The plastic packaging market in Vietnam is developing rapidly to meet the increasing demand and is widely used in various sectors such as food, healthcare, chemicals, industrial, and agriculture. Many domestic and foreign businesses have invested in and developed plastic packaging production in Vietnam, creating competition and diversity in terms of quality and prices.
Global plastic packaging market
Vietdata estimates that the global plastic packaging market is expected to increase from 99.92 million tonnes in 2023 to 119.02 million tonnes in 2028, with a CAGR of 3.56% during the forecast period (2023-2028).
There are many initiatives towards the best use of recycled plastic, both from manufacturers and consumers. For example, PET bottles have become popular in many segments, including beverages, cosmetics, hygiene products, and detergents, which were previously mainly sold in polyethylene (PE) bottles. Coca-Cola plans to use 50% recycled PET in its containers by 2030. In addition, Unilever is committed to making 100% of its plastic packaging reusable or recyclable by 2025.
The plastic packaging market in Vietnam
Vietnam currently has about 14,000 packaging businesses, of which approximately 9,200 are plastic packaging enterprises.
We estimate that the growth of the plastic packaging sector in Vietnam in 2023 will be driven by increased spending on non-alcoholic beverages and food. Accordingly, the non-alcoholic beverage segment is projected to reach a revenue of 10.22 billion USD in 2023, a 10.4% increase from 2022, with an average annual growth rate of 6.28% from 2023 to 2028. The food market in Vietnam is expected to reach 96.47 billion USD in 2023, a 9% increase from 2022, with an average annual growth rate of approximately 8.22% from 2023 to 2027. The plastic packaging market in Vietnam is forecasted to have a CAGR of 8.39% during the 2023-2028 period.
Based on the main plastic types, plastic packaging companies are divided into two main groups:
PE plastic packaging production group: PE plastic, also known as Polyethylene, is characterised by its "3 NOs": non-conductive, non-water-permeable, and non-heat-conductive. It has a relatively short heat resistance time but an impressive heat resistance up to 230 degrees Celsius.
PP plastic packaging production group: PP plastic, short for Polypropylene, is a type of polymer with high mechanical strength. It has a good surface gloss, is waterproof and gas-permeable, and is not easily oxidized. PP plastic has the highest heat resistance, with a heat limit of 130 - 170 degrees Celsius.
PE plastic packaging production group
An Phat Bioplastics
An Phat Xanh Plastic Joint Stock Company was formerly known as Anh Hai Duy Co., Ltd., which was established in 2002.
The company primarily operates in the production of various plastic packaging. It is the largest enterprise in the industry with 7 packaging production plants with a total capacity of 108,000 tons per year and 1 An Phat - Yen Bai CaCO3 additives plant with a capacity of 222,000 tons per year. The main product is PE plastic bags.
The company's net revenue in 2020 reached about 7,400 billion, increasing nearly 70% in 2021 and expected to increase by over 15% in 2022. However, the after-tax profit is expected to decrease by more than 60% in 2022 due to the decrease in plastic resin prices leading to a reduction in commercial activities and the setting up of a reserve for inventory to avoid market price fluctuations.
HPC
Established in 1974, Hưng Yên Plastic Joint Stock Company, formerly known as Tiền Phong Youth Plastic Factory.
To date, HPC has developed up to 10 factories located in Hưng Yên, Hải Phòng, Ho Chi Minh City, with a total average output of 6000 products/month. The main focus is on PE packaging products, including 75% supermarket bags, 24% garbage bags, and 1% stretch film. As a supplier to large corporations and enterprises in Japan, HPC's products are present in many stores and large supermarket chains such as Family Mart, Super Mart, and Aeon.
In 2020-2021, HPC's net revenue was nearly equal to about 2,500 billion VND, increasing by nearly 30% in 2022. After-tax profit decreased by nearly 20% in 2021, but saw a strong increase of around 90% in 2022, reaching nearly 10 billion VND.
Tapack
Tan Tien Plastic Packaging Joint Stock Company, formerly known as Vietnam Plastic Company, was established in 1966.
The company's main activities involve the production and sale of packaging products and raw materials, as well as plastic industry supplies. Tapack officially operated as a joint stock company from 2004. The company has 01 printing factory, 02 packaging factories, and 01 branch in Hanoi. Tapack's main products are composite plastic packaging processed for other manufacturing units, with 80% used for food and consumer goods packaging. Additionally, the company provides printing services for some other units. Tapack has established and maintained relationships with major customers such as Unilever Vietnam, Ajinomoto, Vedan, Miwon, Acecook, Trung Nguyen, Kinh Đo, Bayer Vietnam, and Vinamilk.
The company's net revenue increased to around 1,900 billion VND from 2020 to 2022. The after-tax profit experienced significant fluctuations, reaching approximately 140 billion in 2020, decreasing by nearly 100% in 2021, and then increasing by over 500% in 2022.
Duy Tan
Established in 1987, Duy Tan is a brand that originated from the Duy Tan Plastic Production Complex.
Duy Tan currently operates 5 factories, including one in Duc Hoa Ha, Long An province, which was the first in Vietnam to apply the "bottle to bottle" technology - recycling used plastic bottles into plastic pellets for producing new plastic bottles, reducing the use of fossil raw materials. In addition to its main product, PE plastic packaging, Duy Tan also produces PET plastic bottles.
Duy Tan has recorded fluctuating gross revenue around 5,000 billion VND from 2020-2022. The post-tax profit has decreased over the years, specifically around 500 billion VND in 2020, decreased by over 15% in 2021, and further decreased by over 40% in 2022.
PP plastic packaging production group
Thuan Duc
Established in 2007 in Hung Yen province by a leading group of shareholders headed by Mr. Nguyen Duc Cuong.
The company operates 6 manufacturing plants, including 4 in Hung Yen and 2 in Thanh Hoa, with a workforce of over 1,800 employees. It specializes in producing PP supermarket bags.
The company's net revenue experienced strong growth of about 80% in 2021, with a further increase of over 30% in 2022, reaching nearly 3 trillion VND. The post-tax profit fluctuated around 80 billion VND.
Trung Dong
Trung Dong Joint Stock Company was established in 1990, with its headquarters located in the Tam Phuoc Industrial Zone, Dong Nai.
It operates 2 manufacturing plants with capacities of 28 million bags per month and 10 million bags per month respectively, focusing on the production and trading of various PP packaging.
Trung Dong's net revenue fluctuated around 2 trillion VND from 2020 to 2022, with post-tax profits showing a similar fluctuation around 50 billion VND.
Batico
Batico Joint Stock Company, established in 1995, was one of the first private plastic packaging companies in Vietnam.
It runs 2 manufacturing plants in the Duc Hoa - Long An area, focusing on producing various types of bag packaging, with a product cutting productivity of 3,000,000 m2 per month.
The company's net revenue fluctuated around 1.3 trillion from 2020 to 2022. The post-tax profit experienced a sharp decline of nearly 65% in 2021, followed by an increase of over 20% to reach around 30 billion VND.
Phu My
Phu My Packaging Joint Stock Company, formerly known as Huong Phong Packaging Factory, was established and put into operation in 2004. In 2008, the company transformed its business model and operated as a joint stock company.
With a current charter capital of 42 billion VND, the company focuses on its core business of producing and trading PP packaging products. It is a unit of PetroVietnam Fertilizer and Chemicals Corporation and receives support from the parent company in terms of capital, business strategy, and marketing channels. The company has a stable customer base and a production capacity of 45 million bags per year. Its main markets are Italy, the UK, South Korea, Thailand, and some other Asian countries.
In 2020, the company's net revenue reached about 400 billion VND, with a strong increase of nearly 50% in 2021 and a decrease of over 5% in 2022. The after-tax profit maintains a stable growth trend around 6.5 billion VND.
BBS
Vicem Packaging But Son Joint Stock Company, formerly known as Nam Ha Cement Packaging Company, was established in 1996 and converted to a joint stock company in 2003.
The company specializes in producing cement bag shells with a capacity of 75 - 80 million products per year. Its cement bag products have been highly regarded by customers for their high and consistent quality in the market. Currently, the company supplies cement bag shells to large cement plants domestically, such as But Son Cement Company consuming over 70% of the company's output, Bim Son Cement Company, Hoang Mai Cement Company, and Nghi Son Cement Company.
The brand's net revenue has experienced slight fluctuations over the years, reaching approximately 500 billion VND. After-tax profits increased by over 50% in 2021, reaching over 10 billion VND, then decreased by nearly 25%.
Vinh
Vinh Plastic Packaging Joint Stock Company, formerly known as the Plastic Packaging Factory under the Economic Cooperation Company - Military Zone 4, was established in 1996 and converted to operate as a joint stock company in 2003.
The company's main products include various cement bags, fertiliser bags, grain bags, food bags, animal feed bags, and industrial bags, which are distributed nationwide. The company is currently a supplier of KP bags, KPK bags, Jumbo bags, and large slings to cement production plants such as The Vissai, Nghi Son Cement, etc. The annual output is 100 - 120 million cement bag shells and 2,400,000 Jumbo and sling bags.
The net revenue increased by over 10% in 2021 and decreased slightly in the following year, reaching approximately 1,000 billion VND. After-tax profits fluctuated slightly, hovering around 28 billion VND.
Vietnam's plastic packaging has a competitive advantage over many other Asian countries such as China and Thailand due to the removal of anti-dumping duties on Vietnamese products when exported to Europe. The biggest competitors of the company in the global market are Chinese enterprises. However, China has now banned the production of ultra-thin plastic packaging products. As a result, the former customers of these enterprises are gradually shifting towards plastic packaging companies in the Vietnamese market. However, for production, besides their own capital, plastic enterprises must use bank credit. Obtaining bank loans is not entirely easy for enterprises, especially small ones. Moreover, up to 95% of Vietnam's plastic enterprises are small and medium-sized, privately owned enterprises. Furthermore, the prominent characteristic of the Vietnamese plastic industry in general, and plastic packaging enterprises in particular, is the need to import 85-90% of raw materials to serve the production process. Therefore, exchange rates have a significant impact on the business operations of enterprises. Recently, the high exchange rate is sure to affect the business results of the plastic industry in the fourth quarter of 2023.
Source: Vietdata's 2022 market report on the Vietnamese plastic packaging industry