Packaging being produced for export at Sao Mai JSC in Ha Tinh province. (Photo: VNA) According to Ngo Duc Nhat, co-founder of HCM City-based Hoang PhatPackaging Co, which specialises in carton packaging production, this marketsegment had slowed down during the social distancing period due to restrictionsin good transportation and import and export activities.
Similarly, the glass packaging segment was also affected whenconsumption of cosmetic products and high-end drinks in glass bottles sloweddown as bottled water producers preferred to use plastic packaging, Nhat told thesaigontimes.vn.
In the post-pandemic period, Vietnam’s major import markets facedmany difficulties and the risk of economic recession, so they cut back on goodsimports and outsourcing orders. That had reduced the amount of packaging theyconsumed, especially those used to pack goods for export, Nhat said, emphasisingdifficulties local pulp packaging producers had been coping with in productionactivities.
Furthermore, dependence on imported raw materials, which had beensignificantly influenced by many relevant factors such as prices of gasolineand logistics services, also affected the firm's revenues and profits, he spoketo the online newspaper.
The Vietnam Pulp and Paper Association also agreed. It saidpackaging enterprises still faced many challenges, such as consumptioncompetition among domestic enterprises due to many new production lines beingput into production, harsh competition from foreign rivals, lack of rawmaterials and high raw material prices and transportation costs.
Moreover, the market has also been experiencing many changes inpackaging trends and demands. For example, in the face of climate change,concerns about business sustainability were more important than ever, with aparticular focus on packaging and waste generated from food, beverages andconsumer products.
Therefore, domestic enterprises needed to grasp this trend to makethe necessary changes to solve these challenges.
According to the association, several enterprises had convertedpackaging production technology from recycled PP plastic pellets - a materialwith abundant domestic supply. That helped them meet environmental protectionrequirements and avoid affecting manufacturing costs.
Haiquanonline.com.vn cited a representative of DongTien Paper and Packaging Co saying that consumers' awareness about theclassification and recycling of waste was increasing. Still, recycling in Vietnamfaced many obstacles due to the lack of collection facilities and the lowquality of output materials because of old technology, leading to commercialrecycled products not having high value.
Therefore, the company invested 57.8 billion VND in a system offactories and production lines for toilet paper and packaging from recycledmaterials.
For Hoang Phat Packaging Co, Nhat said his company was striving toautomate production processes, facilitating IT appliances to improve themanagement quality and finding solutions to improve the quality and the designof packaging products to meet the requirements of the demanding partners.
Diversifying packaging products would also be included, he said.
In the long run, Nhat also called for packaging enterprises,especially small and medium-sized ones, to foster their cooperation.
He explained that currently, each enterprise often covers allstages or several stages in the production process. That forced them to dividetheir investment capital and buy out-of-date machines.
If the firms could team up, each enterprise could specialise inone stage to invest in a modern, high-quality machine for that particularstage.
Thanks to co-operation, the finished product of each stage wouldhave a high quality, and all members of the production chain would benefit fromthat.
According to Nhat, quality was the most effective language forpromotion, and open-minded and cooperative thinking would help the firms havemore customers.
A recent survey by Vietnam Report showed that there remained hugeroom for the domestic packaging industry to promote growth in the future.Specifically, when Vietnam and many countries that were the main export marketsof packaging enterprises had also switched to a strategy of living withCOVID-19, the sector had many prospects for recovery as high consumption wouldopen growth opportunities for the packaging industry.
On the other hand, free trade agreements such as EVFTA, CPTPP, andRCEP continued to open up export opportunities for industries that used a lotof packagings such as agriculture, forestry, fishery, and processing industry,along with the large demand for high-quality packaging in the world such ashigh-grade packaging paper, which presented great export opportunities for Vietnam'spackaging industry.
FiinGroup also said in its report that packaging was one of thefastest growing industries in Vietnam, with an annual growth rate of 13.4 percent between the 2015-2020 period. It was expected to continue double-digitgrowth in the coming years.
The strong development of the packaging sector in Vietnam wasdriven by solid growth of such related sectors as F&B, consumer goods,export activities, and the robust development of modern trade.
To support the development of the local packaging industry,FiinGroup mentioned several solutions for domestic packaging companies,including catching up on the key trends in global packaging materials anddesigns, such as environmentally friendly and biodegradable products orproducts from recycled materials.
They should also have a thorough understanding of therequirements/commitments on certification of origin, technical standards, andsustainable development of the bilateral and multilateral FTAs Vietnam signedin recent years to boost exports.
They should also pay attention to accelerating digitaltransformation, and automation of manufacturing processes to improve efficiencyand product quality, it said./.
VNA
