Plastic sector under pressure from foreign firms
Vietnamese plastic firms are facing fierce competition and threats of being acquired by foreign peers, experts said at a conference held in Ho Chi Minh City on November 2.
Illustrative image (Source: cafe.vn)HCM City (VNA) –Vietnamese plastic firms are facing fierce competition and threats of being acquired by foreign peers, experts said at a conference held in Ho Chi Minh City on November 2.
According to Pham Van Bac, deputy head of the Ministry of Construction’s department of building materials, waves of foreign plastic companies have invested in Vietnam to take advantage of land leasing and taxation incentives and cheap material prices, among others. The plastic sector also has a prosperous outlook thanks to the effect of several free trade agreements Vietnam has joined.
As heard at the event, foreign investors prefer acquiring local companies with certain market share and good performance to cut costs.
Dang Tran Hai Dang, deputy director of VietinBankSc’s research centre, listed some notable acquisitions since early 2016, including the Republic of Korea’s Dongwon Systems Corporation taking over Minh Viet Packaging One Member Company Limited.
Thailand’s SCG Building Materials is planning to add 6 billion USD to consolidate its position in the Vietnamese plastic market, Dang said.
Foreign companies with quality strategies are making inroads into the Vietnamese market, putting a great pressure on the domestic production, he noted, adding that their experience and financial potential will help them easily obtain benefits offered by the free trade pacts.
The recovery of the real estate and construction industries has been stimulating demand for plastic products.
The BIDV Securities Corporation forecast average demand for plastic products will increase to 45kg per person per year in 2020, representing an annual growth rate of 4 percent.-VNA
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