Growing plastic industry faces challenges

The plastic sector has great potential for development but faces a number of challenges, according to the Vietnam Plastics Association.

The association expects the sector’s export value could at best grow 16 percent this year, but just 5.7 percent if it struggles to meet its full potential.

There is huge demand locally for plastics-while Japan , the US , Germany and Netherlands represent the main export market, it says.

Japan, Vietnam’s largest plastics export market, imported products worth 121 million USD last year. The US imported plastics worth nearly 100 million USD, while Germany imported 35 million USD worth of plastics. Other nations, in descended order of export value, were the Netherlands, Cambodia, the UK, France, Malaysia, China and the Philippines.

However, the sector’s total export revenue last year was just 802 million USD, down 13 percent on 2008.

According to the association, Vietnam now has 2,000 plastics makers employing 200,000 labourers. Last year, the local market was worth about 3.7 billion USD. The sector consumed roughly 2.5 million tonnes of plastic raw materials.

Around 85 percent of plastic materials for production are imported, particularly from Asian countries such as Thailand , China and Singapore . Costs for the materials usually account for 70-75 percent of the total sale price, according to the association.

The crude oil sector-the main supplier of material for plastic production-is expected to raise the barrel price to 80 USD, which will be passed on to plastics makers.

To reduce dependency on imports, the industry plans to produce 1.38 million tonnes of raw materials by the end of this year.

The average consumption per capita in Vietnam nearly doubles from 16 kg in 2006 to 28 kg last year. That figure is expected to reach 32 kg this year, the association says. However, these figures are low compared to other regional countries and developed nations, it reports.

Tags: Vietnam plastic, Vietnam plastic industry