Plastic is commonly used to replace glass, metal, wood, leather, cloth… to produce more widgets which are widely used in daily life such as raincoats and pipes to the industrial products, with many advantages such as durability, lightweight, unbreakability, colorfulness… The plastic industry is one of the industries growing stably in the world over the past 50 years. The continual and stable growth of the industry results from the rise in global demand. Plastics production worldwide increased continuously over the past four years. The growth rate of the plastic industry is quite slow and slightly declined in 2012 due to impacts of the global economic recession. Till 2015, the growth rate of the industry in the world was 9%/year and it is predicted to continue increasing in following years. The development of final products such as packages, automobiles, and devices leads to the continual growth of the plastic industry in recent years. Furthermore, plastic production is projected to double in 20 years and quadruple by 2050.
Currently, packaging plastics is the biggest segment with 26% of the total output. In the period of 2000-2015, the share of plastic packaging in global packaging increased from 17% to 25% because the packaging market has an average growth of 5% per year. In 2015, , China ranked the first regarding production output, followed by the United States. Other countries accounted for only a small part. Thanks to abundant labor force, a collapse in the price of crude oil, rise in producing plastic consuming products such as automobiles, packages and building materials due to a surge in global demand, which facilitates plastic production in China to meet both domestic and export demand, China ranked the first regarding the value of both export and import.
Vietnam plastic industry has a great number of 4,000 enterprises using up to 200,000 labors, most of which gather in several provinces and cities in the South such as Ho Chi Minh, Binh Duong, Dong Nai, Long An and Ba Ria Vung Tau.
Over 80% of the total domestic companies are small and medium-sized enterprises with limited technology because more than 85% of devices and machines are imported. Many domestic businesses have still been using backward machinery and equipment and old production technology, most of which consumed a lot of energy and cause pollution. The value of products made with this technology is not competitive. Except for some big companies such as Song Long, Duy Tan, and Dong Tien, which renovated to apply technology and equipment imported from Germany, Italy, and Japan, all take little concern about unstable material sources as well as opportunities to cooperate with joint venture partners and to transfer to advanced technology. Therefore, products have low durability, poor design and are not competitive.
In the period of 2009-2016, domestic plastic production had compound annual growth rate of 11.0%. In the first three months of 2017, production was estimated increase 7.9% over the same period of 2016. Currently, manufacturing structure in Vietnam plastic industry is in an unbalanced situation. While other developed countries focus on technical plastic products, Vietnamese enterprises mainly focus on plastic household and packaging. Poor technology makes it difficult for Vietnamese enterprises to produce plastics products with high technical content as well as high added value such as plastic and construction plastics. Vietnam plastics industry also imports 80% the demand for all kinds of plastic because Vietnam has not enough capacity to manufacture. If this situation continues, enterprises may meet numerous difficulties. However, the outlook for Vietnam plastic industry in the coming years is still positive as plastic consumption per capita is projected to increase to 45 kg by 2020 and the real estate market will recover, boosting demand for plastics. The construction and trend of FDI inflow into Vietnam boosted the consumption of plastics.