Plastics industry generates $200m in Q1

13:46' 01/05/2008 (GMT+7)

VietNamNet Bridge - The nation’s plastics industry earned nearly US$200 million in the first quarter, thus is well on the way to meeting its $1 billion export target for 2008, according to the Ministry of Industry and Trade (MoIT). Previously the industry has performed sluggishly in the first quarter, owing to a lunar New Year hangover. This time around, however, MoIT statistics show that the industry recorded a year-on-year growth rate of more than 35 per cent in the first quarter. Viet Nam’s plastics exports have firm potential as its growth rates are high, just behind industrial products, pepper and coffee. Last year, plastics had an export growth rate of 135 per cent. The United Nations said that besides benefiting from comparatively low tariffs, Viet Nam’s plastics exporters were good at exploiting new markets. Vietnamese plastic products have been exported to Japan, China, India, the Middle East and Africa. However, industry officials admit that like other industries, plastics producers are confronted with escalating costs. Deputy chairman of the HCM City Plastics Association, Tran Cong Hoang Quoc Trang, said the industry was hindered by the rising cost of input materials. Pham Thi Kim Tan of Visingpack plastics, said producers were restricted as they could not afford to import raw materials. The industry imports nearly 70 per cent of the raw materials necessary for production. Besides increases of 30 per cent for raw materials and 10 per cent for shipping, producers are now subject to monthly lending interest rates of 1.5-1.6 per cent from 0.85-0.95 per cent earlier in the month. Tan said producers faced big challenges in the time ahead as they had vowed not to raise their prices in a bid to shield consumers from inflation "Most plastics producers only meet contractual obligations to uphold their reputation." Le Quang Doanh from Binh Minh plastics Joint Stock Company recommended producers focus on modernising equipment to lift output and cut input costs. Meanwhile, MoIT suggests plastics producers form alliances to meet large and long-term exporting contracts. Currently, most producers could only meet small orders as most of the nation’s 1,400 plastics producers are small to medium-sized enterprises. The ministry also advises producers to apply new technology to churn out high-tech products, which can be used in automobiles, motorbikes, electronics, toys and consumer plastic products, in a move to augment added value.