the past ten years the number of newly built houses and the number of square meters of built houses in the Mekong Delta region have always been higher than in the Southeast region, the percentage of households without a home in that region is still the highest in the country.
Public investment has shown signs of rising again. Although the transportation demand between the two areas of Ho Chi Minh City and Southwest region is high, only 40 km of expressways (Ho Chi Minh City - Trung Luong) has been built in the South among the total 1,000 km of highways in Vietnam. Understanding the necessary of infrastructure in the South, by the end of 2019, the Government closely instructed to secure capital for the Trung Luong - My Thuan Expressway project.
Rising demand for industrial park in 2021. Currently most countries are still reporting new Covid-19 cases, hence international flights routes have not been reopened. As a result, demand for industrial parks in the South is also affected. However, with a base case of Covid-19 being fully controlled this year and international flights being able to reopen gradually thereafter, the demand for leasing industrial zones may rebound sharply next year.
Replacing Tan Dong Hiep and Nui Nho quarries. According to our estimates, Tan Dong Hiep and Nui Nho accounts for about 10% market share of construction rock in the Southern region. However, after two successful renewals, the two quarries have officially stopped mining since the end of 2019. Currently, mining enterprises in these two areas such as KSB, NNC and C32 can only collect the leftover during the process of restoration of the environment. As a result, the supply from these two quarries will decrease in 2020 and 2021 and will completely disappear afterwards.
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