The caustic soda industry is considered one of the key industries of the chemical industry. Caustic soda is the input and raw material of many important industries. Typically such as the paper industry, detergent production, aluminum production, textile dyeing industry,…
Overview of Vietnam’s caustic soda industry 2023
The caustic soda industry is considered the mainstay of the basic chemical industry.
Basic chemicals are a classification of industrial chemicals:
- Basic chemicals are known to be the most commonly produced product categories in the chemical industry.
- Common base chemicals will not be used directly. Basic chemicals will become input materials for various industries. Therefore, it has a great influence on the development of industries.
- There are 3 types of basic chemicals most prominently: industrial gas, caustic soda, sulfuric acid, and yellow phosphorus. In which the caustic soda industry is an important industry and provides inputs for many other industries.
The importance of the caustic soda industry
The basic chemical industry in Vietnam only provides 50% of the domestic demand. To achieve the development plan by 2025, basic chemicals are the planned industry group. In which, emphasis is placed on the development and production of a number of key basic chemical industries such as caustic soda. Production of caustic soda is invested in production with a total capacity of 900,000 tons/year.
Caustic soda is an important source of raw materials for basic industries such as paper production, detergent production, aluminum production, textile industry, dyeing industry, etc. However, the caustic soda industry in Vietnam is still low. Caustic soda in Vietnam is usually produced by electrolysis of salt solutions. Then, along with the amount of caustic soda, we will have an amount of chlorine and hydrogen. Residual chlorine gas is commonly used in the petrochemical industry. In Vietnam, the petrochemical industry has not been able to absorb all this chlorine gas.
Source: VIRAC’s Report
Some plants use other ways to neutralize residual chlorine, such as using calcium. Even so, caustic soda factories in Vietnam still have modest output. The supply of caustic soda in Vietnam has not yet met the domestic demand. Our country still has to import a large amount of liquid caustic soda abroad. But because caustic soda is an important industry, it is still industrially protected today. Soda is taxed on imports from 5-20% to give priority to the use of domestically produced caustic soda.
With the requirement of developing other manufacturing industries such as aluminum production, PVC plastic production, paper production, etc. The petrochemical industry is also being focused on development. Typically, factories have been put into operation such as Nghi Son Refinery and Petrochemical Complex, Dung Quat Oil Refinery. At the same time, the production of caustic soda will also be invested and developed.
Production capacity of enterprises in Vietnam’s caustic soda industry
According to the latest data in VIRAC, currently in Vietnam there are some typical enterprises producing caustic soda:
- Vedan Vietnam Company’s factory produces caustic soda: 80,000 tons/year
- Bai Bang Paper Factory produces caustic soda: 10,000 tons/year
- Viet Tri HVT Chemical Factory produces caustic soda: 40,000 tons/year
- CSV Southern Basic Chemical Factory produces caustic soda: 40,000 tons/year
- Dong A Chemical Factory produces caustic soda: 18,000 tons/year
In the production of caustic soda, brine electrolysis by ion exchange membrane is still the most modern technology. Most of the caustic soda factories use this technology. However, at present, the factories have not fully promoted their caustic soda production capacity. The supply of caustic soda in Vietnam is still heavily dependent on imports.
Source: VIRAC’s Report
Outlook of Vietnam’s caustic soda industry 2023
Outlook of Vietnam’s caustic soda industry supply:
According to VIRAC’s report, China supplies approximately 40% of Vietnam’s imported caustic soda. So the price of caustic soda depends on the situation of China’s caustic soda production. After some caustic soda factories reopened at the end of 2022, China’s caustic soda price fell 27%. From now until the end of the year, more caustic soda factories in China will be back in operation. The source of caustic soda from China will improve the limited supply of caustic soda in Vietnam.
Outlook for caustic soda industry demand:
The demand for caustic soda is forecasted to increase in the near future. This is due to the strong demand for aluminum production. Aluminum prices peaked and many aluminum factories went into operation. This helps to increase the demand for caustic soda in the aluminum production process. The domestic consumption growth rate of the caustic soda market in 2023 is expected at 8-9%.
Outlook for caustic soda producer profit:
Both supply and demand are favorable for the development of the caustic soda industry. However, profits for caustic soda producers are not very promising. The reason for this is that the production cost of caustic soda in Vietnam is still high. The price of caustic soda in Vietnam still cannot compete with the price of imported soda from China. Add to that an increase in production costs due to higher electricity costs in 2023.
Sustainable direction for Vietnam’s caustic soda industry
Sustainable direction 1: Applying technology to production:
Applying technology to production is a very important and necessary thing in industries. In order to adapt to the continuous development of technology and the increasing demand of the market, many enterprises have invested in technology for production. Some soda production companies have applied technology to production, bringing higher efficiency: Dong A Joint Stock Company invested in modern production lines to increase the capacity of key products such as NaOH to 18,000. tons/year, HCl reaches 20,000 tons/year, Javen reaches 2,400 tons/year. Vietnam Paper Corporation has ensured NaOH production to reach 80 tons/year.
Thanks to the application of technology, Dong A Joint Stock Company has grown tremendously to become one of the four largest soda-chlorine producers in Vietnam. To develop sustainably in the market, caustic soda producers need to continue to learn, improve and apply technology in production.
Sustainable direction 2: Towards a green industry
As a chemical industry, the caustic soda industry also has negative impacts on the environment. Producing caustic soda consumes a lot of electrical energy and can release harmful substances. The caustic soda industry has been facing major environmental and social challenges. Typically, the caustic soda industry can generate solid waste in the production process from salt water. This can be harmful to the environment.
The caustic soda production enterprises need to take measures to prevent or minimize the generation of solid waste. And for solid waste management from caustic soda plants, plants are recommended:
- Try to find reuse options for solid waste from female brine refining. If this waste must be disposed of, consider the use of natural storage.
- Choose limestone with high CaCO3 content. It has suitable physical properties and limited content of heavy metals and other impurities.
For sustainable development in the chemical industry, deeper intervention and protection from state agencies is needed. Agencies should have policies to overcome the overlapping and lack of coordination at all levels. At the same time, focus on directing, supporting and removing legal difficulties for businesses. Building a system of preferential policies for businesses when facing difficulties. However, management agencies also need to take measures to strictly handle violations of production and environmental protection. This will create a good environment for businesses to develop sustainably.
The above information is updated from the “Report of the chemical industry in the first quarter of 2023“. The report provides full information on macroeconomics, supply and demand for export trade of the chemical industry in Vietnam and in the world. Specifically about the small branches of the chemical industry such as fertilizers and nitrogen compounds, synthetic rubber and primary plastic resins, detergents, paints and printing ink, plant protection drugs, and basic chemicals. The report also provides relevant information and forecasts from the most up-to-date data.
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