Plastic purchase is steadily increased by years
In 2008, the
average was 22kg/person/year, increased to 30kg/person/year in 2010 and now
reached 35kg/person/year. This average amount is still lower than the
international average of 37kg/person/year in 2012 and 120kg/person/year in the
US and EU. From expert’s view, the average plastic purchase in Vietnam will
reach the peak of 45kg/person in 2020, which is a potential sign for the high
development of plastic industry in the next few years.
Figure 1: Average plastic purchase per person in Vietnam (Source: Vietnam Trade and Industry Review database)…which lead to the more production
In the first half of 2015, plastic and packaging production
is in a positive trend. According to the Vietnam General Statistics Office, in
the first 6 months of 2015, industry index for the rubber and plastic products
has grown 12.6% as of in 2014; in June 2015, this figure has increase 23.2% as
of in 2014.
Figure 2: Industry index for rubber and plastic products for the period from January to June 2015, in comparison with 2014. (Source: General Statistics Office)Another material for packaging is paper is seen to have a good growth. In the first 6 months of 2015, paper productions and related-to-paper products (including paper packaging) is increase 10.3% as of in 2014.
In general, the last 6 months of the year is the busy period for plastic and packaging market because of the main events in the country such as Mid Autumn festival, New Year Eve. Producers will focus on paper box, biscuit and candy boxes, paper bag for events and cover boxes to supply for the Lunar New Year festival.
Besides, in this period, plastic and packaging companies are actively imported the input materials for production in Quarter 3 and 4 of 2015.
Import of materials for production is continued to increase
From General Department of Vietnam Customs, from January to May 2015, total plastics materials imported to Vietnam has reached 1.4 million tons, which valued USD2.3 billions, increased 29.63% in quantity and 30.6% in value in comparison with the same period in 2014.
Although the oil and natural gas price (primary material for plastic production) has seen to decrease since the middle of 2014, which lead to an decrease in international plastic material price; however, the excess exchange rate of USD over VND has put a pressure for import activities. From 5th May 2014 to 5th May 2015, the USD/VND exchange rate has increase 2.67%, which explained the higher increase in value than quantity for imported plastics materials.
In the next coming time, the USD/VND exchange rate will create more difficulty for plastics industry in Vietnam due to the fact that 80% of primary materials are imported, and the materials price is accounted for 60% - 70% of the production price. This fact revealed a risk of the price fluctuation and exchange rate for the plastics companies. Meanwhile, only 3 companies can produce the plastics materials (PVC, DOP and PP), which can supply only 10% of the total plastics demand in Vietnam.
But more difficulties in export
In first 6 months of 2015, exports of plastics grew 10.3% compared with the first half of last year with the total revenue of $ 4.2 billion. This growth depended heavily on the Chinese market, Japan and the ASEAN countries. However, the European market is showing signs of going down due to impact from the debt crisis in Greece. The European market accounts for 60-70% of export turnover of Vietnam plastics. When Euro price goes down, many European importers have requested a discount, making more difficult for Vietnamese exporters.
