Vietnamese packaging firms feel the heat
Thursday, May 4,2017AsemconnectVietnam - Vietnamese packaging firms, especially small and medium sized, have to compete with foreign firms which have advantages in technology and financial capability, and must rely on imported materials.
According to Euromonitor, a market survey firm, the demand for food packaging in Vietnam in 2015 was 3.915 million tons, while the figure will be 5.396 million tons by 2020, up by 38%.
Meanwhile, the demand only increased by 13% in the world in the 2015-2020 period.
Robert Graves, general director of Tetra Pak Vietnam, said Vietnam is among the top 10 markets for Tetra Pak. In 2016, the manufacturer provided 7.5 billion packages to the domestic market, gaining two-digit growth rate over the year before, the highest rate in last 25 years.
Graves believes that the demand for F&B packages would even be higher in two years because of higher consumption of canned milk and fruits.
Tetra Pak predicted that the Vietnamese dairy product consumption, which was 25 liters per head in 2015 would be increasing to 28 liters by 2020, which shows the great potential of the Vietnamese market, in which hard paper packaging accounts for 62.2% and aluminum packaging 23.3%. Meanwhile, the consumption of other liquid food would be 3.3 billion liters.
According to Nhan Huc Quan, general director of New Toyo, as the production cost in Vietnam is lower than Singapore, Thailand and China, and the demand for F&B industry is increasing rapidly, foreign manufacturers, especially from China, have been flocking to Vietnam.
Most recently, Lee & Man from China spent US$280 million to build a 420,000 ton packaging factory in Vietnam.
Quan commented that foreign invested enterprises (FIEs) have greater advantages than Vietnamese.
“The technologies they use are modern with from-A-to-Z production lines. Therefore, their production cost is low and the productivity is high,” she explained, adding that the market segment of high-quality products is dominated by FIEs, including Swedish Tetra Pak and German Combibloc.
Thai, South Korean and Japanese now hold 90% of the plastic packaging market share.
Though FIEs joined the domestic market later than Vietnamese, they have corporate governance experience and powerful financial capability which allow them to sustain losses for 3-5 years before making profits.
Tran Quang Minh, director of Thu Quang Packaging, complained that foreign enterprises mostly import packages rather than use domestically made products. Some enterprises use domestic products, but always claim price decreases.
Meanwhile, Vietnamese package firms are remain passive in input material price control.
Plastic package manufacturers are concerned about the Polypropylene plastic particles (PP) import tariff which has increased to 3%. The paper material price has increased two or three times since February, up 10% in total.
Source: vov.vn
Masan successfully disbursed Phase 1 of USD650 million syndicated loan
Viettel Global (VGI)'s consolidated revenue exceeded USD1 billion, pre-tax profit over VND3,000 billion in 2022
Gelex (GEX) sets a profit target of nearly VND1,300 billion in 2023
VIX Securities (VIX) expected to increase profit after tax by 73.1% to VND540 billion in 2023
VietinBank Securities (CTS) sets a profit target of more than VND230 billion in 2023, paying 10% dividend
Thai Nguyen International Hospital (TNH) sets a profit after tax plan of VND150 billion in 2023
Lienvietpostbank's own path for 15 years
PVMachino (PVM) divested from Nippon Seiki for over VND149 billion
SSI Research revised down forecast PV Gas’s revenue and net profit in 2023
Petrosetco's profit (PET) decreased by 50% to VND35 billion in the first 2 months of 2023
GC Food (GCF) target VND523 billion revenue in 2023
Mobile World (MWG): Revenue of Mobile World and Dien May Xanh chains down 32% in the first 2 months of 2023
SHS Securities reported a profit of VND197.2 billion in 2022 after the audit
IDI Multinational Development and Investment (IDI): Profit expected down 66.7% to VND186 billion in 2023
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 ...