The guide will cover the plastics industry in Vietnam: How to manufacture plastic goods, the plastics economy, top plastics suppliers in Vietnam, and export regulations. Plastics (aka polymers) produce consumer goods and industrial tools: Electronics, electricity, agriculture, communications, transport, and more.

Plastic is the main alternative material for wood and metal. In Vietnam, the plastics industry is one of the largest manufacturing output. We can help you manufacture consumer goods and industrial items, from phone cases to underground pipes. Contact us if you want to manufacture a plastic product in Vietnam.

 

1. Popular Plastic Products Manufactured In Vietnam

• Plastic PP sheet

• Plastic bottles and caps

• Plastic Foam (EVA Foam)

• Plastic tableware and cutlery

• Plastic bags

• Plastic Auto parts

• PET Resin

• Plastic straws

• Poly Plastic Products

• Plastic Toys

• Plastic Hangers

• Injection molding plastic

• Plastic Packaging

• Medical Plastics

• Plastic footwear and sandals

• Artificial turf In Vietnam

• Plastic Storage Units

• Polypropylene bags

• Plastic Food Storage

• Plastic Safty gear

• PVC Sponges

• Corrugated Plastic PP sheets

• Carpets

• Plastic Home siding

And thousands of other products.

2. Overview Of The Plastic Market In Vietnam

2.1. Vietnam Plastics Market Statistics:

• There are 2,000+ plastics manufacturers in Vietnam.

• Two thousand eight hundred villages specialize in plastic and recycled handicrafts in Vietnam.

• 84% plastic is produced in Southern Vietnam – near the capital HCMC. Focus on factories in the South to manufacture plastic products.

• 14% of plastic is manufactured in Northern Vietnam. Few factories operate in the North close to the Chinese border.

• Only 2% of plastic is manufactured in the Central Region.

2.2. Plastic Use By Industry In Vietnam:

• 37% of plastic is used in the construction industry (sheets, drainage pipes, etc.). Most plastic is consumed in the domestic market.

• 30% of plastic is used for technical goods such as electronics and product covers.

• 15% of plastic is used for consumer goods such as bottles and bottle caps.

• 18% of plastic is used for packaging goods such as shopping bags, cooking equipment, etc.

2.3. International Brands that source plastic products From Vietnam

• Adidas

• Mattel

• Muji

• Redwing shoes

• QVC

• Hot Topic

• Ikea

• Target

• Wal Mart

• Hasbro

• Costco

• Aldi

• Ford

• And many more!

Those are only examples of some of the world’s largest corporations using the plastics market in Vietnam to manufacture electronics.

3. Plastic Manufacturing In Vietnam: Plastic Growth

Vietnam exports $3.5B worth of raw plastics per year. Plastic production records the highest growth of virtually all materials in Vietnam. In the last decade, plastic grew at an average rate of 18% per year (between 2010-2020). This trend showed no signs of regression, and exports for plastic items are at an all-time high. Other industries that grow fast but trail behind plastics are telecommunications and textiles (read about Vietnam textiles).

The plastics industry’s rapid growth rate in Vietnam produced a diverse sector where we can source virtually all plastics and manufacture the exact product you need with injection molding technology – it is comparable to China in this regard. The main advantage is that plastics are only at the beginning stage in Vietnam, and the market has great potential for scaling.

The internal consumption of plastics grows at an astonishing rate. It is also possible to place your products directly on the domestic Vietnamese market, which grows exponentially. For reference, the average Vietnamese plastics consumption in 1990 was only 10 lbs. per person. In 2015, this number rose to 120 lbs. per person. This represents an increase in consumption of well over 1200% in less than two decades.

There are more than 2,000 plastic manufacturing factories in Vietnam. We’ve formed partnerships with plastics suppliers in industrial spheres and consumer goods. For example, a huge portion of the plastics market is also packaging, and we have exclusive relationships with packaging companies in Vietnam. So if you want a plastic package that stands out for your product, you can get it made in Vietnam.

3.1. Raw Plastics Are Imported In Vietnam

The demand for plastics in the Vietnamese economy is unprecedented. The domestic production capacity is 1M tons of raw plastic materials per year, while factories use over 4M tons of materials such as PP, PS, PE, and more. Vietnam has to import a lot of raw plastic materials to manufacture goods. As foreign investments keep pouring into the country, the demand for plastic keeps increasing.

This is not a problem for making your products, and we’ve noticed a huge increase in the quality of plastics that entered the market in recent years. This is because the Vietnamese government placed regulations on imported plastic materials into the country. As a result, the quality of plastic products grew exponentially since large companies like Apple entered the market and started manufacturing (Ex. AirPod wireless headphones) in Vietnam.

• In Vietnam, the domestic plastic manufacturing industry can only supply 25-30% of the raw materials needed to manufacture consumer goods.

Vietnam is effectively a net importer of raw plastic materials. By next year we’re likely to see over 5 million tons of raw plastic materials being imported – as more corporate giants start moving their electronics manufacturing to the state. This is not a problem for manufacturing your products in Vietnam. Vietnam signed multiple trade agreements that make the importation of raw plastics a breeze – and your suppliers do this for you.

The price average for plastic has steadily increased over the last couple of years. On average, we notice an increase of 10% per year in the price of raw plastic materials such as PP and PE (most commonly used in factories).

3.2. Plastic Manufacturing In Vietnam: Handcraft Villages

Vietnam has a strong culture of plastic product development. The industry is shifting from the production of raw plastic materials to the production of plastic consumer goods. This is ideal for Western importers who want to source custom-made plastic products. Craft villages use new and recycled plastic to manufacture products, and virtually every product under the sun can be manufactured in these villages.

The culture dates back hundreds of years ago, and over 2,800 craft villages in Vietnam can make handicrafts from plastic. The villages make a living by producing plastic items instead of growing crops. These items are for tourists and exports (we can place a custom order).

Combining plastic handcrafts with other materials such as wood and metal is possible. Vietnamese villages are smart about their material selection and can manufacture using recycled plastic. As a result, it’s not uncommon to find villages with marketplaces selling plastic processed in plastic pellets.

3.3. Plastic Manufacturing In Vietnam // The Best Suppliers & Factories

The Vietnam plastic industry encompasses all products manufactured using plastic. This includes everything from phones, tablets, laptops, and computers to pipes, solar wires, protective cases, and more. The plastic industry is integral to the economy, and Vietnam exports plastic products worldwide. In addition, international giants are moving to Vietnam to manufacture plastic products as the economy has evolved from textiles to more complex products.

• Companies like SHAPR manufacture 4K plastic TVs, and Apple manufactures AirPods (also made from plastic) directly in their giga-factories in Vietnam. Thousands of small suppliers can manufacture your plastic product in the country.

Plastic products made in Vietnam are exported worldwide and found in countries like the US, the UK, Germany, Japan, France, China, Russia, and others. Vietnamese plastics products have even penetrated markets like Africa, which currently has a huge demand for packaging products – all of which can be manufactured in Vietnam.

The plastic industry in Vietnam is growing for two reasons: 1) The massive increase in domestic plastic-product consumption (over 1000%+ growth in recent decades) and 2) The influx of foreign investments. Western enterprises have opened thousands of new factories that specialize in developing plastics products (scroll down for suppliers). These factories can manufacture simple and complex plastic products according to your needs.

Vietnam has the advantage of easy product placement in Western markets because “Made In Vietnam” products are not subject to anti-dumping taxes like Chinese products. This is because Western companies and entrepreneurs commission most plastics exports in Vietnam. If you want to avoid unnecessary duties and have an easy time importing your product back home, stick to Vietnam.

4. Regulations/Future Of Plastic In Vietnam

There is little regulation regarding plastics manufacturing in Vietnam, and the quality of the raw materials is expected to increase as multinationals set bases in the country. Future predictions are that nearly 90% of raw plastic materials will be imported as demand grows (currently 70-80%). The prices of plastics in Vietnam are relatively low and determined by the fluctuations in oil and currency changes.

We don’t expect prices to surge drastically soon, specifically not over the next 5-10 years. So if you want to get into the electronics/plastics manufacturing industry in Vietnam, now is the best time to get involved. Raw materials are easy to import, and your supplier will import the materials for you. They make it easy to manufacture the products you need using 3D molding, and the country has developed shipping supply chains to ship the product to any point in the world in as little as two weeks.

5. Injection Mold Suppliers In Vietnam // Top Suppliers List

Injection molding is a common method of manufacturing plastic products. The raw plastic materials are injected into a certain mold and hardened until they take the final shape. Injection molding is available for plastic and other materials such as metals and glass.

Injection molding technology allows you to manufacture various plastic products, including phones, toys, wires, packaging, bottle caps, automotive parts, musical instruments, furniture, mechanical parts, and more. Virtually all plastic products can be manufactured by injection molding.

6. Who Should Use Injection Molding?

Injection molding is the optimal method for people manufacturing custom products in Vietnam. Do you have an original idea that you want to manufacture? The companies below can develop a custom mold based on your designs or help you design a 3D model for the mold.

The mold will then be mass-produced to help you manufacture thousands of products. This method is used by giants such as Apple to manufacture its wireless headphones in Vietnam. We can help you find the right injection molding partner in Vietnam. (cont)

The plastics industry has achieved growth of 12-15% a year for the last five years, chairman of the Vietnam Plastics Association Ho Duc Lam said.

Its revenues topped 25 billion USD, with exports accounting for 22%, he said while speaking at the association’s congress for the 2023-2028 tenure held in Ho Chi Minh City on October 25.

The industry imports 70% of its raw materials, he said.

They jumped to 7.1 million tonnes in 2022 from 5.5 million in 2018.

Domestic supply comes from Long Son, Dung Quat and SCG oil refineries and Hyosung polypropylene plant.

Their output is nearly three million tonnes a year, and Lam said it is expected to increase in the next few years, resulting in the reduction of imports.

Vietnam exports plastics products to 160 countries and territories and they have grown at an average of 12-20% annually, reaching 5.5 billion USD last year.

Lam said there is ample room to increase exports on the back of trade deals like the EU-Vietnam Free Trade Agreement (EVFTA).

The EVFTA provides Vietnamese plastic products with a significant competitive advantage when entering the EU market with zero tariffs, he said.

Vo Tan Thanh, Vice Chairman of the Vietnam Chamber of Commerce and Industry, said the plastics industry, with its high growth rate in recent years, is one of the Government’s priority sectors.

With new policies related to the circular economy and sustainable development, the plastics industry nevertheless faces many challenges along with opportunities, he said.

Vietnamese plastic manufacturers need to be well prepared to switch to eco-friendly products, he added.

There are around 4,000 plastics companies in the country, of which 90% are small or medium-sized enterprises, the vast majority of them in the South./.

Source: Vietnam Plus

Vietnam’s plastics industry is demonstrating rapid growth and is poised to reap the rewards of opportunities disguised as challenges, such as Brexit and TPP, says Angelica Buan.

Double edged opportunities from TPP/Brexit

What do the US-led Trans-Pacific Partnership (TPP) and Brexit, UK’s planned withdrawal from the European Union, have in common for Vietnam? Both will likely create opportunities for the country’s manufacturing industry!

The TPP, a faction of negotiating partners that include Vietnam, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, and Singapore, will most likely be cancelled under the new US administration of President Donald Trump.

Analysts have observed that if there is one country that could have benefited significantly from TPP, it is Vietnam, because it would allow for increased market access for everything it is able to produce – from clothing and electronics to footwear. The deal also represented a strategic relationship between the US and Vietnam, their mutual goals that would also touch on their opposition to China’s territorial claims in the South China Sea.

Based on the Office of the United States Trade Representatives data, Vietnam is the US’s 27th largest goods trading partner with US$29.7 billion in total of (twoway) goods trade during 2013. Vietnam was the US’s 20th largest supplier of goods imports in 2013, totalling US$24.6 billion, a 21.6% increase from 2012.

Its top import categories included apparel, footwear, furniture and bedding, and machinery. Meanwhile, US imports of agricultural products, such as nuts and coffee, totalled US$1.5 billion in 2013, therefore making Vietnam its 20th largest agro supplier.

However, the demise of TPP does not leave Vietnam in limbo. According to Manila-based Asian Development Bank (ADB), Vietnam has, to date, 15 free trade agreements (FTAs) on the table that it can still sink its teeth into in order to achieve its growth targets.

Meanwhile, Brexit, expected to take effect in 2019, will affect UK’s global trade relations, including that with ASEAN countries. But Vietnam’s trade deals with the EU will give it an advantage, given that it has already concluded negotiations with the EU, whereas its other ASEAN neighbours have yet to cement FTAs with the EU.

According to a report by Asia Briefing, a subsidiary of Hong Kong-based consulting firm Dezan Shira & Associates, stalling EU trade negotiations with other member states (in the wake of the Eurozone crisis) will make Vietnam an important trade ally for low cost investment from a European perspective.

“In the face of lowered purchasing power within the Eurozone, consumers will be on the lookout for low cost goods. Given its unique position in low cost manufacturing, Vietnam will likely be more competitive than ever among European consumers. The longer that negotiations are drawn out in other ASEAN states, the more solidified Vietnam’s advantage will become,” Asia Briefing said, adding that Vietnam is likely to be the big winner in the face of Brexit.

Plastics sector, a growth driver

Vietnam’s plastic sector has shown tremendous growth in recent years with a growth rate of 16%- 18%/year, yet, it is considered a greenhorn compared to other more matured sectors such as mechanical, chemical and textile, according to a 2016 report by Vietcombank Securities (VCBS).

The fast-paced growth is attributed to high demand from sectors reliant on plastics, including consumer goods, construction, telecommunication and others. VBS finds that plastic consumption per capita increased significantly from 33kg/person/year in 2010 to 41 kg/person/year in 2015. Nevertheless, if compared to the average consumption in Asia at 48.5kg/person/year, and the rest of the world at 69.7 kg/person/year, Vietnam’s consumption is much lower.

Vietnam has several trade partners for plastic products with Japan being its largest export market for consumer products including plastic bags. Europe and the US are also potential markets, but between the two, the anti-dumping tax levied by the US on plastic bags provides more modest turnover for Vietnam.

The Vietnam Trade Promotion Agency (VIETRADE) affirms that the plastic manufacturing industry is one the fastest growing industries in Vietnam, sustaining average growth of 20%-25% a year.

The Vietnam Plastics Association also added that most of the production is focused on sectors such as packaging (37%), household appliances (29%), construction (18%) and technical products (15%).

Packaging accounts for the highest share in the plastics industry structure due to a strong development of end-product industries such as food and beverage, according to VBS. After packaging, the construction industry is also flourishing along with the recovery of the real estate and construction industry.

Packaging industry becomes sophisticated

The rising urbanisation that is breeding a fast-paced lifestyle among urbanites is promoting convenience in packaging, and therefore its growth, said market intelligence firm Euromonitor in its 2016 Packaging Industry in Vietnam report.

In 2015, the packaging segment was valued at US$4.3 billion, said Hanoi-headquartered Business Information Services (Biinform). The sector is dominated by multi-layer flexible packaging, which had a market size of US$891 million in 2015; and the flexible packaging, which serves a wide range of end-user markets.

Taking the cue, at the recently concluded Propak show, Italy-based extrusion machinery maker Amut Group says it set up technical operations in the country in 2015, and has since wrapped up several contracts for its thermoforming machinery.

Meanwhile, German exhibitor Gabler Thermoform lauded the country’s growth trajectory. Promoting its small/medium-capacity forming machinery, Gabler said that the market is big, yet competitive. It has appointed a local agent Rieckermann.

Another thermoforming machine maker Illig Maschinenbau participated at the event for the first time. However, the Germany-headquartered firm said it had already garnered the interest of customers looking for “big capacity” solutions for bottles, cups and trays.

Expressing moderate satisfaction was Taiwan’s Keenpro, which was promoting its stretch blow moulding machine for PET bottles.

Show of potential in an international platform

Foreign investors have long taken notice of the potentials of Vietnam, which is considered more laidback than its high-key ASEAN neighbours like Thailand, Malaysia or Indonesia. Biinform says that Vietnamese firms heavily rely on imported raw materials as well as machinery and equipment.

Exhibiting at the Propkak Vietnam show, German machinery maker Windmöller & Hölscher (W&H) says it has already an established presence in Vietnam and clinched customers for its film lines and flexo printing machines, as well as orders for high-speed woven bag conversion machinery.

In 2015, through its subsidiary W&H Machinery (formerly BSW Machinery), it installed the Convertex SLC 120 high-speed woven bag machine for Sadico Vietnam. The processor is able to produce both single ply AD proTex sacks as well as 2-ply AD proTex sacks, not only allowing for lighter bags and reduced material consumption but also avoiding sewing or gluing of the sack with adhesives. The W&H patent allows Sadico to seal a block-bottom valve sack with the usage of hot air instead. The Convertex allows production rates of 120 AD proTex bags/minute.

 

Sadico also invested in the extrusion coating line ecoTex 1600L and advanTex circular weaving looms. Following this, Sadico placed a repeat order for a second Convertex SLC plus a Tiratex tape stretching line. The combination of the tape stretching line and Convertex allows Sadico to produce light and strong cement bags, says W&H.

Meanwhile, also at Propak, German materials handling equipment specialist Azo introduced its Mixomat to Southeast Asia. It is said to be an efficient system that integrates several functions such as conveying, dosing, weighing and mixing in one machine.

In 2016, Azo supplied to a PVC plant in Vietnam the automated materials handling system. Plus, the company said it has already bagged several other contracts, adding that the country showed growing potential for high technology.

Challenges to be overcome by plastics sector

In conclusion, while Vietnam’s plastics industry undoubtedly shows a competitive edge among its peers in the ASEAN bloc, it still has to overcome certain hurdles, which is normal for a transitioning economy.

According to a report by the Vietnam Industry Research and Consultant (VIRAC), the plastics industry relies heavily on imported raw materials, with only 30% supplied domestically. In 2015, Vietnam imported about 3.9 million tonnes of raw materials, up by 13.6% from 2014.

VIRAC also said that of the total demand for raw plastics, such as the PP, PE and PVC, most is imported from Saudi Arabia, South Korea, Taiwan, Thailand, China and Singapore.

Nevertheless, given the challenges the country is facing, Vietnam is charging forward to keep pace with the rest of the world, if not its neighbours.

(PRA)