In 2010-2015, Plastic industry is one of the fastest growing ones in Vietnam, ranking 3rd after Telecommunication and textile. Some segments of the industry even had 100% growth rate. Accordingly, Vietnam plastic industry is considered one of the most dynamic ones in the country.
Until recently, the biggest expectation of Vietnam plastic industry are 3 FTAs, including Vietnam-Europe (EVFTA), Trans-Pacific Partnership (TPP) and RCEP. Vietnam’s plastic companies have always maintained their growth rate of about 11% for the last 5 years. In 2016, the expected rate is 15%. The stable and high growth rate of Vietnam’s plastic industry attracts major companies participating in Vietnam. There are currently 1.500 plastic companies operating in Vietnam with the number of domestic companies takes up 85%.
Mr, Ho Duc Lam, president of the Vietnam Plastic Association (VPA) announce that the growth rate of the Vietnam plastic industry is 16-18% annually, only lower than textile and telecommunication. However, the figure is only about half of numbers in countries such as Thailand, Malaysia, Indonesia. However, Vietnam will benefit from TPP because it only require the products to be produced in Vietnam but the materials.
Furthermore, Vietnam’s companies should focus on products with high added value and will be needed in the future, typically the plastic with high technology required. This needs a serious investment in physical capital and technology.
According to Vietnam Industry Research and Consultant (VIRAC), until now, Vietnam has exported plastic products to more than 160 markets in the world. However, it is raising concern as Vietnam still needs to imports 80% of the input materials for the plastic industry, equivalent to 3.5 million tons of materials while domestic supply can only supply 900.000 tons of materials
In 2020, it is expected that the plastic industry will need 5 million tons of input material for operation. However, the unsustainable supply of input materials and low supportive technologies make the plastic industry remain underdeveloped. Annual input materials account for 70-80% of the total materials, resulting in the decrease in competitiveness, exporting companies cannot take advantages of tax advantages due to the required certificate of origin.
Plastic production and consumption in Vietnam are growing faster: In recent years, Vietnamese plastic sector is highly appreciated in development speed compared to other ASEAN countries (standing No.2 behind Thailand with the capacity reaches 4.2 million tons/year).
Plastic export activities dramatically increase: Not only to serve domestic market but also to boost export operations. Main export markets currently are Japan, America and several European countries. In 2014, industry’s export turnover reached 3 billion USD, averagely increasing by more than 29% since 2009. Notwithstanding, export turnover in 2015 obtained only 2.4 billion, falling by 20% compared to 2014.