Green Production Driving the Plastics Industry Forward

The Plastics Industry is experiencing a meteoric rise, boasting an average annual growth rate of 16-18%, trailing only the telecommunications and textile sectors. This burgeoning industry is poised at the brink of numerous developmental prospects and avenues for market proliferation, signaling a new era of innovation and economic vitality. As it stands, the plastics sector is not only expanding rapidly but also adapting to the green revolution, seeking sustainable methods to further its reach and impact.

Great opportunities for the plastics industry

The Vietnam Import and Export Report 2021 from the Ministry of Industry and Trade reveals that Vietnam’s plastic industry experienced a significant surge in exports, reaching an impressive 4.9 billion USD in 2021. This represents a substantial 34.9% surge in comparison to the figures recorded in 2020. Foreign Direct Investment (FDI) firms were instrumental in stimulating this expansion, adding 3.32 billion USD to the overall export revenue, indicating a significant increase of 37.8% compared to the previous year. FDI businesses make for a significant 67.3% share of the country’s total plastic product exports.

Plastic material exports have experienced a significant boom, reaching 2.26 billion USD in 2021, which represents a noteworthy 68% increase compared to 2020. FDI businesses had a significant role in driving the export of plastic materials, contributing 1.52 billion USD, which represents a huge increase of 72.4% compared to the previous year. FDI businesses dominate the plastic material export turnover in Vietnam, accounting for a significant 67.2% share.

The Vietnamese plastics sector has effectively entered 160 markets worldwide, demonstrating its extensive global presence. The United States is the largest and most rapidly expanding export market, with a remarkable value of 1.85 billion USD. Additional notable export destinations comprise Japan with a value of 696.9 million USD, the ASEAN region with a value of 575.8 million USD, and the EU market with a value of 557.7 million USD.

Exports to the US market surged in 2021, driven by the need to meet the rising demand for construction, decoration, and repair materials in American households. This highlights the Vietnamese plastic industry’s ability to increase competitiveness and meet consumer demand. At the same time, exports of green technology plastic bags to the EU market witnessed significant growth. While the EU is a leader in implementing regulations to reduce plastic usage, Vietnamese plastic enterprises are demonstrating their commitment to reduce environmental impact by adopting green technology to produce biodegradable plastic bags, thus complying with regulations and satisfying the EU’s market focus on environmental protection.

Experts hold a positive outlook for the plastic industry’s future due to the advantages offered by new-generation Free Trade Agreements (FTAs) like CPTPP, EVFTA, and RCEP. These agreements pave the way for increased competitiveness in the global market. For instance, the EVFTA grants Vietnamese plastic products a significant edge when entering the EU market with a 0% tariff rate, a benefit enjoyed by very few competitors. This factor, coupled with a 21.73% rise in plastic exports to the EU in 2021, underscores the positive impact of FTAs. Furthermore, the industry benefits from the ongoing shift in investment and business operations by multinational corporations, alongside the strong recovery of various sectors post-pandemic. Since plastics are a crucial input material for numerous industries like textiles, footwear, and electronics, a rise in demand for final consumer products (packaging, appliances, construction materials, etc.) translates to a corresponding increase in demand for plastic products. This trend is expected to propel plastic product and material exports towards a projected value of $10 billion in the near future.

Green manufacturing enhances the competitiveness of plastics businesses

In addition to opportunities, the plastics industry in Vietnam faces other market obstacles. Enterprises must comply with the rules and regulations of FTAs and international markets, such as rules of origin, ISO TC6 certification, and commitment to sustainable development, to benefit from the advantages of FTAs and maintain a solid position in the global supply chain. Moreover, the current trend indicates that consumers are particularly interested in sustainable, eco-friendly products.

Big brands of footwear, fashion…in the world require plastic producers to satisfy more stringent standards for sustainable production. According to several specialists, the issue of sustainable development and environmental protection is the greatest obstacle for Vietnamese plastic businesses. Meanwhile, the United States and the European Union are large and fastidious marketplaces with many competitors. To participate in and dominate these markets, plastic enterprises must increase their competitiveness, invest in machinery, equipment, and technological innovation to green the manufacturing process; invest in branding and product promotion… Even for enterprises that primarily serve the domestic market, greening manufacturing in the direction of a circular economy model is required for sustainable development.

In recent years, numerous plastic businesses have prioritized investments to gradually green the production process, reduce the carbon footprint of business activities, and create environmentally friendly products by utilizing green materials such as biodegradable plastics, upgrading technology and processes, utilizing clean energy and energy-saving solutions, and enhancing energy efficiency in production.

In recent years, numerous plastics companies have prioritized investments to gradually green their manufacturing processes

Many plastic industry enterprises have chosen Vu Phong Energy Group to develop, employing clean energy for green production, due to our substantial capacity, extensive experience, and prestigious brand. Vu Phong is currently installing a solar power system on Dong A Plastic Company’s rooftop factory No. 02 at Chau Son Industrial Park, Phu Ly, Ha Nam. Previously, Vu Phong installed and handed over the system to several plastic enterprises, including Mekong Plastic – Ben Tre 769 kWp, Mekong Plastic – Tien Giang 889 kWp, Thai Duong Plastic… All of these systems are operating smoothly and efficiently.

In addition to providing solar power EPC general contractor services for businesses investing in the system, Vu Phong Energy Group pioneered the development of solar power with the PPA (Power Purchase Agreement) model. This is a flexible cooperation model pioneered by Vu Phong from the end of 2019 and the beginning of 2020, with international investment funds participating, allowing enterprises to utilize clean energy without paying investment costs.

Businesses with unused factory rooftops can obtain clean electricity from a solar energy system using a system lease contract or a direct power purchase contract. At the conclusion of the contract, the solar power system will be transferred to the company at no cost. The solar power system on the roof of Dong A Plastics factory is also a project developed under this model.

The PPA (Power Purchase Agreement) solar power model

More information:

• Clean energy for manufacturing greening production
• Solar energy for the plastic industry
• Solar power is greening plastic factories

*Illustration at the beginning of the article_Source: https://baodautu.vn/doanh-nghiep-nganh-nhua-don-nhieu-don-hang-lon-d165279.html

Vu Phong Energy Group

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