Thank you for Subscribing to Construction Business Review Weekly Brief
Steel Buildings in Vietnam Under Pestle Analysis
Steel buildings have become increasingly popular in Vietnam due to their flexibility, reduced labor costs, and technological advancements. However, the industry is also facing challenges that need to be addressed. In this article, we will analyze the steel building industry in Vietnam under the PESTLE analysis framework.
Political Factors
Vietnam relies heavily on China for its steel imports, with over 70% of the country's steel imports coming from China. However, this dependence on China has led to price volatility and supply chain disruptions in the past, which have affected the construction industry in Vietnam. To reduce its dependence on China, the Vietnamese government has been investing in domestic steel production and seeking alternative suppliers.
Economic Factors
The cost of steel structures in construction is generally higher than traditional structures made of reinforced concrete. However, steel structures are becoming increasingly viable for businesses as they offer greater flexibility for use and potential changes in purpose. Moreover, the reduced labor costs and time savings due to technological advancements in erection technology have made steel buildings a more attractive option for developers in Vietnam. For example, the Grand Plaza project in Hanoi, which comprises three 39-storey buildings, was built using a steel frame and was completed in just 25 months, whereas traditional construction methods would have taken much longer.
Social Factors
The trend of reducing human labor in the construction industry is gaining momentum in Vietnam. Steel buildings offer a solution to this issue as they require fewer workers during construction. Moreover, the flexibility of steel structures allows for a wide range of applications, from residential to commercial buildings. Steel buildings have become particularly popular in the retail and commercial segments, with notable examples including the Diamond Plaza in Ho Chi Minh City CBD.
Technological Factors
Advancements in technology have led to significant improvements in steel building construction methods, resulting in a reduction in on-site construction duration compared to traditional reinforced concrete structures.
These technological advancements have made steel buildings an increasingly popular choice in Vietnam. For example, the Royal City project in Hanoi, which comprises 12 high-rise buildings, was built using steel frames and was completed in just three years, whereas traditional construction methods would have taken five to six years.
Legal Factors
Temporary buildings are common in Vietnam, and steel structures are well-suited to this type of construction. The Construction Law 50/2014/QH 13 stipulates that temporary buildings must be demolished after their intended use has expired. Steel structures can easily adapt to this requirement and are suitable for temporary construction projects.
Environmental Factors
Short construction durations of steel buildings can have a positive impact on the environment, as they reduce the time and resources required for construction. However, the steel industry in Vietnam is known to cause pollution, which can have a negative impact on the environment. The Vietnamese government has been taking steps to mitigate this impact by investing in eco-friendly steel production methods.
Advancements in technology have led to significant improvements in steel building construction methods, resulting in a reduction in on-site construction duration compared to traditional reinforced concrete structures
Conclusion
In conclusion, the steel building industry in Vietnam has been gaining popularity due to its flexibility, reduced labor costs, and technological advancements. However, its heavy reliance on China for steel imports and environmental impact remain challenges that need to be addressed. The Vietnamese government has been making efforts to reduce dependence on China and invest in eco-friendly steel production methods. Steel buildings have become particularly popular in the retail and commercial segments and are suitable for temporary construction projects under Vietnamese law. With further technological advancements and sustainable practices, the steel building industry in Vietnam has the potential to grow and become a significant contributor to the country's construction sector.
