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Nuggets Vietnam Market: Packaging Double-digit Growth, Automobile Market Potential
Time: 2020-9-18 12:52:20 Source:绿凯思科GETRECYCLING Author:GET营销中心 Hits:10

Nuggets Vietnam market: packaging double-digit growth, automobile market potential, driving high demand for raw materials and injection molding equipment

Vietnam imported 4.3 million tons of plastics, worth about $5.3 billion, in the first eight months of this year, the Ministry of industry and Trade said on Monday.

According to the statistics of Vietnam's Ministry of industry and trade, from January to August this year, Vietnam imported 4.5 billion US dollars worth of plastic products, an increase of 6.5% over the same period last year. Vietnam's largest suppliers of plastics and plastic products include China, South Korea, Saudi Arabia and the United States, the General Administration of Customs said.

In 2019, Vietnam imported nearly 6.4 million tons of plastics, with a total value of more than 9 billion US dollars, an increase of 14% over the previous year.

Double digit annual growth of processing and packaging industry market

According to the official statistics of Vietnam, in recent years, Vietnam's processing and food packaging industry has maintained stable growth, with an average annual growth rate of 15-20%, and is expected to continue to grow. The current double-digit growth rate of Vietnam's packaging industry makes it a very attractive industry.

According to the statistics of the Vietnam Retail Association (AVR), Vietnam has a population of more than 90 million. In addition to the rapid growth of tourists every year, coupled with the general development and growth of the retail industry, Vietnam's food, beverage and pharmaceutical industry has become a fertile land for investors, which has stimulated the development of domestic packaging industry.

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At present, food and beverage account for the highest proportion of the monthly expenditure structure of Vietnamese consumers, accounting for 35% of the expenditure. The annual food consumption value of Vietnamese people is estimated to account for 15% of GDP and is on the rise.

In addition to food packaging, Vietnam's drug packaging also has great potential. According to IMS Health report, Vietnam is one of the 17 countries with the highest drug growth rate in the world, with a market size of about 5.1 billion US dollars. Global data, a market research firm, also points out that Vietnam will continue to maintain one of the three countries with a high growth rate of pharmaceutical industry in the future, with an average annual growth rate of 10%.

In addition, the cosmetics and functional food industry in Vietnam is also growing strongly. These developments will release the demand for convenient and environmentally friendly packaging.

It is worth noting that Vietnam, with its unique market advantages and labor resources, has now become a hot land for attracting world consumer brands to invest and build factories. World famous brands such as Nike, Adidas, Foxconn, Samsung, Canon, LG, Sony and other multinational giants have set up factories in Vietnam. This will further bring more development opportunities to the packaging industry.

Great potential of automobile demand in the future

In terms of automobile industry, Vietnam has the advantages of low-cost manufacturing and free trade, coupled with the rise of the domestic middle class, which makes the automobile industry show a vigorous development momentum.

From the production side, the report shows that Vietnam will be the fastest growing automobile production center in Southeast Asia. At present, Vietnam has Japanese, Korean and other auto giants to lay out production there. With the entry into force of the free trade agreement with the European Union, EU automobile enterprises will also set up factories in Vietnam, radiating the whole Southeast Asia region, making it the fastest growing production center in Southeast Asia.

From the perspective of demand, the middle class in Vietnam is expanding rapidly. According to a report by PwC, the number of middle class in Vietnam will reach 44 million by 2020 and 95 million by 2030. This trend will greatly change the life style of Vietnamese society, and the demand of consumers for high-end products will further increase.

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The industrial policy and Strategy Institute of Vietnam predicts that by 2025, car sales will increase from about 300000 in 2018 to 800000, and million by 2030.

Meanwhile, as the Vietnamese government pursues the policy of reducing carbon dioxide emissions by 2030, new energy vehicles will become a major trend in the future.

Large demand for raw materials and equipment

Vietnam's demand for plastic products is growing, but Vietnam's demand for raw materials is limited, and it relies on imports to a large extent. According to the Vietnam Plastics Association, the country's plastics industry requires an average of 2-2.5 million raw materials a year, but 75% - 80% of the raw materials are imported. The association said earlier that as the covid-19 epidemic began to ease, the demand for plastics began to pick up, the import of PP and PE plastics began to increase, and some suppliers had begun to raise prices.

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In terms of technology and equipment, most enterprises in Vietnam's local plastic industry are small and medium-sized enterprises, and they mainly rely on imports in terms of technology and equipment. A number of machinery and equipment enterprises, such as Chinese plastic machinery manufacturers such as Haitian, yizhimi, Bochuang, Jinwei, etc., have successively set up production bases, spot warehouses, subsidiaries and after-sales service points in local areas. On the one hand, they can take advantage of low-cost advantages, on the other hand, they can meet the demand of local market nearby.

According to the data of Mordor inelligence research, the compound annual growth rate (CAGR) of Vietnam's plastics industry from 2018 to 2023 is 6.63%, of which injection molding technology accounts for the highest proportion. The technology is used in the production of plastic parts such as household equipment, household electronic equipment and automobile. It is expected that in this stage, packaging, automobile, electronics and other industries will lead the market. Vietnam's processing and packaging industry is rated as a more attractive industry for machinery and equipment suppliers with an average annual double-digit growth.


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