Packaging industry ahead of good opportunities

10:04 | 08/06/2015 Industry

(VEN) - The packaging industry is experiencing favorable growth thanks to its relationship with such sectors as export activities, foodstuffs and consumer goods production which are experiencing improved performance.

Packaging industry ahead of good  opportunities

Packaging has seen rapid development in Vietnam, driven by a growing demand for consumer goods and foodstuffs. This year’s estimated gross domestic product (GDP) growth of approximately six percent has also created a foundation for the recovery of retail indexes and the development of support industries, including the packaging sector. In addition, the EU-Vietnam free trade agreement and the Trans-Pacific Partnership (TPP) Agreement are expected to sharply increase Vietnam’s export contracts (especially those for seafood and garment products), which will also result in strong demand for packaging products.

These favorable tendencies have made packaging one of the most rapidly developing industries in Vietnam. According to the Vietnam Packaging Association (Vinpas), the average annual growth of the sector was 15-20 percent. At present, Vietnam has more than 900 packaging factories, about 70 percent of which are located in the southern region of the country. The market may be pided into five major areas, including plastic packaging; cardboard/paper; metal containers; and others.

According to the Vietnam Plastic Association, over the past years, the plastic packaging sector has been growing strongly at 25 percent per year thanks to the strong growth of food and foodstuff industries. Packaging manufacturers have invested in advanced production lines and supplied to the market various types of high-grade packaging products that could meet strict standards on food hygiene safety such as packaging products using multi-layer flexible films which helped extend the expire dates of foodstuffs without using preservatives.

The prices of input materials for packaging production have also declined, partly due to the slow growth of the Chinese economy, which lowered demand for industrial paper stocks. The prices of PET bottle products also reduced following the falling prices of plastic raw materials as a result of a sharp decrease of petroleum prices.

At present, a relatively high number of enterprises are participating in the packaging market with different types of products such as papers, plastics, metal membranes and PET bottles. The market segment also sees a clear separation between traders serving small-scale customers and big names of packaging manufacturers occupying most of big customers. For example, big brands such as Ngoc Nghia, Bao Van; Tan Tien Plastic and Rang Dong Plastic are accounting for a significant market share of the environmentally-friendly PET bottles while the paper packaging for dairy products belonged to Tetra Pak (Sweden) and Combibloc (Germany) due to the high technology requirements.

With a high population and a rapid development of the packaging sector for consumer goods, packaging production is predicted to continue expanding. According to economic experts, packaging products and bags will continue to be produced and sell well in the coming time due to their common use character and advantages in terms of production costs thanks to its light weight, energy-efficiency and especially a quick profit recovery. The packaging industry will also have closer links with canned products thanks to its continuous innovation in terms of improved quality and conveniences./.

By Thanh Thanh