Plastic exports to the European market have felt the effects of the continuous decline of the euro over the past six months.

"Our profit from the European market in the first half of this year fell by 10 percent," said director of a plastic company in Hanoi.

He said that his company's European partners asked them to reduce their price but he couldn't due to the high cost of raw materials. Their partners then reduced orders from 5,000 tonnes of plastics to 3,000 tonnes, he added.

A representative of Nam Thai Son Import - Export Joint Stock Company, said that the downtrend of the euro affected his company because the company signed contracts with partners when one euro exchanged for 1.3 USD. At present, the exchange is around 1.1 USD, causing big losses for importers who are now rescheduling orders or changing to other commodities, the representative added.

The online newspaper Vnexpress quotes Tran Viet Anh, Deputy Chairman of the HCM City Rubber – Plastic Manufacturers Association, saying that, beside the loss from declining orders, enterprises now have to face competitiveness from more local suppliers in Europe.

European plastic producers might be able to provide products at a competitive price since the euro is low.

To overcome the new challenges, the chairman recommended Vietnamese enterprises, apart from expanding to other markets or their market share, seek cheaper materials and make changes in product structuring to lower the price for the European market, which is vital to Vietnam's plastic industry.

Estimates for export turnover in the plastic industry are over 1 billion USD for the first half of the year. According to the association, the European market accounted for 60 - 70 percent.

The industry saw a year-on-year increase of 10.3 percent as turnover hit 4.2 billion USD for the first half of the year. The industry earned 9 billion USD last year.

In the larger picture, growth also depends on how Vietnam competes with China, Japan and ASEAN countries. Exports to the European market fell across the East and South East Asia region.-VNA