Market Trends of Vietnam Flexible Plastic Packaging Industry
The Growing Plastic Industry is Expected to Boost Market Demand
- In Vietnam, consumer plastic packaging is fueled by rising demand from food and non-food sectors. In 2023, the flexible packaging segment, encompassing multi-layered and mono-layered options, led the market, making up 75% of the overall market. Plastic bags are pivotal in this segment, accounting for 15% of Vietnam's plastic export turnover (Source: FiinGroup).
- Consequently, the government, ministries, and enterprises nationwide have collaboratively crafted detailed, long-term plans spanning 5 to 10 years. Over the past half-decade, Vietnam's plastic industry has consistently notched double-digit growth, averaging between 12% and 15% annually.
- According to a study by EuroPlas Group, the nation's production capabilities encompass diverse materials, including PVC, PP, PET, PS, and PE, with a collective output nearing 3 million tons annually. Vietnamese plastic products have reached over 160 countries, with a notable presence in key markets like the US, Germany, France, the UK, Italy, the Netherlands, Spain, Japan, and Australia. A significant advantage for Vietnamese plastic exports is their exemption from anti-dumping duties, setting them apart from many Asian counterparts.
- The Ministry of Industry and Trade's Vietnam Plastic Industry Development Plan, looking ahead to 2025, emphasizes a structural shift. Specifically, there is a push to boost the production of plastics used in construction and engineering, featuring specialized physical and mechanical properties tailored for industrial processes.
- According to the General Statistics Office of Vietnam, revenue from manufacturing rubber and plastic products in 2024 is expected to reach USD 21.8 billion from USD 17.97 billion in 2020. However, as the economy evolves, the industry must pioneer changes to stay relevant. By embracing these shifts, the plastic industry will not only aid in Vietnam's sustainable economic growth but also offer lasting profitability for businesses.
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The Food Industry is Expected to Drive Market Growth
- Shifting food preferences in the country, such as a rising appetite for luxury foods and a trend towards dining out, are becoming pivotal demand influencers. These preferences are molded by many factors, including income upticks, urbanization, evolving population demographics, health and eco-consciousness, a rising female workforce, and the changing retail landscape.
- According to a study by the Government of Canada, many factors influenced customer preferences, including income upticks, urbanization, evolving population demographics, health and eco-consciousness, a rising female workforce, and the changing retail landscape. In 2023, Vietnam's fresh and processed meat imports amounted to USD 1.5 billion, equivalent to 783.8 thousand tonnes, solidifying its position as the 27th largest market globally. China was the leading meat supplier to Vietnam, accounting for 15.9% of the market, followed by the United States at 8.3% and Japan at 7.7%.
- In 2023, Saigon Trading Group - SATRA (Vissan) dominated Vietnam's processed meat market, commanding a 46.1% share. Following behind were Charoen Pokphand Group (CP) at 13.3% and Halong Canned Food JSC (Ha Long) at 3.4%. In 2023, Vietnam's per capita poultry consumption stood at approximately 17.58 kilograms, as reported by the OECD. Projections indicate a slight increase to 17.95 kilograms in 2024.
- The OECD reported that Vietnam's per capita poultry consumption stood at approximately 17.58 kilograms. The food processing industry presents a lucrative investment opportunity for foreign firms. This scenario sets the stage for foreign players to collaborate with local food processors or opt for outright acquisitions. European Union (EU) firms, leveraging the robust trade relations between Vietnam and the EU and the favorable perception of European goods among Vietnamese consumers, stand in a particularly advantageous position to tap into Vietnam's market.
- Additionally, EU companies hold a notable edge over many developed nations owing to the EU-Vietnam Free Trade Agreement (EVFTA). Over the next decade, this agreement is set to phase out nearly all import duties between Vietnam and the EU. With EVFTA in place, the bilateral agri-food trade is poised to witness growth. This means a surge in the availability of specialty Vietnamese products in the EU and a more significant presence of European goods in Vietnam. Such agreements would further drive the demand for flexible plastic packaging for the food industry .
