Plastics industry struggles to compete

Viet Nam has more than 2,200 enterprises involved in the plastic industry, of which 80 per cent are based in HCM City. Over the last decade, the industry has achieved an average growth rate of between 15 and 25 per cent per year.

However, Vietnamese plastic products are still less competitive than those of countries in the region and the world. One of the main reasons for this is that they are priced higher than similar products from China, while the quality is not consistent.

Vietnamese plastic makers now have to rely almost completely on imported raw material, and import costs often account for up to 70 per cent of production costs.

Worse still, this dependence has also resulted in unstable supply of raw material, impacting production and trading plans.

Many domestic plastic enterprises have found it necessary to use raw materials recycled domestically from plastic waste to reduce production costs and ensure stable supply of raw material.

In April, 2004 the former Ministry of Industry also approved a master plan on the development of the domestic plastic industry through 2010. One of the plan’s main objectives was to build plastic waste recycling plants in the hope of partly reducing the industry’s reliance on imported raw materials, as also to mitigate plastic waste’s impact on the environment.

For this plan, the Viet Nam Plastic Company (Vinaplast) would co-operate with Canada’s Merlin Plastics to set up a joint venture for the construction of two plastic waste processing plants.

The plants will have combined capacity of 100,000 tonnes per year and be located in the northern province of Hung Yen and the southern province of Binh Duong. However, the schemes to date remain on paper.

Vinaplast Deputy Director Dao Duy Kha said all necessary preparations for the construction of these two plants were made, but further headway had not been made because of a serious shortage of qualified plastic waste for processing. The volume of plastic waste dumped into the environment every day was very large but the collection system was not professional. Hence it did not meet both quality and quantity needs.

Vinaplast has asked the Government to allow import of qualified plastic waste to ensure adequate supply of materials for the two plastic processing plants when they are put into operation. However, one other problem was that there was no legal framework for the import of this kind of material, Kha said.

VIETNAMNEWS

Tags: Vietnam plastic, Vietnam plastic industry