Vietnamese Plastics Industry Boosts Competitiveness with Green Production

The plastics industry Vietnam is experiencing remarkable growth, boasting an impressive average annual rate of 16-18%. This places it just behind the telecommunications and textile sectors, underscoring its pivotal role in the nation’s economic landscape. Poised for significant expansion and market proliferation, the sector is entering a new era characterized by innovation and vitality. Critically, this rapid development is increasingly intertwined with the global green revolution, compelling plastic enterprises in Vietnam to embrace sustainable methods to ensure long-term competitiveness and market reach while also reducing environmental impact. This article explores the dynamic opportunities and essential green production strategies for the industry.

Great opportunities for the plastics industry

The Vietnam Import and Export Report 2021 from the Ministry of Industry and Trade highlights a significant surge in Vietnam plastic exports, reaching an impressive 4.9 billion USD in 2021. This represents a substantial 34.9% increase compared to 2020. Foreign Direct Investment (FDI) firms played a crucial role in stimulating this expansion, contributing 3.32 billion USD to the total export revenue, marking a significant 37.8% increase over the previous year. FDI businesses accounted for a substantial 67.3% share of the country’s total plastic product exports.

Plastic material exports also experienced a notable boom, reaching 2.26 billion USD in 2021, a remarkable 68% increase from 2020. FDI businesses were instrumental in driving the export of plastic materials, contributing 1.52 billion USD, an increase of 72.4% compared to the prior year. These foreign-invested companies continue to dominate Vietnam’s plastic material export turnover, holding a significant 67.2% share.

The Vietnamese plastics sector has successfully penetrated 160 markets globally, showcasing its extensive international footprint. The United States stands out as the largest and most rapidly expanding export market, with a remarkable value of 1.85 billion USD. Other significant export destinations include Japan with 696.9 million USD, the ASEAN region with 575.8 million USD, and the EU market with 557.7 million USD. This broad market access is a testament to the sector’s growing global market competitiveness.

Exports to the US market surged in 2021, driven by the increasing demand for construction, decoration, and repair materials in American households. This demonstrates the Vietnamese plastic industry’s capability to increase competitiveness and meet diverse consumer needs. Concurrently, exports of green technology plastic bags to the EU market witnessed substantial growth. Despite the EU being a leader in implementing regulations to reduce plastic usage, Vietnamese plastic enterprises are actively working to reduce environmental impact by adopting green technology to produce biodegradable plastic bags, thereby complying with regulations and aligning with the EU’s focus on environmental protection and sustainable production.

Experts maintain a positive outlook for the plastic industry’s future, largely due to the advantages provided by new-generation Free Trade Agreements (FTAs) such as CPTPP, EVFTA, and RCEP. These agreements significantly enhance market competitiveness in the global arena. For instance, the EVFTA offers Vietnamese plastic products a considerable edge in the EU market with a 0% tariff rate, a benefit enjoyed by very few competitors. This factor, combined with a 21.73% rise in plastic exports to the EU in 2021, underscores the positive impact of FTAs on export growth. Furthermore, the industry benefits from the ongoing shift in investment and business operations by multinational corporations, alongside the robust recovery of various sectors post-pandemic. As plastics are a vital input material for numerous industries like textiles, footwear, and electronics, increased demand for final consumer products (packaging, appliances, construction materials, etc.) directly 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

Beyond numerous opportunities, the plastics industry in Vietnam also confronts several market obstacles. Enterprises must meticulously comply with the rules and regulations stipulated by FTAs and international markets, including stringent rules of origin, ISO TC6 certification, and commitments to sustainable development. Adherence to these standards is essential to fully leverage the benefits of FTAs and maintain a robust position within the global supply chain. Moreover, current market trends clearly indicate a strong consumer preference for sustainable, eco-friendly products.

Leading global brands in footwear and fashion increasingly demand plastic producers meet more stringent standards for sustainable production. According to several specialists, the imperative of sustainable development and environmental protection represents the greatest obstacle for Vietnamese plastic businesses. Meanwhile, the United States and the European Union are large and discerning marketplaces with numerous competitors. To successfully enter and thrive in these markets, plastic enterprises must significantly increase their competitiveness. This requires investing in modern machinery, equipment, and technological innovation to implement a truly advantages of green manufacturing and green the manufacturing process, as well as investing in branding and product promotion. Even for companies primarily serving the domestic market, transitioning to green manufacturing guided by a circular economy model is indispensable for sustainable growth.

In recent years, numerous plastic businesses have proactively invested in gradually greening their production processes. This involves efforts to reduce the carbon footprint of their operations and create environmentally friendly products. Strategies include utilizing green materials such as biodegradable plastics, upgrading technology and processes, clean energy solutions for plastic manufacturers and energy-saving solutions, and significantly enhancing energy efficiency in production facilities.

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 and deploy clean energy for green production, owing 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 successfully installed and handed over systems to several plastic enterprises, including Mekong Plastic – Ben Tre (769 kWp), Mekong Plastic – Tien Giang (889 kWp), and Thai Duong Plastic. All of these systems are currently operating smoothly and efficiently, demonstrating the tangible benefits of solar power for Vietnamese plastic companies.

In addition to providing solar power EPC general contractor services for businesses investing in their own systems, Vu Phong Energy Group pioneered the development of solar power with the PPA (Power Purchase Agreement) model. This innovative and flexible cooperation model, spearheaded by Vu Phong from late 2019 to early 2020, involves international investment funds, enabling enterprises to utilize clean energy without incurring upfront investment costs.

Businesses with unused factory rooftops can obtain clean electricity from a solar energy system through a system lease contract or a direct power purchase agreement. Upon the conclusion of the contract term, the solar power system is transferred to the company at no additional cost. The solar power system on the roof of Dong A Plastics factory is an exemplary project developed under this advantageous 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