FTAs pack big opportunities
Friday, September 30,2016AsemconnectVietnam - In advance of the free-trade agreements on Vietnam’s horizon, foreign companies are looking for strong investment opportunities-like those found in the country’s packaging industry.
According to Nguyen Ngoc Sang, chair of the Vietnam Packaging Association, packaging is among the fastest-growing industries in Vietnam. The average annual growth for packaging and labelling stands between 15 percent-20 percent, especially in baby food and processed food packaging.
Sang added that investors from Thailand, the Republic of Korea, and Taiwan are excited about Vietnam’s free trade agreements, including the Trans-Pacific Partnership and the Asean Economic Community. These investors either set up their own factories in Vietnam, or go the fast route via takeovers of Vietnamese firms.
Indeed, the Vietnamese packaging industry has witnessed an investment wave from overseas in recent years, much of it coming via mergers and acquisitions (M&As). The most notable example is Thailand’s SCG, which spent almost $44 million last year to acquire an 80 percent stake in Tin Thanh Packaging JSC. Tin Thanh is among Vietnam’s five major packaging companies, generating $41 million in revenue each year.
In August, Srihai Superware, also from Thailand, announced its plant to conduct-M&As with Vietnamese plastic firms. The Thai melamine producer aims to expand business quickly in Vietnam, which it regards as a strategic market with increasing global integration.
In 2015, the Republic of Korea’s Dongwon Systems Corporation bought Minh Vietnam Packaging JSC at $21.86 million, and spent $38.81 million to take over Tan Tien Packaging JSC. MeiwaPax Group from Japan also purchased a controlling stake in Saigon Trading and Packaging JSC.
According to Vietcombank Securities’ market report for the second half of 2016, the packaging industry in Vietnam, will benefit from fast-growing consumer goods, textile and garment, and chemical industries, which are in need of sophisticated wrappings and labels. In the near future, more foreign investors are set to launch large-scale packaging factories in Vietnam, strengthening competition in the market.
‘Plastic and paper packaging are the highest potential sectors for growth. Overseas firms like SCG (Vina Kraft), Lee&Man, and Cheng Yang have recently expanded their mills, which can stiffen competition in the Vietnamese market for 2017 and 2018′, noted the analysts.
Germany, one of the world’s major producers for packaging and labelling, is also a big player in the Vietnamese packaging scene. Together with Tetra Pak from Switzerland, the German packaging giant Combibloc currently dominates the milk packaging sector in Vietnam.
Bjoern Koslowski, deputy head of the German Industry& Commerce Vietnam, told VIR that up till now, German companies in Vietnam have invested $1.4 billion in supporting industries, including packaging and labelling.
‘Germany has been a renowned supplier for high-quality materials in Vietnam. In 2015, Vietnam imported close to euro 80 million (US$89.2 million) of production materials from Germany, second to China only,’ noted Koslowski.
http://english.vov.vn/economy/ftas-pack-big-opportunities-332167.vov
Indian research intern: Vietnam’s clean energy transition accelerates
Nordic countries share green solutions for circular economy with Vietnam
Vietnam promotes negotiations of FTA with Mercosur
Vietnamese, Dutch localities step up cooperation
Vietnam joins Multilateral Convention to tackle tax evasion and avoidance
Vietnam, Mexico see ample room for trade cooperation: workshop
Hoa Binh province exports first batch of fresh sugarcane to US
Aviation firms ready to welcome Chinese tourists
Vietnam, South Africa explore cooperation potential
Mong Cai int’l border gate facilitates Vietnam’s exports to China
Vietnam’s trade with top 11 Asian markets is set to grow significantly
Foreign direct investment projects go green
Vietnam has dual opportunity from offshore wind power: Danish Ambassador
Mini Thailand Week kicks off in Quang Ninh
Plan on implementing Decision No. 327/QD-TTG dated March ...
Concretize viewpoints, objectives, tasks and solutions of the plan in accordance with practical conditions of the locality, associating ...Plan on implementing national environmental protection ...
Implementation plan of marine aquaculture development ...
Program on conservation and development of Vietnamese ...
Plan on improving quality of human resources to 2025 and ...
Efforts taken to turn culinary culture into national ...
The Vietnam Cuisine Culture Association (VCCA) is taking steps to implement a project to build and develop Vietnamese culinary culture ...Vietnamese cuisine making a name for itself with ...
Vietnam advance to next round of AFC U20 Women’s Asian Cup
Cultural tourism and traditional values promoted through ...