14:24 | 02/12/2018 Industry
(VEN) - The Vietnamese plastics industry is facing many challenges in terms of its viability given that 80 percent of its raw materials are imported.
During the 2010-2017 period, the plastics industry saw high growth of 15-20 percent per year. According to the Vietnam Plastics Association, the industry reached an estimated US$15 billion in revenues in the first 10 months of 2018, an increase of 16.7 percent compared to a year ago, while exports stood at about US$2.78 billion, a year-on-year increase of 29 percent.
Ho Duc Lam, chairman of the Vietnam Plastics Association, said that despite high growth, the plastics industry annually imports 4-5 million tonnes of raw materials, costing about US$6-7 billion, while exports stand at about US$2.5 billion, resulting in a huge trade deficit. To help the plastics industry maintain its growth momentum and ensure sustainable development, domestic supply of materials needs to be guaranteed.
Input raw materials for the plastics industry are made by petrochemical products. However, the Vietnamese petrochemical industry remains weak. According to the Vietnam Plastics Association, even if the Binh Son Refining and Petrochemical Company and Nghi Son Refinery run at maximum capacity, they would only provide 30 percent of the required petrochemical materials. The Long Son Petrochemicals (LSP) complex in Ba Ria-Vung Tau Province officially began construction and is expected to be completed in 2022, ensuring more supplies for the plastics industry, but significant imports will still be required.
In addition, the development planning for the plastics industry in the 2016-2020 period sets out investment in dozens of projects to produce polyvinyl chloride E (PVC-E), PE, PS, Polyester, Melamine, PTA and Polystyrene. However, most of them have not started. Therefore, the government should issue specific and clear mechanisms and policies to raise all domestic and foreign resources to invest in projects on production of raw materials for the plastics industry.
Scrap recycling is also a way to create raw materials for the plastics industry. If the government issues long-term incentive policies, many plastics businesses will invest in modern technologies to recycle domestic scraps.
Vietnam Plastics Association Secretary-General Huynh Thi My said the plastics industry needs to concentrate
resources on developing domestic raw materials.