It is a relatively young industry compared to other long-standing industries in Vietnam such as mechanics, electronics, chemicals, textiles … but the plastic industry has grown strongly in recent years.
In the period of 2010-2015, the plastic industry ranks among the top industries with the highest growth rates with an annual growth rate of 16-18% / year (only behind telecommunications and textile), especially with The product has a growth rate of nearly 100%.
In Vietnam, the growth potential of the plastic industry is still quite large due to the low demand for plastic products compared to the region and the world. In addition, the plastic industry is one of the priority industries to develop, benefiting from the tax and credit support policies of the State.
Domestic materials can only meet 20% of the demand for plastic industry
Despite the potential for growth, Vietnam’s plastic industry is facing a difficult problem when the supply of raw materials is inadequate and imports nearly 80% of raw materials. According to the Vietnam Plastics Association (VPA), currently Vietnam plastic industry needs about 3.5 million tons of plastic materials and hundreds of additives every year, while domestically produced plastic materials only supply around 900,000 tons of raw materials will be supplied to the whole industry (about 20-25%).
The main import markets of Vietnam include Saudi Arabia, South Korea, Taiwan, Thailand, Indonesia, India … with the main imported products are PE, PP and PVC. The cost of raw materials usually accounts for 70-80% of the product cost, so the fluctuations of raw material prices are directly affecting business operations of the business.
In addition, the inability to take initiative in input materials reduces the competitiveness of domestic enterprises and export enterprises find it difficult to take advantage of tax incentives due to regulations related to the origin of goods. The fluctuation of exchange rate is also a strong factor affecting plastic businesses importing raw materials.
It is forecasted that by 2020, Vietnamese plastic enterprises will need about 5 million tons of raw materials to serve production activities. Therefore, if the source of raw materials is not soon initiated, this will be a big obstacle for businesses in the industry to be able to carry out production as well as increase the competitiveness in the market in the context that Vietnam has and is joining the signing of a series of bilateral and multilateral free trade agreements.
Preferential policies, great opportunities for the development of plastic auxiliary industry
In recent years, domestic enterprises have made more efforts to participate in the field of producing raw materials for plastic industry. Decision No. 2992 / QD-BCT approving the Planning on development of Vietnam’s plastics industry up to 2020, with a vision to 2025 with significant financial, capital and tax incentives for supporting industries. full of this potential.
For PVC and PET, there are currently two domestic enterprises producing with a capacity of 300,000 tons / year. With PP plastic materials, the petrochemical plant in Dung Quat (Quang Ngai) produces 150,000 tons / year. Currently, petrochemical plants are in the process of development, and the supply of raw materials is gradually increasing.
With plastic additives, soon grasped information on preferential policies of the State. Crystal Plastic Manufacturing and Technology Joint Stock Company (PLP) has chosen to build a factory with a strategic location in Dinh Vu Port Industrial Park, Hai Phong. The company has been granted an investment certificate for CaCO3 superfine powder factory and CaCO3 Filler Masterbatch, packaging … with a capacity of 150,000 tons of CaCO3 ultrafine powder annually and 96,000 tons / year of CaCO3 resin Filler Masterbatch.
Filler Masterbatch is a plastic additive, CaCO3 based compound is widely used in the plastic industry to change the mechanical properties and hardness of substrate or polymer. The high temperature mixing on modern technology lines between polyolefin and superfine Calcium Carbonate produces fillermasterbatch products with many applications in the plastic industry and reducing product costs and increasing asset value. raw stone CaCO3.
With the construction of the CaCO3 Filler Masterbatch Plant in Hai Phong, Crystal Plastic (PLP) is enjoying a lot of incentives from the State policy such as exemption of CIT for the first 4 years, a reduction of 50% of tax. payable in the next 9 years starting from the first year the enterprise has taxable income (2016) for the project in Hai Phong, exempted from import and export tax. The factory located right in Hai Phong port helps the company save A lot of logistics costs increase the company’s competitiveness when participating in the market.
It can be said that the development orientation of the Company is completely in line with the development orientation of the industry, with the development trend of the country as well as the whole world economy, taking advantage of subjective advantages. of enterprises and objective advantages brought about by market demands and State policies.
According to forecasts, the growth potential of the plastic industry is still quite large due to the low demand for Vietnam’s plastic products compared to the region and the world. At the same time, the State has also had policies to develop supporting industries for the plastic industry, and orientations to import materials of the industry will be about 50% by 2020. This is a challenge and also a great opportunity for businesses to focus on investing in this potential field.
By CafeF