Plastic for Export: Potential Prospects

With 42 per cent growth last year, ranking 4^th in products with high growth, plastic, which has not received due attention and investment compared with others products, is in 2008 expected to join the “over US$1 billion export revenue” club.

Plastic products are expected to bring US$1 billion of export revenue for the country in 2008, up 42.9 per cent on year. This is a high target in comparison with other products. In the first quarter 2007, the Minister of Trade and Industry worked with the Association for Production and Export Enterprises to take measures supporting companies in production to increase export and ensure materials, giving priority to importing scrap plastic to ensure materials for production and still protect the environment.

 

Although plastic exports are at an average level (around US$ 750 million in 2007), numerous factors have the potential to increase that figure in the coming time. This is among commodities with the highest growth over the past time (over 30 per cent), while its export markets are big and promising. Over the past year, Vietnam plastic penetrated the markets of Japan, the US, Cambodia, Taiwan, the Philippines, South Korea, Australia, France and Malaysia. Plastic enterprises also gained access to new EU member countries such as Lithuania, the Czech Republic, Estonia, Hungary and Poland, as well as Middle Eastern and African countries. These are promising markets for Vietnam plastics export growth. However, the Plastics Association said Vietnamese plastics enterprises also face difficulties with a dependence on imported materials. The sector needs 1.4-1.5 million tons of material annually, but the domestic market provides only around 300,000 tons. Vietnam’s plastic products are typically exported through intermediaries because Vietnamese plastics firms have no strategies for trade promotion, trademark promotion, or directly penetrating distribution systems or opening sales units in foreign countries.

The report of the United Nations Comtrade said that Vietnamese plastics have high competitiveness, access to modern production technology, and are accepted by other countries. Besides, Vietnam is a country with good market penetration ability and enjoys low export tax level to countries receiving most export products.

 

The plastics sector meets high demands for big contracts, with average growth over 7 per cent per year. There are 1,400 companies operating in the sector, actively cooperating with each other to win big, long term contracts, investing in modern equipment and applying advanced technology to develop production.

 

Besides, the Vietnamese plastics sector is actively investing in products with high competitive advantages, focusing on developing the domestic market with high quality products designed to meet the demand of similar sectors in other countries such as: agricultural production, water drainage and supply infrastructure, and toys for children.