Vietnam's leading construction materials maker Viglacera projects 21% revenue hike in 2025

Viglacera, Vietnam's leading producer of building materials, targets VND14.44 trillion ($555.12 million) in revenue for 2025, up 21% from last year.

Its pre-tax profit is expected to reach VND1.74 trillion ($66.89 million), an increase of nearly 7%.

These targets were approved at the company’s 2025 AGM held in Hanoi on Wednesday. Viglacera is listed on the Ho Chi Minh Stock Exchange (HoSE) as VGC.

CEO Nguyen Anh Tuan said the company’s modest 7% profit growth target for 2025, despite a 21% revenue jump, is due to impacts of U.S. reciprocal tariffs on foreign investor interest. Meanwhile, industrial park development costs are climbing, driven largely by a surge in sand prices.

“Previously, Viglacera spent VND200,000 ($7.69) per cubic meter for site leveling, now it’s risen to VND300,000 ($11.53). And when sand prices go up, so do steel prices,” he said. “So while foreign investor interest is already shrinking, costs for industrial park development projects are also rising sharply.”

Regarding the housing segment, Tuan noted positive developments in the real estate market, citing Resolution 171 of the National Assembly, Vietnam's legislature.

The document allows commercial housing projects to proceed through land-use rights agreements not directly related to the 30% special consumption tax on a pilot basis, as well as Resolution 201, which introduces special pilot mechanisms and policies to boost social housing development.

Given this, Viglacera has revised its 2025 business plan to better reflect current conditions.

“If the U.S. continues to impose steep reciprocal tariffs on Vietnam, we will shift our investment focus toward the housing segment,” Tuan said. “At the same time, we will concentrate more on production of building materials.”

Specifically, in the industrial park segment, Viglacera said it will continue developing projects with cost advantages, such as Song Cong II in Thai Nguyen province, northern Vietnam, and Doc Da Trang in the south-central province of Khanh Hoa. These projects benefit from on-site leveling conditions, eliminating the need to purchase sand.

“Thanks to this, construction costs will be lower,” Tuan said. “Viglacera will invest ahead of demand in the coming years.”

However, revenue from industrial park land rental - Viglacera’s biggest profit driver - is projected to fall by about VND400 billion ($15.38 million) in 2025. Offsetting that, the company plans to boost revenue from its building materials segment.

“The profit contribution from building materials remains lower than that of industrial park land,” Tuan said. “That’s why we’re targeting 21% revenue growth but only a 7% rise in profit. We’re also focusing on restructuring the building materials segment to improve margins, especially after a challenging 2024 for the industry.”

Contingency plan for tariff risks

Deputy CEO Tran Ngoc Anh said tariff concerns are already affecting investor sentiment, particularly among traditional partners from Japan, South Korea, Taiwan, and the broader Asian region.

“Many of these firms are reassessing their manufacturing operations, while prospective investors are taking a more cautious approach to new projects,” he noted.

Anh said Viglacera is closely monitoring ongoing U.S.-Vietnam tariff negotiations and expects duties to ease to around 20-25%.

“As a first step, we’ve engaged with industry associations and foreign investors to exchange insights, assess the situation, and provide support,” he noted.

Despite the current challenges, Anh believed Viglacera retains key advantages, saying the company is focusing on clients whose exports are less exposed to the U.S. market.

In addition, Viglacera currently has more than 600 hectares of industrial land with complete legal documents and site clearance ready for lease. It has also established a one-stop support unit to help secondary investors streamline operations and bring products to market faster.

In the long term, the company aims to upgrade its industrial parks with a focus on green development, smart infrastructure, and digital transformation to enhance competitiveness, thereby improving its ability to attract high-quality investment.

Another key topic raised by shareholders at the meeting was the progress of state capital divestment at Viglacera, and whether Gelex, a leading industrial corporation in Vietnam, has plans to increase its ownership stake.

Addressing shareholder concerns, Viglacera chairman Nguyen Van Tuan said the Ministry of Construction has been actively supporting the company in the state capital divestment process.

He noted that Gelex Infrastructure JSC, a subsidiary of Gelex Group, and Viglacera have actively engaged with a number of suitable investors to bring in strategic shareholders, but many remain hesitant due to concerns over tariffs and stock valuation.

“We’ve committed to holding a controlling 51% stake and currently have no plans to increase our ownership in Viglacera. Following shareholder approval, we will carry out comprehensive restructuring to ensure its sustainable growth,” he said.

“As for profits in the current phase, we acknowledge there will be challenges. Industrial real estate operates in cycles, and we are proactively adapting and repositioning to align with market conditions.”

At the meeting, shareholders approved a key proposal outlining Viglacera’s strategic development roadmap for the next phase. The plan focuses on several core priorities, including advancing growth in building materials and real estate, streamlining organizational operations, and strengthening capabilities in R&D, marketing, and sales.

At the meeting, shareholders approved the resignation of chairman Nguyen Van Tuan from the board of directors and elected Tran Manh Huu as a new board member.

Following the meeting, the board elected Huu as chairman for the 2024–2029 term.

On the Ho Chi Minh Stock Exchange (HoSE), VGC closed Tuesday at VND43,750 ($1.68) apiece.