Market News

The key role played by Vietnam in Southeast Asia’s industrial growth has become a marked improvement from its past performance. Post-pandemic, Vietnam has achieved faster economic recovery to become a strategic production base for many foreign and domestic enterprises. The World Bank has estimated Vietnam to post 5.5% economic growth in 2024 with further rise to 6.0% in 2025, and it is also projected to play a major part in the overall economic development in the industrial sector.

Vietnam has a rapidly expanding plastics market estimated at 10.92 million tons in 2024 and it is expected to reach 16.36 million tons by 2029, growing at a CAGR of 8.44% from 2024-2029, based on Mordor Intelligence projections. The return of major industries to their pre-pandemic levels has intensified demand for plastic materials and technologies to manufacture packaging, consumer products, automotive, medical supplies and other plastic products.

In the same vein, rubber production has also seen marked improvement in performance post-pandemic. Vietnam’s rubber production is touted as one of the top 10 industries in the country and despite the pandemic, Vietnam’s rubber producers posted significant rise in revenues. Robust demand for rubber is attributed to the rapid developments in the country’s automotive industry which has been serving both domestic and international markets.

As the country moves to advance its manufacturing industry, Vietnam-based producers are becoming more open to the latest technologies and high-performance raw materials and compounds, providing opportunities to global suppliers who want to take a slice of the promising Vietnamese market.

Driving with the momentum of plastics industry in Vietnam is the fast-paced trend in industries such as food & beverage, which retains its lead as the top industry. Demand for packaging has been sustained by the vibrant F&B industry which has been growing annually by more than 8%, as per the Ministry of Trade and Industry. Vietnam Packaging Association has estimated that the packaging industry grows by at least 12% yearly. Injection molding and extrusion molding processes are considered the main method of packaging production in Vietnam and demand of machines has been noted for lower production costs, faster set up time, energy saving and sustainability.

The government’s program to promote the use of eco-friendly packaging has led to the implementation of several projects in this area. The growing awareness of consumers on the impact of plastic waste on the environment has also pushed demand for recycling. From 2024 to 2032, the Vietnamese recycled plastics market size is projected to post 7.6% annual growth rate to reach 532.4 kilotons by 2032, reflecting the widening opportunities on the use of recycled plastics materials for such sectors as non-food contact packaging, food contact packaging, construction, household products, etc., based on a report by IMARC Group. Recycling technologies are also seeing increased demand especially those intended for single-use packaging.

One key development in the use of environmental friendly plastic packaging is the creation of the criteria for Vietnam Eco-label which aims to encourage the use of biodegradable plastic packaging and environmental friendly plastic packaging such as polyethylene (PE) and polypropylene (PP). Apart from this, the criteria also promote proper disposal, recovery and recycling; while the use of inks, dyes and other additives must be in accordance with the health and environmental standards for packaging.

Vietnam’s unwavering attraction as an investment site has been reflected in the growing number of global companies that have invested in the country and some of the recent projects have been inveseted in the plastics industry has been the recipient of. Haitian International inaugurated an advanced experience center in Haiphong in northern Vietnam as it aims to enhance its services and strengthen its position in the Southeast Asian region. The Haitian Vietnam Experience Center spans more than 15,000 sqm to showcase Haitian's product portfolio while servicing as a hub to support customer experience. It will enable customers to tap Haitian’s innovations in the areas of CNC machine tools, die-casting machines and intelligent manufacturing solutions.

Another company, Brenntag Essentials, has opened its mixing and blending facility in Dong Nai province, a key economic zone that is about 30 kilometers from Ho Chi Minh City. The facility represents Brenntag’s investment in expanding its capability and serving its customers in the region. The facility is located close to Brenntag Vietnam's last mile operations, which includes a regional tollgate with bulk storage tanks with capacities of over 21,000 cubic meter, and a jetty catering to vessels with deadweight tonnage capacity of up to 50,000.

SKC Co. of the Republic of Korea (RoK) is building a factory in Vietnam to produce materials for biodegradable plastics. The factory of Ecovance, a joint venture between SKC and two other Korean partners, is located in Hai Phong and will produce polybutylene adipate terephthalate (PBAT), a biodegradable co-polymer widely used as feedstock for general plastics. The plant is scheduled to be operational in 2025, with production capacity of 70,000 tons of PBAT yearly. Ecovance PBAT is used in the production of general-purpose plastic, from industrial films and food containers to diapers and masks.

Vietnam’s automotive market is among the fastest-growing in Southeast Asia due to a number of factors including the economic improvement and rise in the consumer purchasing power. While motorcycles have remained the common transportation mode in various areas of the country, Vietnam has also become a lucrative market for passenger cars. Thus, it is no surprise that many well-known brands in the automotive industry now operate assembly and manufacturing plants in various provinces. Automotive plastics have been supporting Vietnam’s automotive industry that is in need of high performance and flame-retardant parts and components as the industry moves towards the application of lightweight materials for fuel efficiency.

To further strengthen the country’s automobile industry, the Vietnamese government has announced a national strategy on green growth for 2021-2030 with a roadmap that will pave the way for the shift towards use of electric vehicles. This is seen as an encouragement for the active participation of homegrown manufacturers.

To date, many Japanese and Korean automotive manufacturers are creating their special position in Vietnam’s automotive industry like Toyota, Nissan, Hyundai, Isuzu, etc. which hold substantial market share. The Vinfast Group is leading in the production of electric vehicles in Vietnam with its bid to go global by investing in other countries, such as the building of an integrated electric vehicle facility in India and further expansion in Indonesia.

ZF operates its first plant in Vietnam located in Vinfast's 70-ha Supplier Park of Vinfast Manufacturing Automobile and E scooter Plant. The plant produces chassis modules just-in-time for a local automotive manufacturer. ZF has invested more than 25 million Euro in the site.

A report from the Research and Markets indicates that Vietnam’s tire production and exports will continue to expand in the next few years up to 2031. Vietnam currently exports tire to over 100 countries, with around 80% of car tires being exported. The abundance of raw materials, low manufacturing costs and favorable investment climate have pushed Vietnam as the top 3 in the world for rubber production in the world.

Vietnam has around 830 tire companies including bicycle tires, motorcycle tires, car tires and truck tires producers. World-renowned tire manufacturers have their factories in Vietnam, such as Bridgestone, Michelin, Yokohama, Kumho, Cheng Shin, Kenda, Sailun, Guizhou Tyre, Jinyu, Goodyear, etc. Sailun, a Chinese tire manufacturer, has also expanded its production capacity. Domestic production of rubber tires has been on the rise. Shandong Haohua Tire Co. Ltd. was also given approval to build a US$500 million tire manufacturing factory in the southern province of Binh Phuoc, the biggest direct investment in the province. The factory, located at Minh Hung SIKICO industrial park, is expected to be operational in 2025.

At CHINAPLAS 2024, Vietnamese plastics and rubber manufacturers will experience the first-hand high-tech processes and innovative materials. The exhibition will highlight the most advanced automotive and tire production technologies and materials for Southeast Asian’s fast-rising manufacturers looking for wider range of machinery, equipment and engineering plastics. For more information, visit: www.chinaplasonline.com