REPORT ON VIETNAM PLASTIC INDUSTRY - Consulting and Research Company for Technology Transfer and Investment

Consulting and Research Company for Technology Transfer and Investment

REPORT ON
VIETNAM PLASTIC INDUSTRY

Hanoi, August 2013

1


TABLE OF CONTENTS
LIST OF TABLES..............................................................................................................................4
1.

INTRODUCTION......................................................................................................................5

2.

CURRENT SITUATION OF VIETNAM PLASTIC INDUSTRY............................................7

3.

2.1.

Arrangement and distribution of Vietnamese plastic enterprises........................................7

2.2.

Output..................................................................................................................................9

2.3.

Market and Export capacity...............................................................................................10

2.4.

Material sources.................................................................................................................12

2.5.

Machinery and technology................................................................................................15

2.5.1.

Machinery..................................................................................................................15

2.5.2.

Technology.................................................................................................................17

2.6.

Labor..................................................................................................................................18

2.7.

Development orientation and policy for plastic industry to 2020.....................................20

2.7.1.

Development orientation............................................................................................20

2.7.2.

Gross output targets of plastic industry......................................................................20

2.7.3.

Value added targets of plastic industry.......................................................................21

2.7.4.

Production targets of plastic products........................................................................21

2.7.5.

Plastic industry products proportions targets.............................................................21

2.7.6.

Plastic industry products export targets.....................................................................21

2.7.7.

Development master plan to 2020..............................................................................22

2.7.8.

PP import tax..............................................................................................................22

SURVEY ABOUT PLASTIC PROCESSING TECHNOLOGIES IN VIETNAM.................24

3.1.

Introduction.......................................................................................................................24

3.1.1.

Survey objectives.......................................................................................................24

3.1.2.

Survey objects............................................................................................................24

3.1.3.

Survey tools................................................................................................................24

3.1.4.

Survey process...........................................................................................................25

3.2.

The survey’s main results..................................................................................................25

3.2.1.

Type of ownership......................................................................................................26

3.2.2.

Activity area...............................................................................................................26

3.2.3.

Type of business.........................................................................................................27

3.2.4.

Activity scope.............................................................................................................27

3.2.5.

Staff............................................................................................................................28

3.2.6.

Turnover.....................................................................................................................29

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4.

3.2.7.

Export Capacity..........................................................................................................30

3.2.8.

Current situation of processing technologies.............................................................31

3.2.9.

Plans for purchasing machine, equipment in next two years.....................................34

CONCLUSION........................................................................................................................35

3


LIST OF TABLES
Table 1. Distribution of companies by geographical area...............................................................7
Table 2. Distribution of companies by product category.................................................................8
Table 3. Plastic output and consumption index...............................................................................9
Table 4. Output of plastic products by main categories...................................................................9
Table 5. Export turnover during the period 2006 – 2012..............................................................10
Table 6. Export turnover by region 2008-2012 (thousand USD)..................................................11
Table 7. Export turnover by country 2008-2012 (thousand USD)................................................12
Table 8. Quantity and turnover of imported material in 2008-2012..............................................13
Table 9. Production capacities of some big domestic companies..................................................13
Table 10. Plastic materials imported into Vietnam........................................................................14
Table 11. Plastic machinery market size........................................................................................15
Table 12. Rubber and plastic machinery (HS 8477). World exports to Vietnam...........................16
Table 13. Imported machines for plastic manufacturing...............................................................18
Table 14. Labor of plastic industry................................................................................................19
Table 15. Gross output targets of plastic industry.........................................................................20
Table 16. Added value targets of plastic industry..........................................................................21
Table 17. Production targets of plastic products............................................................................21
Table 18. Plastic industry products proportions targets (unit: %).................................................21
Table 19. Plastic industry products export targets.........................................................................21

Table 20. Development master plan in 2011 -2015 period............................................................22
Table 21. Development master plan in 2016 -2020 period............................................................22
Table 22. PP import tax.................................................................................................................22
Table 23. Distribution of surveyed enterprises by type of ownership...........................................26
Table 24. Distribution of surveyed enterprises by region..............................................................26
Table 25. Surveyed companies by form of ownership..................................................................27
Table 26. Survey companies by type of plastic products manufactured........................................28
Table 27. Surveyed companies by employees categories and form of ownership........................29
Table 28. Survey companies by turnover in the last three years (2010, 2011, 2012)....................30
Table 29. The ratio of exported product on total year production.................................................30
Table 30. Ratio of plastic technologies being used in surveyed companies..................................31
Table 31. Surveyed companies by machine exporters...................................................................31
Table 32. Surveyed companies by turnover category and new machines purchased....................32
Table 33. Surveyed companies by form of ownership and new machines purchased...................33
Table 34. Plans for purchasing machine, equipment in the next two years...................................34

4


1. INTRODUCTION
The plastic industry commenced almost half a century ago in Vietnam; however, the production
remained limited in compared to that of other countries in the region like Malaysia, Singapore,
Thailand and China.
In the 1990’s the output was on average equal to 380,000 tons and consumption hovered around
3.8 kg/person. With the economic reforms of the mid-90’s, plastic production boomed growing
20-25% each year while diversifying in quality and range. One of main reasons attributed to the
plastic industry growth is a still low starting point, an average consumption per capita lower than
of the region and the world. This is expressed by an average growth of over 20% in value and
over 18.75% in production from 2006 until now. Plastic industry size is accounting for 4.48% of
local whole industry and playing a role of an essential supplementary industry that needs

development in state economy plans. Vietnam plastic industry is one of ten industries that are
favored by the government for development priority due to its excellent and stable growth as
above-mentioned, performing quite strong in exports activities and having good competitiveness
over other regional countries.
Vietnam’s production output of plastics per capita kept on growing strongly, from 23.2 kg of
plastic per person in 2005 to 42 kg per capita in 2012. At present, most of household plastics sold
in supermarkets are local products and account for around 20% of the industry's total output.
Another product category that has achieved strong growth and made up the largest production
ratio (around 40%) is plastic packaging, nearly all of which is also locally made. Meanwhile,
state owned enterprises typically produce also technical and construction items. In basic sectors
such as daily-use household plastic products, domestic enterprises, especially small and medium
sized ones (SMEs), are the major producers.
Competition in the Vietnamese market is currently quite vigorous. Many companies are in the
hands of Chinese-Vietnamese who procure supplies from family contacts living around the
world. The Vietnamese government is encouraging their merger to cope with the increased
competition after WTO entry.
Vietnamese plastic products have been sold in 151 countries all over the world such as Japan,
USA, The Netherlands, Germany, Cambodia, UK, Indonesia, and Malaysia, and so on. Last year,
Vietnam’s plastic export revenue reached nearly USD 2 billion, making an increase of 25% year
on year.
In addition to those already mentioned, some shortcomings of and challenges for the Vietnamese
plastics industry can be identified as follows.
The industry must import 80% of its materials and currently produces few high-technology
products. Because raw materials, chemicals and additives represent between 60-70% of the
production cost, the reliance on imports leaves the industry with only a marginal added value.
The major plastic exporters to Vietnam are countries in the region, including Taiwan, Japan,
China, South Korea and some Europe countries (Germany, Belguim, Italy and Austria). In 2006,
the total imported of plastic materials was 1,747 thousand tons, worth nearly USD 3 billion and
rising to USD 4 billion in 2012.

5


Furthermore, the plastic industry is facing difficulty, especially firms using PP as raw material
for the production. Because plastics enterprises will bear import duty for plastic material
Polypropylene (PP) from 2014, when the import tariff shall be increased from the current level of
0% to 1% in 2014, up to 2% in 2015 and 3% from 2016 onwards1.
Other challenges include the high ratio of unskilled workers, at 70-80% of the workforce and
of SMEs which account for 80% of the total and lack capital to improve production.

1

Circular No.107/2013/TT-BTC of August 12, 2013, amending preferential import tax rates applicable to some
commodities of headings 2707, 2902 and 3902 in the preferential import tariff

6


2. CURRENT SITUATION OF VIETNAM PLASTIC INDUSTRY
2.1. Arrangement and distribution of Vietnamese plastic enterprises
The number of plastic corporations in Vietnam reduced sharply from 2,700 in 2006 to 1,400 in
2012. There are some main reasons led to this situation:
-

The development of the plastic industry led to strong investment in large enterprises.
Small businesses do not have enough capacity so have to cooperate/merge together to be
strong enough to compete with big business.

-

Due to economic crisis during last time also led to the situation that small businesses face
with difficulties in accessing capital for development investment

-

The cost of production (including factors: price of input materials - technology,
production costs) rise is also another cause of the reducing of the number of plastic firms.

Due to the above reasons, in plastic industry there existed a conflict between a large numbers of
companies with real capacity. Among plastic firms, only 6% are state-owned, but they
represent about 25% of the total capital invested in the industry. State-owned companies tend to
be larger, employing more workers and having greater total investments than their small or
medium sized private competitors. The rest are foreign invested enterprises, which account for
about 15% total number of plastic firms but having 40% of overall investments. As for private
enterprise, some business having right investment for technology and the skills of the
workforce have a noticeable development, but the number of these firms is very limited. In fact,
private firms account for over 70% total number of plastic firms but having only 35% of overall
investments.
According to VPA report 2012 and Statistical Yearbook of Vietnam 2012, there are 1,400 firms
operating in plastic industry. Most enterprises are located in the South of Vietnam. HCMC and
the southern provinces contribute 83% to the total plastics production. Hanoi and the northern
provinces account for 13% and the central region covers the remaining 4%.
Table 1. Distribution of companies by geographical area
Region

Companies

Share

The North of Vietnam

182

13%

The Middle of Vietnam

56

4%

The South of Vietnam

1,162

83%

Total

1,400

100%

Source: VPA, GSO

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In the present structure of the plastics industry, packaging firms account for the largest
proportion (39%) and they also represent the largest export ratio (accounting for 66%).

Consumer group accounted for 22%, this group narrowed most compared to 2007 period.
Construction group had strong growth in the years 2007 - 2008 due to huge demand for
construction at that time; however, this segment is facing many difficulties due to the freezing of
the real estate market in the past few years. Technical plastics group accounted for 19%.

Product category

Table 2. Distribution of companies by product category
Companies
Share
2007

2012

2007

2012

Packaging

528

546

38%

39%

Consumer

448

308

32%

22%

Construction

147

280

10%

20%

Technical

277

266

20%

19%

1400

1400

100%

100%

Total

*Note: Packaging products include soft, stiff products such as shopping bags, cosmetic pots.
Consumer products include chairs, tables, other furniture. Construction products include
water pipes, water tanks, decoration, sheet, roof shelter. Technical products include high
quality produces such as pressure pipes, cover of TV
Source: VPA report

8


2.2. Output
During period 2008-2012, Vietnamese plastic industry has grown at an average rate of 20% a
year. The output raised from 1,880 million tons in 2007 to 4,500 million tons in 2012,
consumption has grown steadily over the years, from 23,2 kilograms per person in 2006 to 42
kilograms per person in 2012.
Table 3. Plastic output and consumption index
Year
2007
2008

2009

2010

2011

2012 (*)

Output (thousand tons)

1,880

2,294

3,200

3,800

4,120

4,500

Output growth rate (%)

-

22

39

18

8

9

24.6

27.8

31.4

35.6

40.2

42

Consumption index
(kg/person/year)
Note: * Estimated

Source: Ministry of Industry and Trade
In recent years, the output of Vietnam plastic industry has continued to grow, although at a
slower pace, given the difficulties brought about by rising prices of petrol and materials.
Table 4. Output of plastic products by main categories
Year

2007

2008

2009

Volume
(tons)

2010

Kind of
products

Volume
(tons)

Rate
(%)

Volume
(tons)

Rate
(%)

Rate
(%)

Volume
(tons)

Packaging

714,400

38%

917,600

40%

Consumer

488,800

26%

619,380

27%

896,000

28%

1,140,000

Construction

413,600

22%

481,740

21%

576,000

18%

646,000

1,328,000 41,5% 1,482,000

2011
Rate
(%)

Volume
(tons)

2012 (*)
Rate
(%)

Volume
(tons)

Rate
(%)

39% 1,627,400 39,5% 1,800,000 40%
30,% 1,277,200 31%
17%

618,000

15%

1,440,000 32%
652,500 14.5%

9


Technical

150,400

8%

160,580

7%

272,000

8,5%

342,000

9%

370,800

9%

382,500

8.5%

Others

112,800

6%

114,700

5%

128,000

4%

190,000

5%

226,600

5,5%

225,000

5%

Total

1,880,000

100% 2,294,000 100% 3,200,000 100%

3,800,000

100% 4.120,000 100% 4,500,000 100%

Note: * Estimated

Source: Ministry of Industry and Trade and GSO
Of the total plastic output in 2012, plastic packaging accounts for 40% while plastic consumer,
construction materials, and technical account for 32%, 15% and 9% respectively.

2.3. Market and Export capacity
Vietnam plastic exports has enjoyed a noticable growth since 2007. 2010 was a milestone of
Vietnam plastic exports with the turnover of over USD 1.2 billion for the first time. Since then,
export revenue kept on strongly growing to nearly USD 2 billion in 2012. This is considerable

growth by Vietnam plastic industry, showing a strong recovery of plastic industry after
the 2008 financial crisis, a positive sign of development for Vietnam plastic industry.
Table 5. Export turnover during the period 2006 – 2012
Year

2006

2007

2008

2009

2010

2011

2012

Export turnover (million USD)

478

750

922

968

1,268

1,599

1,995

-

56%

23%

4.90%

31%

26%

25%

The growth rate (%)

Source: Ministry of Industry and Trade, Vietnam Custom

10


Vietnamese plastic products have been sold in 151 countries all over the world such as Japan,
USA, The Netherlands, Germany, Cambodia, UK, Indonesia, and Malaysia, and so on. During
last five years, Pacific Asia has still been the biggest market of Vietnam (nearly 60% in 2012).
Europe market kept a stable ratio (around 28%).
Table 6. Export turnover by region 2008-2012 (thousand USD)
Markets

2008

2009

2010

2011

2012

Export
value

Ratio
(%)

Export
value

Ratio
(%)

Export
value

Ratio
(%)

Export
value

Ratio
(%)

Export
value

Ratio
(%)

Pacific Asia

478,307.
8

51.9

516,521.
0

53.3

729,316.1

57.5

927,343.
9

58.0

1,167,234.1

58.5

Europe

260,811.4

28.3

271,088.
8

28.0

352,608.5

27.8

450,881.
0

28.2

568,652.5

28.5

America

172,338.3

18.7

167,978.
2

17.4

171,230.7

13.5

199,858.
6

12.5

235,442.1

11.8

Africa

10,137.5

1.1

12,586.3

1.3

15,220.5

1.2

20,785.3

1.3

23,943.3

1.2

Source: Ministry of Industry and Trade

11


Vietnam plastic export turnover to Italy is quite stable (around 20-30 million USD). The export
turnover to China has reduced significantly (from 247 million USD in 2008 to 26 million USD in
2012). Japan is still top-three importer for Vietnam plastic products. However, the export
turnover has decreased sharply from 321 million USD to 143 million USD. This situation is the
same with Thailand. The total turnover of Vietnam plastic products to Thailand declined from
137 million USD to 27 million USD.
Table 7. Export turnover by country 2008-2012 (thousand USD)
Countries

2008

2009

2010

2011

2012

United States of America

161,734

136,356

114,605

137,777

150,357

Japan

321,429

250,397

194,194

143,535

143,688

98,942

86,463

66,591

47,200

63,838

140,073

105,769

71,588

55,970

35,682

70,002

42,536

32,941

30,248

32,610

137,903

79,457

46,139

30,061

27,156

Italy

22,693

28,618

23,728

32,751

27,079

China

247,608

97,514

55,584

34,670

26,010

Malaysia

58,536

48,139

34,144

23,997

24,719

Indonesia

140,836

84,710

44,525

19,259

13,191

73,000

85,914

53,990

41,993

6,417

Netherlands
Germany
France
Thailand

United Kingdom

Source: Ministry of Industry and Trade
2.4. Material sources
Scarcity of locally produced raw materials poses itself as one of the main barriers to the stable
development of the Vietnamese plastic industry in the long term, causing a heavy dependency on
imports. As reported, domestic supply of raw materials can meet only 15-20% of the country’s
demand (see more data at table 8). Therefore to feed this fast-growing sector, Vietnam has to
import a huge quantity of raw materials and auxiliary chemicals. In 2012, import value of plastic
materials reached USD 4 billion, twice as much as its export turnover. Because local petrochemical capacities could not meet fully domestic enterprises demand, domestic raw materials

12


can meet only 15-20% percent of the country’s demand and in fact 80% - 85% of raw materials
should be imported from abroad.
Table 8. Quantity and turnover of imported material in 2008-2012

Year
2008
2009

2010

2011

2012

The quantity of imported
material in VN (tons)

1,747,845

2,195,645

2,390,162

2,555,997

2,233,999

Import value (thousand
USD)

2,952,671

2,814,182

3,784,117

4,763,144

4,000,701

Source: Ministry of Industry and Trade

Table 9. Production capacities of some big domestic companies
Item Raw materials
Producers
Capacities
1

PVC

2

PP

3

PET

4

EPS

5

DOP

6

BOPP film

Phu My Chemicals &
Plastics Co. Ltd.
TPC Vina Chemicals &
Plastics Co. Ltd.
Vietnam
Petro
Chemicals Group
Formosa Taiwan - Hung
Nghiep Co., Ltd.
Việt Nam Polystyrene
Co., Ltd
LG VINA Chemicals
JV Co.
Youl Chon Vina Plastic
JS Co.
Formosa Taiwan - Hung
Nghiep Co., Ltd.

Remarks

Total capacities of the 20% for export
two
companies: 80% for local
300.000 tons/ year

suply
150.000 tons/ year
150.000 tons/ year

30% for export

30.000 tons/ year
30.000 tons/ year
12.000 tons/ year
40.000 tons/ year
Source: VPA

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At present, Vietnam has imported over 30 categories of plastic materials served for production,
in which PE and PP are the most imported ones. In 2012, PE was imported from 25 countries in
the world with total imported quantity 544 thousand tons, worth 775 million USD. In which,
Saudi Arabia is the biggest PE exporter to Vietnam, counted 33% of total PE imported. PP is the
second largest imported material in plastic industry with 472 thousand tons, worth 701 million
USD. Saudi Arabia still kept the position of top PE exporter to Vietnam, counted 22% of total PE
imported.
Table 10. Plastic materials imported into Vietnam
Year
Product
label

2008

2009

2010

2011

2012

Value
Value
Value
Value Imported Value
Imported
Imported
Imported
Imported
quantity (Thousand quantity (Thousand quantity (Thousand quantity (Thousand quantity (Thousand
(Tons)
(Tons)
(Tons)
(Tons)
(Tons)
USD)
USD)
USD)
USD)
USD)

PE

547,555

856,113

692,251

795,528

750,775

1,016,752

819,182

1,218,962

544,936

775,030

PP

495,494

731,504

628,457

670,299

607,493

817,569

629,057

1,021,762

472,011

701,170

Polyester

68,300

112,810

67,357

96,786

72,476

123,834

65,155

129,338

202,324

361,704

PET

61,225

85,691

133,893

144,915

187,149

244,073

212,361

353,105

146,706

212,321

PVC

98,988

127,563

139,636

131,736

131,597

152,849

134,847

181,639

133,327

155,871

PS

80,710

146,470

77,040

103,688

90,948

150,810

102,526

202,060

108,027

195,987

ABS

48,178

96,997

63,527

100,415

69,154

144,359

78,358

186,994

87,041

189,670

EVA

45,495

90,909

48,746

73,576

56,703

112,489

57,097

140,889

66,338

131,816

Acrylic

32,732

59,483

40,369

71,343

55,673

113,730

53,263

128,792

60,260

138,397

Polyether

32,028

74,180

42,998

86,312

52,068

126,506

61,332

193,912

58,580

174,342

PC

18,282

51,914

19,875

44,364

30,050

84,833

35,440

111,249

40,088

111,493

PA

10,947

34,927

15,930

40,661

20,603

69,544

42,796

161,783

39,789

130,691

PU

37,381

112,414

38,748

108,608

49,233

147,146

47,694

159,441

34,275

116,066

Alkyd

25,951

45,627

30,294

45,376

32,643

52,448

32,277

61,166

33,918

66,614

EPS

28,011

44,007

36,467

44,256

46,863

69,838

40,656

67,698

30,516

48,064

Lacticacid PP

5,040

10,505

10,337

14,308

10,854

19,277

8,845

22,014

27,441

46,872

Amino

5,453

9,115

5,630

9,597

5,585

9,962

8,061

18,782

13,953

30,430

Silicone

6,457

30,013

5,567

27,128

8,255

42,454

9,545

50,984

13,653

75,768

Epoxide

12,679

32,248

11,677

25,163

13,395

37,753

14,873

52,873

12,727

48,980

Xenlulo
& DX

9,183

29,448

9,957

31,404

12,292

40,469

11,753

52,990

12,437

49,302

Styreneacrylonitrile
(SAN)
copolymers

6,915

12,430

6,746

8,768

7,318

14,163

7,966

17,490

11,888

22,586

PVAC

3,899

8,710

3,807

8,498

5,457

11,957

5,881

13,589

11,736

25,087

PVA

7,027

17,999

6,772

15,812

7,856

19,697

7,058

20,551

9,196

22,138

Melamine

6,536

10,314

6,998

9,881

12,362

15,862

13,526

17,096

8,199

10,953

Phenolic

5,481

10,494

7,164

12,186

7,454

15,116

8,027

17,696

8,008

17,966

14


Urea

11,107

12,452

9,532

10,420

5,205

6,503

3,602

5,879

7,121

8,549

Cumaron
– indene

4,205

7,009

5,009

6,678

5,414

8,143

5,770

11,063

6,110

12,300

VCM

1,128

3,425

2,117

6,997

3,580

12,551

3,358

13,539

4,436

13,605

PMMA

6,945

16,369

7,601

16,801

5,671

15,827

6,505

19,879

3,821

10,973

Natural
Polymer

1,452

5,708

1,702

7,216

1,395

10,176

1,893

9,865

1,614

9,060

Ionexchange
resin

1,296

3,645

1,402

2,492

1,330

3,764

1,010

3,426

1,190

3,899

PTFE

479

5,055

2,271

4,552

304

4,459

670

14,760

853

17,929

Fluoropolymers
nes

1,065

15,616

731

10,765

1,425

22,869

1,215

23,624

523

15,549

Other

20,221

41,507

15,037

27,653

21,582

46,335

24,398

58,254

20,957

49,519

Source: Ministry of Industry and Trade/ Vietnam Customs
2.5. Machinery and technology
2.5.1.

Machinery

Most of the capital equipment in the plastic industry is imported (from about 60 countries in the
world). The majority of imported machinery is from Asia countries (including Taiwan, Japan,
China, South Korea) and Europe countries (Germany, Belgium, Italy and Austria). However,
more than half of imported machine are out-of-date equipment.
The total market for plastic machinery in 2012 was approximately US$ 450 million, increasing
from US$ 148 million in 2005 (3 times).
Table 11. Plastic machinery market size
Year
Imported plastic
machinery

(USD)
Growth rate (%)

2005

2007

2008

2009

2010

2011

2012

148,625,49
0

325,177,06
9

370,994,58
8

244,130,86
0

372,223,16
7

433,687,54
6

450,452,630

-

119%

14%

-34%

52%

16.50%

3.90%

Source: Ministry of Industry and Trade

15


During the period 2007-2012, China has kept this 1st position in rubber and plastic machinery
exporters to Vietnam (nearly 30% of total imported value). Top-five exporters to Vietnam in
2012 are China, Japan, Taiwan, Korean (Republic) and Italy (from rank 7th in 2007 to 5th in
2012). Total exported value of this five countries to Vietnam in 2012 counted nearly 90% total
imported value of Vietnam. Notingly, Slovakia (Slovak Rep.) imported rubber and plastic
machinery to Vietnam boosted from rank 45th (588 USD) to top-ten exporter to Vietnam (3
million USD).
Table 12. Rubber and plastic machinery (HS 8477). World exports to Vietnam
Unit: Thousand USD
Country

2007

2008

2009

2010

2011

2012

China

83,021.707

89,055.302

67,579.331

108,201.416

117,423.193

132,021.447

Japan

54,538.341

83,258.400

29,508.559

74,903.936

97,959.538

122,889.416

Taiwan

72,616.531

103,885.157

57,232.124

83,881.680

99,744.614

80,680.305

Korea (Republic)

71,063.725

24,229.344

18,796.870

37,723.784

38,982.265

57,500.157

Italy

5,349.275

16,754.280

2,604.884

12,030.714

23,615.516

11,002.750

Malaysia

5,030.842

6,736.048

4,184.939

2,095.831

10,204.797

10,904.165

Austria

1,879.746

1,249.930

8,609.250

3,176.779

3,907.120

7,291.144

Germany

13,628.807

21,898.348

30,570.240

12,247.070

10,492.372

6,408.460

Canada

2,916.139

1,951.390

2,641.266

8,527.574

1,457.170

3,342.216

Slovakia (Slovak
Rep.)

588

-

-

-

1,308.550

3,245.320

United States of
America

2,627.702

3,201.204

1,220.601

5,128.233

1,123.759

3,026.853

Thailand

5,849.430

4,499.194

1,043.339

1,850.304

3,741.649

2,497.148

India

1,185.465

1,572.948

286.950

352.724

1,581.979

1,831.478

Singapore

1,275.536

646.742

606.044

501.918

559.183

1,550.667

208.713

127.340

5,357.701

1,012.818

705.220

1,121.297

Switzerland
Mexico

1,076.477

16


Others

3,397.110

11,928.960

13,888.761

20,588.386

20,880.621

4,063.329

Total

325,177.069

370,994.587

244,130.859

372,223.167

433,687.546

450,452.629

Source: Ministry of Industry and Trade, Vietnam Customs
2.5.2.

Technology

In the period 2007 – 2012, along with the fast growth of the plastic industry, plastic firms have
invested much to upgrade technology and machinery. However, the percentage of modern
technology is still simple and concentrated in the major enterprises only. Since 2005, many
plastic processors in Vietnam have invested considerable money in upgrading their
manufacturing equipment and machinery to improve their products in terms of quality and
design, thus being able to compete successfully in domestic and international markets. For
instance, a few large firms are manufacturing high-quality and hi-tech plastic products by using
advanced equipment and machines imported from Germany, Italy and Japan.

In average (during the period 2007-2012), Vietnam imported 100 injection machines, over 500
injection blow molding machines and 200 extrusion machines per year. Around 30% of imported
machines are new machines and the rest (70%) are second-hand ones.
Up to now, according to data from Ministry of Industry and Trade, there are about 10,000
injection machines, extrusion machines and injection blow molding machines, including nearly
6,000 injection molding machines, more than 3,000 blow molding machines and nearly 1,000
extrusion machines.
Injection technology
This technology is used to make plastic components and parts for the electronics, electrical
power, motorbike and automobile industries. Among 6,000 injection molding machines, 75% of
them are the second hand used out-of-date technology (made from 2005). Around 1,000 injection
molding machines of them are of new generation. The total imported value of injection molding
machines of Vietnam increased from 50 million USD in 2007 to 76 million USD in 2012.
Some main brands are currently present in the Vietnam market:
Europe: Engel (Austria); Demag – Battenfeld – Boy- Krauss maffei, Arburg (Germany)
America: Husky (Canada)
Asia
Mitsubishi, Niigata, Toshiba, Kawaguchi, Sumitomo, Nissei, Kurabe (Japan)
Chen De, Chuan Tian, Hai Tian, Yue Hong, Jwell, Keewa, Dakelianshun (China)
LG, Dongshin, Woo Jin, Jinhwa (Korea)
Chuan Lihfa, Fu chu sin, Lien yu, Yanghing, Jonwai, Han Chang (Taiwan)
Injection blow molding technology
A large number of plastic product manufacturers in Vietnam are using injection blow molding
machines to produce plastic packaging products, including PET bottles and kegs. The total

17


imported value of blowing machines decreased from 26 million USD in 2007 to 14 million USD
in 2012.

The main brands identified in Vietnam market include:
Europe: Sipa (Italy); Sidel (France)
America: Husky (Canada)
Asia: Nissei - Placo (Japan), Kaimei - Parker (Taiwan), Sinco (Thailand); Hongzhen (China)
Extrusion Technology
In Vietnam, this technology is used for making such products as water drainage PVC pipes,
water supply PE pipes, aluminum-plastic pipes, optic cables, PVC doors, frames, roofing, and
wall coverings. This is a pellicle-blowing technology to make plastic packaging materials from
pellicles. This technology is used for blowing polyethylene (PE), polypropylene (PP) bags and
PVC pellicles.
The total imported value of extruders increased slightly from 40 million USD in 2007 to 46
million USD in 2012.
The main brands include:
Europe: Amut SP (Italy); Battenfelf – Kraussmaffei (Germany); Cincinati (Austria)
America: PTI – Plastic technical International GmbH, SMS Plastic Technology, Tecnomatic
(US)
Asia: Shin Kwang Engineering Co., (SK), Yarn Bang Electrical Machinery Co., ltd., SM Platek
(Korea); Ka lien, Wuhan, Sen fa Machine Co., ltd (Taiwan); Koei Industrial Co., Ltd, Nissei,
Sumittomo, Mitsubishi (Japan), Zhangjiagang (China).
Table 13. Imported machines for plastic manufacturing
Unit: Thousand USD
Imported machines

2007

2008

2009

2010

2011

2012

Injection-molding machines

50,036

55,384

40,203

66,250

68,155

76,060

Extruders

40,769

54,977

26,457

34,325

51,708

46,794

Blowing machines

26,016

10,197

12,983

15,360

16,474

14,091

Vacuum molding machines and
other thermoforming machines

55,751

36,507

7,843

28,378

23,822

40,501

Others machines for rubber and
plastic manufacturing

127,042

193,673

143,272

194,047

240,702

239,578

Source: Ministry of Industry and Trade, Vietnam Customs
2.6. Labor
In 2012, there are 1,400 plastic firms with around 130,000 labor, working in plastic industry,
counted 1.8% of total labor working in manufacturing, 0.25% of total labor in Vietnam. Labor
in private plastic firms counted 55.5%. Labor in foreign direct investment companies counted
42%. Labor in state owned enterprises counted 2.5%.
During last time, although the plastic industry is considered having high growth, the plastic

18


firms are facing with a scarcity in labor supply, especially skilled labor that are able to using
new generation equipments. In 2012, there are about 130,000 labors working in plastic

industry but that 70% of plastic industry workers were unskilled, low professional skill,
unable to operate modern equipments. This percentage is somewhat higher than the combined
average of unskilled workers in other industrial sectors such as textiles, footwear… Workers
and engineers working in the plastic industry in Vietnam are trained from different mechanical
engineering branches of universities and vocational school, there are no training institutions
for this sector2.
Table 14. Labor of plastic industry
Labor
Total
Skilled
Unskilled
SOEs
Skilled
Unskilled
Private
Skilled
Unskilled
FDIs
Skilled
Unskilled

2010
107,032

2011
118,925

22%
78%
3.50%

24.8%
74.2%
3%

27%
73%
56.50%

31%
69%
55%

17%
83%
40%

19%
81%
42%

29%
71%

32.00%
58%

2012
130,000
27.17%

72.83%
2.50%
33%
77%
55.50%
21%
79%
42%
35%
65%

Source: Ministry of Industry and Trade
According to Human resource development planning of Hochiminh city (HCMC), there are
four major economic sectors for the period 2013-2015, orientation for the period 2020 – 2025:
electronics, information technology, food processing, chemicals – rubber – plastic and
mechanics. HCMC needs 45,900 jobs. In which chemicals – rubber – plastic sector needs
10,800 employees.
According to Ministry of Trade and Industry, the development orientation in the future for
labor of plastic industry:
 Along with the focus training in the professional schools, plastic firms need to spend

rational cost for retraining staff and technical employees, abroad if necessary. It is
essential to effectively use advanced equipment, technology for high product quality
and low production costs.
 Develop comprehensive strategic programs and plans in training managers and skilled

employees. The training must be conducted in a wide scope to meet the immediate
requirements, but also has plans to train for higher-skilled workers for the development
in the future
 Capacity building for universities, colleges and vocational training to train good

2

In fact, recently, there are some training centers, colleges provide training courses relating: plastic – chemical –
petrochemical but it is very few, and their number of students/trainees are small.

19


managers and skilled workers, meeting the growing needs for labor force in plastic
industry.
 Develop training centers, vocational training for plastic industry. These centers operate

with the support of enterprises and organizations at home and abroad. These centers
are responsible for coordinating with professional units to formulate long term, short
term, and thematic training programs to update knowledge and disseminate the latest
domestic and international information for trainees.
2.7. Development orientation and policy for plastic industry to 2020
Production and consumption of plastic enterprises in the industry next time will be affected
significantly from tightening monetary policy, decreasing public investment spending, as well
as the grim situation of the construction industry and real estate. Under this curriculum, on 17
June 2011, the Ministry of Industry and Trade issued Decision no 2992/QD-BCT approving
the planning on development of Vietnam's plastic branch until 2020, with orientation to 2025.
According to this plan, Plastics’ export revenue is expected to reach US $2.15 billion and US
$4.3 billion by 2015 and 2020, respectively; the growth rate is expected approximately
17.56% per year in the period 2011-2015, and, gradually reducing plastic packaging products
and plastic consumer, increasing proportion of construction and technical plastics.
2.7.1.

Development orientation

 Development of plastic industry shall be oriented to modernization, intensifying

automation, gradually eliminating old equipment and technologies to substitute with
world state-of-the-art equipment, new materials usage to ensure quality, safety,
hygiene norms, meeting environmental criteria requested by Vietnam and the world.
 Plastic industry investment should go straight into modern technologies to create high

quality products with low costs that could compete on domestic and world markets,
ensuring ecological environment
 To mobilize all resources at home and abroad to focus on investment in plants

producing materials, semi-finished products, chemicals, additives for plastic industry.
Besides, to encourage investment in mold manufacturing, parts and equipment for the
plastic industry; to encourage the development of waste and scrap plastic processing
industry.
2.7.2.

Gross output targets of plastic industry

Table 15. Gross output targets of plastic industry
2015
Gross output of
78,500 billion dong
plastic industry at
constant 1994 prices
3.74 billion USD
2011 - 2015
Growth rate
17.56%

2020

2025

181,577 billion dong

390,000 billion dong

8.65 billion USD
2016 - 2020
18.26%

18.67 billion USD
2021 - 2025
16.52%

20


2.7.3.

Value added targets of plastic industry

Table 16. Added value targets of plastic industry
2015
Added value of plastic
10,908 billion dong
industry at constant
1994 prices
0.52 billion USD

2011 - 2015
Growth rate
12.75%

2.7.4.

2020

2025

19,319 billion dong

32,274 billion dong

0.92 billion USD
2016 - 2020
12.11%

1.54 billion USD
2021 - 2025
10.81%

2020
12.5 million tons

2025

5.5%

6.0%

Production targets of plastic products

Table 17. Production targets of plastic products
2015
Production of plastic
7.5 million tons
products
Ratio of plastic in
5.0%
structure of the whole
industry

2.7.5.

Plastic industry products proportions targets

Table 18. Plastic industry products proportions targets (unit: %)

2015

2020

2025

Total in plastic industry

100

100

100

Plastic packaging

36

34

31

Construction plastics

23

25

27

Household plastics

20

18

17

Technical plastics

21

23

25

2.7.6.

Plastic industry products export targets

Table 19. Plastic industry products export targets
2015

2020

Export turnover (billion USD)

2.15

4.3

Growth rate (%/year)

15.43

14.87

2.7.7.

Development master plan to 2020

Table 20. Development master plan in 2011 -2015 period

21


Targeted production capacity
Plastic packaging

Total investment capital

1,218 thousand tons

13,885 billion dong

0.66 billion USD

Construction plastics

927 thousand tons

7,898 billion dong

0.38 billion USD

Household plastics

702 thousand tons

6,571 billion dong

0.31 billion USD

Technical plastics

853 thousand tons

15,354 billion dong

0.73 billion USD

Table 21. Development master plan in 2016 -2020 period
Targeted production capacity

Total investment capital

Plastic packaging

1,550 thousand tons

15,810 billion dong

0.75 billion USD

Construction plastics

1,400 thousand tons

10,752 billion dong

0.51 billion USD

Household plastics

750 thousand tons

6,480 billion dong

0.31 billion USD

Technical plastics

1,300 thousand tons

20,280 billion dong

0.97 billion USD

2.7.8. PP import tax
Table 22. PP import tax

Import tax

2014

2015

2016 onwards

1%

2%

3%

Based on this plan, Ministry of Industry and Trade also offer appropriate solutions for each
stage of development of the industry. And, the solutions for capital are the most important.
Besides equity capital, joint-venture capital, plastics companies will be given priority to
borrow loans from Government credit sources. The total investment for plastic industry in the
period 2011-2020 is estimated VND 241,066 billion. These funds focus for investment and
expansion manufacturing, technological innovation and human resources. This is an
opportunity for plastic firms to capacity building, increasing competitiveness.
In order to remove difficulties for materials issues in plastic sector, the Government
encourages foreign investors to participate in the production of plastic materials in Vietnam on
the basis of domestic oil resource, creating favorable conditions for the cooperation for
investors in petrochemical, chemical, plastics industry. The Government also creates favorable
conditions for domestic enterprises to participate in the materials project for the plastic
industry. Besides, the Government provides credit priority policies for the project in plastic
pattern (borrowing 85% of the capital of the Bank for Investment and Development, providing
guarantees to each specific project while borrowing foreign capital…). To encourage plastic
enterprises to develop, the State will provide tax priority policies, creating favorable
conditions for the import plastic materials, innovation and science and technology transfer,
human resource training, market expansion... According to the plan, in order to achieve the
above objectives, capital accumulation from enterprises is expected about 28-30% of capital
requirements for the industry development, credit loans counts 12-14% and FDI counts 30-

22


32%.

23


3. SURVEY ABOUT PLASTIC PROCESSING TECHNOLOGIES IN VIETNAM
3.1.

Introduction

3.1.1. Survey objectives
The same to the research in 2007, the 2013 survey aims at the following purposes:
 To define the reality of equipment and technology application in Vietnam plastic

industry nowadays.
 To determine demand of equipment use of plastic enterprises in Vietnam in the coming

future.
 To update records of 200 plastic enterprises in Vietnam for the purpose of market

survey and analysis, sales and marketing strategy.
3.1.2. Survey objects
Survey subjects are 200 plastic enterprises of all economic sectors in Vietnam, including stateowned, private and foreign-invested enterprises.
Based on the experiences from the previous survey and current situation, the survey team
sorted out the list of interviewed subjects according to the following requirements:
 Prefer enterprises ever participated in 2007 survey
 Enterprise established by Enterprise Law of Vietnam
 Having factory/plants meeting national standard
 Applying the following technologies: injection molding, blow molding, extrusion
 Belonging to one of the 4 main sub-sectors applying the above-mentioned

technologies, i.e. packaging materials, consumer, technical and construction plastic

production.
3.1.3. Survey tools
 Desk study
This method helps collect and analyse current situation of plastic industry in Vietnam, general
information of plastic enterprises from secondary data/information, existing researches,
surveys or articles.
 Telephone interview
The telephone interviews are intended to check the existing/validity of plastic enterprises and
collect some general information.
The plastic enterprise list was provided by ICE (from the 2007 research). On that basis, the first,
the survey teams checked address of SMEs through directly telephone or email. About 50% of
these 200 plastic enterprises in the list has changed address or dissolved or do not want to attend
the interview. The interviewers had to search for exact address or alternative enterprises.

24


 Survey and directly interview based on questionnaire
A questionnaire is built to collect information on plastic enterprises in Vietnam with specific
eyes on their (i) general information of enterprises (Name, address, telephone, establishment
year, number of staff, enterprise type, turnover, plastic consuming rate, output capacity, etc...);
(ii) Plastic production technology of plastic enterprises; (iii) their equipment/machinery (see
attached sample). This questionnaire is the same to questionnaire in 2007 survey. Sample
questionnaire is provided in Annex - Questionnaire.
3.1.4. Survey process
Literature findings

Desk study

Logistic for the

survey

Survey preparation

Provide training for
interviewers
Adjusted list

Check enterprise list

Conduct field survey in HCMC, Binh
Duong, Long An, Dong Nai, Soc Trang,
Tay Ninh, Ba Ria, Vung Tau, Hai Phong,
Hanoi, Bac Ninh, Quang Nam

Survey
teams

200 questionnaires
collected

Data entry and analysis

Report

Interviewers were divided into survey teams in 3 corresponding regions. Each team was
trained to clearly understand the survey content. The questionnaire was collected and checked
the validity twice. Providing that there was any missing, unclear, illogical information in the
questionnaire, interviewers were requested to re-interview. Total 200 plastic firms were
interviewed. Collected data was entry by Excel and processed using statistical software –

SPSS.
3.2. The survey’s main results

25