For Sustainable Plastic Industry

According to the Ministry of Industry and Trade’s (MOIT) ratified development plan of the plastics industry until 2025, the growth rate of plastic manufacturing in the 2011-2020 period will reach 17.5 percent, with the ratio of the plastics industry to other industries being 5.5 percent in 2020. Accordingly, The goal of the plastic industry until 2020 is to become a fast-growing but sustainable industry, gradually establish a comprehensive framework from raw materials to final product processing; utilise recycled waste; increase the local raw material ratio so as to become self-sufficient and be able to integrate itself into the regional and international markets.

 

In order to achieve the set target, there is much that the plastic industry needs to do given the numerous challenges the industry is currently facing. For example, the type of plastic products made in Vietnam is still monotonous and not meeting the importers’ and consumers’ demand. Also, the product is of questionable quality, which results in the indifference from consumers towards made-in-Vietnam plastic products.

 

Also, according to MOIT statistics, the nation has over 2,200 businesses involved in the plastics industry, out of which 80 percent is located in Ho Chi Minh City. Nevertheless, the competitiveness is low because most businesses operate on a household scale. As a result, more than 90 percent of Vietnamese plastics companies become the processing facilities for foreign companies and have yet to establish their own brands and products.

 

Most importantly, an insolvable issue the industry encounters is the unavailability of local material sources and therefore a dependence on foreign sources, which leads to fluctuating prices. This is the reason despite strong growth in recent years, the plastics industry is better known as a plastic processing hub with low value-added.

 

Mr Tran Viet Anh, Vice President of the Ho Chi Minh City Rubber – Plastic Association said that Vietnam is currently dependent on imported raw materials from other countries in the region. Statistics shows that every year, the plastics industry requires 2.2 millions tonnes of raw materials for manufacturing, but the local supply is only 450,000 tonnes (about 1/20 of the real demand); the remaining 80 percent is imported from South Korea or Saudi Arabia etc. This leads not only to products of low competitiveness, but the raw material trade deficit with insignificant value-added final products. The lack of a raw materials and support industry are barriers for the sustainable development of the Vietnam’s plastics industry.

 

Therefore, an important goal for the industry in the near future is to invest in a raw material source to be self-sufficient. This is so, that in 2020, the export turnover of plastic products will reach almost US$7 billion and the availability of the material area is no longer an issue.

 

Vietnamese plastics businesses have also recently built strong ties with companies in the same industry in Asia and Southeast Asia. This is an integral factor, which will help facilitate a high growth rate of 15-20 percent annually, satisfying the ever increasing local and export demand.

 

Plastic businesses also cooperate with foreign agencies and international equipment suppliers to introduce their latest technologies and material areas etc. In addition, the industry is on top of the agenda in the Government’s plan to promote fast and stable growth, strong export turnover and products with high level of competitiveness.

 

The Government also implements policies to help develop the support industry for the plastic industry, so that until 2020 the raw material import turnover represents only 50 percent of the raw material output. At the same time, the Government also encourages other industries to participate in processing the raw materials for the plastic industry in order for other industries to grow as well.

 

According to Mr Ahmad Khairuddin – President of the Sustainable Development Committee of APE, since joining AFPT, Vietnam has become an emerging economy in the Southeast Asia region, with plastic being one of the fastest growing industries in Vietnam.

 

Also according to Mr Ahmad Khairuddin, the global economic turmoil, decrease in demand, lower plastic price, higher energy price, lack of manpower, high operational costs etc. are among the various challenges the plastic industry is currently facing. In order to counter these issues, AFPI’s members need to utilise their maximum capacities to improve the overall output and competitiveness.