Dong devaluation could leave plastic makers hurting

The recent devaluation of the dong combined with higher power costs could rob plastic enterprises of all or most of their profits, Le Quang Doanh, chairman of Viet Nam Plastics Association said.

Doanh said most of plastic enterprises were heavily dependent on imported raw materials, especially in PP and PE production.

Enterprises can’t rely on locally recycled plastics to cut import costs as the local plastics recycling industry is underdeveloped. For instance, Viet Nam doesn’t have a plastic waste collection system, he said.

In recent years, the plastics sector had growth rates of 20-25 per cent per year, but the recent increase in input costs would impact heavily on the operation and development of the plastic sector, the association chairman said.

Underdeveloped

According to association, Vietnamese plastic product export value accounted for a tiny 0.02 per cent of the global figure.

The export value is low because the limited number of products can’t keep pace with the changing demands of foreign importers. Plastic makers here are mainly subcontracted, the association said.

Most plastic makers are small enterprises that have to contend with foreign enterprises, which have strength of capital, technology and more experience.

In addition, management staffs, technicians and skilled workers are hard to find because no schools or centres offer skilled human resources training for the sector.

Experts suggested the association to encourage enterprises to improve product quality and invest in supporting industries. Large plastic projects should be exempted from tax, they said. — VNS

Tags: Vietnam plastics industry