"Asin heel" in plastic exports
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Plastic exports now only account for 20-25% of raw material demand. |
Exports are increasing
According to the Ministry of Industry and Trade, at present, the main export items of the plastic industry are plastic bags; plates, plastic films; and products used in transportation and packaging; household plastic products and industrial plastic products. In particular, plastic products and industrial plastic products are exported to many markets in the world with an increasing turnover.
In 2017, exports of plastics products reached $US 2.5 billion, an increase of 14% compared to 2016. Especially, in 2017, there were 7 export markets with turnovers of more than $US 100 million, including Japan, Korea, Netherlands, Germany, England and Cambodia. In particular, exports to Japan reached the highest turnover with $US 565.4 million, accounting for 22.4% total export of plastic products. Exports to the US reached $US 376.57 million, an increase of 13.2%.
Mr. Tran Thanh Hai, the Deputy Director of Import-Export Department (the Ministry of Industry and Trade) said that in 2018 as well as in the future, plastic exports will still have many favorable factors. The signing of Free Trade Agreements (FTAs) has brought many opportunities for exporters of plastic packaging when partners are moving orders from China to Vietnam to take advantage of cheap labor costs, low cost of production, export tax rate of plastic products to Korea, Japan and EU to enjoy many preferences. In addition, the demand for plastic products in the EU and Japan remains high and increasingly preferring plastic products made in Vietnam, especially the need for plastic pipes and plastic bags. They are also traditional markets for which Vietnamese enterprises have the ability to penetrate well. Especially, in the EU market, Vietnamese plastic products are not subject to anti-dumping tax from 8-30% as other countries. Plastic packaging manufacturers expand their market share in the EU market thanks to double benefits in terms of price and preferential import tax rates.
Imports up to 80% of raw materials
Despite the strong development in recent years, Vietnam's plastic industry is mainly known as an economic-technical field of plastics processing, while it is not fully active in raw materials and input for production. The statistics from the Import-Export Department (Ministry of Industry and Trade) showed that the plastic industry was only active with about 20-25% of raw materials as well as input additives.
Mr. Hai further analyzed: The biggest limitation of the plastic industry is the lack of raw materials, so most of them are imported because the petrochemical industry is not developed in the country. In particular, the types of PE and PP are still the most imported items and value increases over the years. The inability to produce raw materials will make it difficult for export enterprises to take advantage of tax incentives due to regulations on origin of goods. In addition, competition from plastic products in ASEAN countries and cheap plastic products from China are increasingly severe. The development of export markets also encountered many problems. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) does not involve the United States, which causes businesses to be imposed export anti-dumping duties, which is difficult for them to compete with. Japan is the largest export market for Vietnam's plastic industry, but there are strict requirements on the quality of goods. These requirements will be more difficult when many Vietnamese companies are not able to meet the standards, mainly from the lack of information and experience.
According to some experts, besides the above mentioned factors, the difficulties faced by the plastic and rubber industries are the low technology level of Vietnamese plastic enterprises, which have not created much value for the industry, leading to low competitiveness of goods. Many countries in the world, including the United States and the EU, have also passed a ban on plastic food preservation products that seriously affect human health and the environment.
![]() | Declared plastic film, importing scrap VCN – 2 containers which were imported to Cat Lai port declared as plastic films but were ... |
Mr. Hai said that in the coming time, if the petrochemical refineries expand their production capacity, the source of plastic materials for export and domestic consumption will be more active, promoting competitiveness for Vietnamese plastic products. From the point of production and export, many experts recommended to improve competitiveness for enterprises and there is a need for effective solutions to help businesses have favorable conditions, invest more in innovation technology, enhance professional knowledge as well as update market trends.
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