Businesses are struggling to sell products in the second half of the year despite reports of decreasing inventories.

According to the Vietnam Cement Association, in the first half of this year, 29.5 million tonnes of cement were sold, 1.5 million tonnes higher than the same period last year. About 76 percent was for domestic use.

However, the association's president Nguyen Van Thien said that the increase did not reflect the recovery of the domestic market.

He said the growth was due to exports soaring 200 percent over the same period last year, while domestic sales decreased by 4 percent.

A recent survey by the Vietnam Chamber of Commerce and Industry (VCCI) revealed that nearly 70 percent of domestic companies have been unable to clear their inventories.

Truong Ngoc Minh, Deputy Director of Viglacera Tien Son, told Dau Tu (Investment) newspaper that his company must reduce production and deal with surplus inventory from the first half of the year. The company is now operating at only two thirds of its capacity.

According to the Vietnam Steel Corporation (Vnsteel), production output only reached 42 percent of the year's plan, reaching 675,900 tonnes, while the unsold volume was estimated to be more than 190,000 tonnes.

Vnsteel's general director Le Phu Hung said despite production cuts, inventory remained high due to low demands during the first six months of the year.

However, VCCI's survey said that the business and production forecasts are expected to increase in the second-half due to improvements in the Government's macroeconomic policies.

Dang Duc Thanh from VCCI urged companies to maximise capital through restructuring in order to reduce their reliance on bank loans. Capital should be raised through joint-ventures, issuing bonds or by withdrawing from non-core business.

Statistics from the Ministry of Industry and Trade showed that the inventory index for manufacturing and processing industries dropped from 19.9 percent to 16.5 percent in the February-March period, 13.1 percent in May and 9.7 percent in June.-VNA