Vietnam industry arises with strong potential in sustainable plastics and EV production
Vietnam is estimated to post 5.5% economic growth in 2024 with further rise to 6.0% in 2025, according to the World Bank. Its industrial sector is also projected to play a major role in its overall economic development.
Vietnam’s economic growth is predicted to continue to rise in the coming years.
Vietnam has a rapidly expanding plastics market, estimated at 10.92 million tons in 2024 and is expected to reach 16.36 million tons by 2029, growing at a CAGR of 8.44% in 2024-2029, based on Mordor Intelligence projections.
Strategic investments in sustainable plastics production
Demand for packaging in the vibrant F&B industry has grown annually by more than 8%, according to the Ministry of Trade and Industry. Vietnam Packaging Association estimated that the packaging industry grows by at least 12% yearly.
Injection molding and extrusion molding processes are the main method of packaging production in Vietnam due to their lower production costs, faster set up time, energy saving and sustainability.
The Vietnam government’s program promotes the use of eco-friendly packaging. According to a report from IMARC Group, from 2024 to 2032, the Vietnamese recycled plastics market size is projected to post 7.6% annual growth rate to reach 532.4 kilotons by 2032.
This reflects the widening opportunities on the use of recycled plastics materials for sectors such as food/non-food contact packaging, construction and household products. Recycling technologies are also seeing increased demand, especially for single-use packaging.
Vietnam Eco-label is also implemented to encourage the use of biodegradable plastic packaging and environmental friendly plastic packaging, such as PE and PP. In addition, Vietnam also promotes proper disposal, recovery and recycling.
Haitian International inaugurated an advanced experience center in Haiphong, northern Vietnam, to enhance its services and strengthen its position in the Southeast Asian region. Another company, Brenntag Essentials, opened its mixing and blending facility in Dong Nai province, a key economic zone in Vietnam.
SKC Co., a South Korean company, is building a factory in Hai Phong to produce polybutylene adipate terephthalate (PBAT), a biodegradable co-polymer. The plant is scheduled to be operational in 2025, with production capacity of 70,000 tons of PBAT yearly.
Foreign investments in EVs
The Vietnamese government announced a national strategy on green growth for 2021-2030 with a roadmap that shift towards use of electric vehicles (EVs).
Many Japanese and Korean automotive manufacturers, including Toyota, Nissan, Hyundai and Isuzu, are creating their special position in Vietnam’s automotive industry.
Vinfast leads the production of EVs in Vietnam.
The Vinfast Group, a subsidiary of Vingroup in Vietnam, is leading in the production of EVs in Vietnam. ZF also operates its first plant in Vietnam. The plant produces chassis modules just-in-time for a local automotive manufacturer. The company has invested more than EUR 25 million in the site.
Rubber production remains high, favoring tire production
A report from the Research and Markets indicates that Vietnam’s tire production and exports will continue to expand in the next few years up to 2031. Vietnam currently exports tire to over 100 countries, with around 80% of car tires being exported.
The abundance of raw materials, low manufacturing costs and favorable investment climate have pushed Vietnam as the top 3 in the world for rubber production in the world.
Vietnam has around 830 tire companies, including tires producers for bicycle, motorcycle, car and trucks. World-renowned tire manufacturers have their factories in Vietnam.
Sailun, a Chinese tire manufacturer, also expanded its production capacity. Shandong Haohua Tire was also given approval to build a US$500 million tire manufacturing factory in the southern province of Binh Phuoc. It is expected to be operational in 2025.
At CHINAPLAS 2024, Vietnamese plastics and rubber manufacturers will experience the first-hand high-tech processes and innovative materials, especially the most advanced automotive and tire production technologies.
