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Strengths of Vietnam’s plastic sector

strengths_of_vietnam_plasticsVIETRADE - Vietnam’s plastic industry includes about 2.000 businesses from North to South. Most (83%) are in the South - Hochiminh city, Binh Duong, Dong Nai, Long An, and Ba Ria Vung Tau. The North has 13% of them, and the Central 3%.


Plastic products having a great competitive edge are packaging, household products, and construction and engineering plastics. Vietnamese plastic products are, in the main, exported. These plastic products have gradually reached the point to where they control the market of several countries.


1. Overview

- The plastic manufacturing industry is one the fastest growing industries in Vietnam, sustaining average annual growth of 20% to 25%.


- Employees have a solid educational background, are hardworking and capable of advancing their skills.


- Plastic products were one of the fastest growing exports in Vietnam in the last five years and have great potential to perform well on the international market.


- The plastics sector is aggressively promoted by the Vietnamese government.  It aims to achieve sufficient supply of home-produced raw material through resin production facilities. In parallel, the government issued a blueprint for developing supporting industries such as mold-making, plastic recycling, chemistry and machinery supply.


- Modern manufacturing equipment such as: calendering and coating, extrusion molding,  injection molding, extrusion blowing, laminating and printing lines... have basically met plastics production for end-user consumption, construction, packaging, and engineering sectors.


- Several businesses have built up their brand prestige in local market; examples: Binh Minh JS Co., Tien Phong, Minh Hung plastic pipes; Plastic packaging of  Tan Tien, Rang Dong, Van Don JS Co., PET bottles and 3-layer bottles of Oai Hung, Ngoc Nghia, and Tan Phu Plastic Co. ...


- Some businesses have constant overseas orders of quite great quantity; examples are Rang Dong Plastic JS Co. with their tablecloths and synthetic leather products, Tan Dai Hung Plastic JS Co. with PP woven bags, and Hung Yen Plastic JS Co. with HDPE shopping bags and garbage bags.


2. Strengths of Vietnam plastic products by clusters

strengths_of_vietnam_plastics_2a)  PE films and bags

- Printing capability:  Some Vietnamese manufacturers demonstrate their ability to care for a nice printed bag that could constitute a plus for the Vietnamese manufacturers when compared with Chinese manufacturers, as well as an ability to remain flexible and deal with smaller orders.


- Fast development of internal demand will also support export; for instance the plastic packaging supply to the growing domestic export businesses in food, electronic equipment and garments will make the critical mass for production achieved faster.


- Some established contacts with international-buying decision-makers exist already and may be consolidated.  Further, Vietnam’s image in developed nations seems good and may be further capitalized.


- The ability to reduce film thickness through optimum choice of resin is not obvious. The resin available in Vietnam is considered adequate.


b)  Woven webbing and bags

- This segment includes the following products: 

Ø  Consumer (essentially heavy-duty multi-trip Reusable shopping bags)

Ø  Industrial 25 kg bags

Ø  Leno & Rachel bags

Ø  FIBC (flexible intermediate bulk containers)

Ø  Agricultural,  Construction & Tarpaulin


- State-of-the-art manufacturing capabilities of the Vietnamese operators are presented in this segment; LOHIA STARLINGER lines, at tape extrusion and stretching level as well as weaving level, which offer good overall competitive performance against best competitors. Relative homogeneity of origin of machines makes monitoring of performance and maintenance easier within the country.


- Combination of cheap and skilled employees for product confection and assembly using textile-based sewing technology is a plus.


- ISO certification is now in place and running. Implementation of quality control for the webbing products is a prerequisite for establishing recognition of quality supplier.


c)  Laminations

- Development of the domestic food market and of modern distribution and retail will push for more portion packaging, reinforcing the segment.


- Manufacturers seem quite dedicated to quality improvement and diversification. Multilayer equipment is in place. Overall quality of print laminates is an asset for supply of demanding export markets such as Japan and Europe.


strengths_of_vietnam_plastics_3d)  Sheets extrusion & formed containers

- There is one competent and dedicated operator who invested in a co-extrusion state-of-the-art line.


e)  Injection molding products

- Low cost resulting from low labor cost essentially and dependability for some relatively simple injection molded parts such as those close to consumer goods.


- One operator has the advantage of performing with a large clamping force machine allowing injection molding of large parts such as pallets.


f)  HDPE blow molding products

- Ability to network with local companies involved in the supply of labels and shrink sleeves for quality print on small blow molded containers.


g) Flexible packaging tubes

- The cluster has a complete range of products, which covers all packers’ needs and has certification credentials.


- One world-class operator procured a co-extrusion state-of-the-art line, and 8 color printing capability.


- The cluster seems to manage well its promotional tools, including facilitation of information supply for export such as quantity per type of product and per 20’ container loads.


- The cluster has a track record of multiplicity of clients that implies an ability to also serve modest-sized markets and orders.

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