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Growing plastic industry faces challenges   2010-04-02 - Viet Nam News

The plastics sector has great potential for development but faces a number of challenges, according to the Viet Nam Plastics Association.


The association expects that the sector's export value could at best grow 16 per cent this year, but just 5.7 per cent if it struggles to meet its full potential.

There is huge demand locally for plastics – while Japan, the US, Germany and the Netherlands represent the main export markets, it says.

Japan, Viet Nam's largest plastics export market, imported products worth US$121 million last year. The US imported plastics worth nearly $100 million, while Germany imported $35 million worth of plastics. Other nations, in descended order of export value, were the Netherlands, Cambodia, the UK, France, Malaysia, China and the Philippines.

However, the sector's total export revenue last year was just $802 million, down 13 per cent on 2008.

According to the association, Viet Nam now has 2,000 plastics makers employing 200,000 labourers. Last year, the local market was worth about $3.7 billion. The sector consumed roughly 2.5 million tonnes of plastic raw materials.

Around 85 per cent of plastic materials for production are imported, particularly from Asian countries such as Thailand, China and Singapore. Costs for the materials usually account for 70-75 per cent of the total sale price, according to the association.

The crude oil sector – the main supplier of material for plastic production – is expected to raise the barrel price to $80, which will be passed on to plastics makers.

To reduce dependency on imports, the industry plans to produce 1.38 million tonnes of raw materials by the end of this year.

The average consumption per capita in Viet Nam nearly doubled from 16kg in 2006 to 28kg last year. That figure is expected to reach 32kg this year, the association says. However, these figures are low compared to other regional countries and developed nations,it reports.

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