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“Greening” the plastic industry to increase competitive advantage

According to the Vietnam Plastics Association (VPA), the growth rate of the plastic industry will be 8.4% from 2023 – 2028. Rising demand in the industry is expected to boost plastic industry growth.

Experts also say that in the near future, increasing demand from the construction industry is expected to boost plastic market growth.
Experts also say that in the near future, increasing demand from the construction industry is expected to boost plastic market growth.

Growing steadily but still having to import raw materials

VPA’s report shows that the plastic industry has nearly 4,000 businesses nationwide; Of which, 90% are small and medium-sized enterprises, concentrated mainly in the southern region.

Vietnamese plastic enterprises have been producing a full range of plastic products to serve domestic consumption and export markets; In particular, Vietnamese plastic products have been exported to more than 160 countries around the world and are present in many demanding markets such as the US, Germany, France, UK, Italy, Netherlands, Spain, Japan…

Evaluating the plastic industry, Mr. Ho Duc Lam, Chairman of VPA, said that the export turnover of plastic products has grown steadily over the years from 3 billion USD in 2018 to 5.5 billion USD in 2022, with Average growth is 12-20%/year. Statistics show that the growth rate of Vietnam’s plastic industry in the past 5 years has always reached double digits of 12-15%/year. Domestic raw materials can meet 30% of domestic market demand, the remaining 70% is imported from many countries and territories.

VPA Chairman pointed out that the growth rate of Vietnam’s plastic industry has been slowing down since the end of 2022 until now due to the impact of the Covid-19 pandemic in particular and the global economic recession in general. . Currently, in major markets of Vietnamese plastic products, there are signs of reducing inventory. Accordingly, VPA expects that in the last month of 2023, plastic product consumption will have many improvements, businesses will have more order. At the same time, domestic and international output is also expected to have positive progress in 2024.

However, despite strong development in recent years, Vietnam’s plastic industry is still mainly known as an economic and technical industry of plastic processing, while not being fully proactive. source of input materials for production activities.

Currently, each year the plastic industry needs about 4.5-5 million tons of input materials such as PE, PP, PS, PVC… not to mention hundreds of different auxiliary chemicals, while domestic capacity can only meet that demand. approximately 1 million tons of raw materials, chemicals, and additives for the needs of Vietnam’s plastics industry.

Raw material costs account for the highest proportion in the cost structure of the plastic industry. However, Vietnamese plastic companies cannot proactively source domestic supplies, having to import up to 70% of input materials. This situation leads to plastic companies having to maintain large raw material inventories to ensure uninterrupted production and business activities. This leads to increased financial costs, plus risks of exchange rate changes and world oil prices. This limitation is a common characteristic of the entire Vietnamese plastic industry and is unlikely to change in the next few years.

Efforts to “go green” for sustainable development

VPA commented that, with the world’s general trend of developing circular economy as well as in Vietnam, the Government is building a domestic plastic recycling industry to create a supply of recycled plastic materials. That will contribute to increasing investment in new machinery and technology to serve market demand, creating opportunities for suppliers of new machinery and raw materials in the future.

Assessing the trend in the period 2023 – 2028, Mr. Ho Duc Lam stated that the plastic industry in Vietnam as well as the world is forecast to continue to grow in plastic production and consumption in the future, due to the need to use plastic in Many sectors such as packaging, automobiles, electronics, healthcare and agriculture are still growing.

Besides, environmental pollution is getting worse, the plastic industry in Vietnam and the world will aim to switch to producing environmentally friendly products such as recycled plastic and bioplastic. Accordingly, it is necessary to increase investment in research and development of new technology to create high quality products that save energy, raw materials and minimize negative impacts on the environment.

“Because competition in the industry is increasingly fierce, businesses need to make efforts to increase productivity and improve quality while minimizing production costs to be able to compete in the international market” – Mr. Ho Duc Lam stated. solution.

Grasping the above trend, for example, Duy Tan Recycling Plastic Joint Stock Company (DUYTAN Recycling) has invested in building a recycled plastic factory with a total capacity of 100,000 tons/year, with a new imported modern production line. from Europe. Up to this point, this is the first factory in Vietnam to apply “Bottle to Bottle” recycling technology – each used plastic bottle will be recycled into plastic pellets creating a new plastic bottle cycle. Helps reduce the use of fossil fuels.

Regarding green production, Mr. Le Anh, Director of Sustainable Development of DUYTAN Recycling, said that the current trend of correct packaging revolves around 3 phrases: abstinence, reuse and reuse many times. Using plastic and recycled products will help the circular economy be applied and expanded. Therefore, the priority solution for packaging development of manufacturers today is to use recycled materials with environmentally friendly designs.

Similarly, in the flow of free trade market integration and the circular economy, green production… many units operating in the plastic industry and related industries have identified sustainable development as a guideline. men in all business operations. These units not only focus on investing in building recycling plants, but also actively participating in contributing initiatives related to the “green production path”.

Therefore, on the Vietnamese market, more and more products have appeared that use recycled plastic, or in other words, have a regenerated life cycle in production, business, consumption… which are encouraging signs in terms of waste management. plastic waste management in particular and green production transformation in the business community in general.

Finally, the Vietnamese Government will introduce support policies for the plastic industry to promote production, investment and export, while guiding businesses to implement environmental regulations and protect human health. consumption.

Experts also say that in the near future, increasing demand from the construction industry is expected to boost plastic market growth. The construction plastic segment currently accounts for 1/4 of the domestic plastic industry market share. Infrastructure development projects and an increasing number of newly installed factories are sharply increasing the domestic demand for construction plastics and engineering plastics. Vietnam’s plastic industry is in the process of transitioning to a civilized recycled plastic industry, with access to the most advanced technology, which will help businesses quickly access green technologies in the world.

According to Industry and Trade Newspaper