Two thousand and two hundred plastics companies in Vietnam are facing difficulties with several having closed their factories as material prices have rocketed 50 per cent since the ning of the year driven by the fast increase in crude oil price, the Saigon Times Daily reported.
Plastic materials are by-products from the oil refining process, so when the crude oil price goes higher, pushing up prices of plastics materials, said Ho Duc Lam, vice chairman of the Vietnam Plastics Association (VPA).
The price of plastics materials has increased nearly 50 per cent compared to early this year. The import price of plastic grains now has amounted to around US$2,200/ton, Lam said.
Many medium and small plastics enterprises in the country have decided to close their factories as one of the safe ways to avoid losses, he added.
Meanwhile, manufacturers could not constantly increase the price of their products due to the harsh competition and the rejection from customers.
Many plastics enterprises said when they revised up the selling price by some 10 per cent, the purchasing power fell noticeably.
According to VPA, most of the imported plastic materials are from the Middle East, Singapore, Taiwan and the U.S. It is more alarming for the country&rsquos plastics industry when the price of crude oil in the world is increasing daily.
In addition to the higher price of materials, materials are also in short supply at the moment.
With uns and unpredic price of crude oil in the world, the price of plastic materials could rise 15 per cent by September this year, Lam fore.
To deal with difficulties for the industry, the VPA early this month sent a petition to the government asking for support in terms of financial treatment for the industry.
The VPA also asked the government to allow the import of wasted plastic materials for recycling as a way to cut cost for the industry.
Vietnam reportedly earned US$435 million from exporting plastic products in the first half of the year, an on-year increase of 38.2 per cent.
Among 39 countries and territories importing the plastics from Vietnam, Japan continued to be the biggest with turnover of US$74 million in the first five months of 2008, followed by the U.S. (US$58 million) and Cambodia (over US$23 million). (Saigon Times Daily, VNA)
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