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1

PLASTICS INDUSTRY REPORT Q1/2018

TABLE OF CONTENTS

2

Part Page Part Page

Table of abbreviation 4 4. Input materials 26

Executive Summary 5 5. Production 34

I. Business environment 6 6. Consumption 37

1. Macroeconomics 6 7. Import - Export 40

2. Legal Framework 11 8. Situations in some typical countries 44

3. Trade Agreements 14 9. Production in some regions 49

II. The world’s market 18 10. Key players in the industry 51

1. Definition and classification 19 III. The Vietnam’s market 53

2. Chain value of the industry 20 1. History and the development of the industry 53

3. Machinery/ Technology 22 2. Machinery/Technology 55

TABLE OF CONTENTS

3

Part Page Part Page

3. M&A activities in the industry 57 1. Prospects 84

4. Inputs 60 2. Forecast 87

5. Production 64 3. Industrial development plan 91

6. Consumption 71 VI. Enterprise analysis 94

7. Import - Export 74 1. Enterprises introduction 94

8. Competitive analysis 77 2. Financial analysis 99

IV. Industrial risks 81 VII. Appendix 106

V. Prospects and forecasts 84

TABLE OF ABBREVIATIONS

TABLE OF ABBREVIATIONS

4

Abbreviation Full name Abbreviation Full name

AEC ASEAN Economic Community GDVC General Department of Vietnam Customs

SE Selling expense GSO General Statistic Office of Vietnam

G&A expense General & Administrative expense Co. Ltd Limited Liability

EVFTA Vietnam-EU Free Trade Agreement NCA Non-current asset

FTA Free Trade Agreements PE Polyethylene

GDP Gross Domestic Products PP Polypropylene

BOD Board of Director PS Polystyrene

HIPS High Impact Polystyrene PVC Poly Vinyl Chloride

HPE High Density Polyethylene VPA Vietnam Plastic Association

LLDPE Low Density Polyethylene VTICVietnam Industry and Trade Information

Centre

SBV State Bank of Vietnam

EXECUTIVE SUMMARY

5

• The plastics industry is one of the industries growing stably in the world over

the past 50 years.

• Currently, packaging plastics is the biggest segment with 26% of the total

output.

Content is intentionally removed for demo purpose

• Vietnam’s plastics industry has a large number of enterprises

with nearly 4,000 ones and 200,000 of labor.

• Plastic production output in 2016 was estimated at nearly 6.63

million tonnes.

6

TÓM TẮT BÁO CÁO

• Currently, Vietnam’s plastic industry has to import materials from the

outside, with an import volume of 80%.

• The industry revenue has risen rapidly in the period of 2013 – 2016, with

a CAGR of 21.1% and an estimated consumption of 15.61 billion USD in

2017.

• The industry is facing trade deficit as import turnover exceeding greatly

export volume.

• An Phat (AAA) is a leading enterprise in terms of exporting plastic

products as of 9M/2017 and producing packages in Vietnam.

CONTENT

Part 1. Business environment

1. Macroeconomics

2. Legal Framework

3. Trade Agreements

7

Part I. Business environment

1. Macroeconomics

8

Source: VIRAC, GDVC

Source: VIRAC, GSO

USD/person/year

USD billion

GDP per capita, 2013 – 2017

Plastic material imports and contribution to total turnover,

2010 – 2017


9

Source: VIRAC, SBV

Source: VIRAC, SBV


1. Macroeconomics

VND/USD exchange rate, 2013 – 12/2017

VND/CNY exchange rate, 1/2016-12/2017


10

Source: VIRAC,, MOIT

Source: VIRAC, Indexmundi


1. Macroeconomics

USD/barrel

VND/kWh

Average price of crude oil and natural gas in the world, 2014 – 12/2017

Average electricity price, 2007 – 2017


11

Source: VIRAC, GSO


1. Macroeconomics

%

Monthly CPI fluctuation, 2014 – 2017

Lending interest rate, 2011 – 2017e


12

CONTENT


1. Macroeconomics

2. Legal Framework

3. Trade Agreements

13


2. Legal framework


14


2. Legal framework


15


2. Legal framework


16

CONTENT


1. Macroeconomics

2. Legal Framework

3. Trade Agreements

17

Impact of AEC to Vietnamese plastic businesses


3. Trade agreements


18

The impact of TPP to Vietnam's plastics industry

Regional Comprehensive Economic Partnership (RCEP) and the plastics industry in Vietnam


3. Trade agreements


19

Vietnam Korea Free Trade Agreement (VKFTA) and Japan-Vietnam Economic Partnership Agreement (VJEPA)

Vietnam-EU Free Trade Agreement (EVFTA)


3. Trade agreements


CONTENT

Part II. The world’s market

1. Definition and classification

2. Value chain of the industry

3. Machinery/ Technology

4. Inputs

5. Production

6. Consumption

7. Export - Import

8. Situation in some typical countries

9. Production in some regions

10. Key players in the industry

20

21

Definition

Classification




22

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export - Import




23



Source: VIRAC


24

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export - Import




25

Source: VIRAC, BPF

• There are many technologies used to produce plastics. The British Plastics Federation mentions some methods like the following:

Methods Main materials Main products

Blown Film

Extrusion- Blow

Profile bar extrusion

Injection Blow Molding

Injection Molding

Injection– Blow - Stretch

Recycling


3. Machinery/Technology


26

5 most common methods to produce plastics are :




27

Source: VIRAC, PlasticinsightSource: VIRAC, Plasticinsight

Source: VIRAC, Plasticinsight



USD billion

USD million Thousand tons

Plastic machinery/ equipment production value in some typical countries, 2016

Shares of plastics machinery production in the world 2015

Top 10 most imported countries of injection machines

in 2016


28

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export - Import




29

Raw materials for the production of plastic are plastic resin, recycled plastic, and also additives

Recycled plastic beads production procedure


4. Inputs – 4.1 Definition and classification


30

Plastic resins production procedure


4. Inputs – 4.1 Definition and classification


31

Source: VIRAC, Europe PlasticSource: VIRAC, Europe Plastic


4. Inputs – 4.2 Plastic resin

Million tons

Global plastic resins production, 2009 – 2016e Plastic resins production’s share by countries in 2016


32

Source: VIRAC, ICIS

Source: VIRAC, ICIS


4. Inputs – 4.2 Plastic resin

Million tons

Global demand for plastic resins, 2010 – 2016e

Demand for plastic resins by regions, 2015


33

• Recycled materials:

Source: ITC, UN Comtrade

Source: ITC, UN Comtrade


4. Inputs – 4.3 Recycled plastics

USD million

Recycled plastic material, 2012 – 2016e

Recycled plastic material‘s export structure in the world, 2016Content is intentionally removed for demo purpose

• Additives:

34


4. Inputs – 4.4 Additives


35

Source: VIRAC, UN Comtrade

Source: VIRAC, UN ComtradeSource: Plastics Engineering


4. Inputs – 4.4 Additives

USD billion

USD millionThousand tons

Consumption of plastics additives by region, 2016

Top 5 countries with highest additives export value

in the world, 2016

Additives consumption value in the plastics industry

in the world, 2013 – 2021f


36

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export - Import




37

Source: VIRAC, Plastics Europe

Source: VIRAC, Plastic Europe


5. Production

Million tons

Million tons

Global plastics production, 2011– 2016

Production of some countries in the world, 2015


38



5. Production

Production by region, 2015


39

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export - Import




40

Source: VIRAC

Source: VIRAC


6. Consumption

Million tons

Kg/person

Source: VIRAC

Global plastics consumption, 2011 – 2015e

Consumption per capita structure by regions/countries, 2015

Plastic consumption by region, 2015


41

Source: VIRAC, Statista



6. Consumption

Global plastic consumption by application, 2016

CAGR in plastic consumption in some regions,

2015 – 2019f


42

CONTENT





4. Inputs

5. Production

6. Consumption

7. Export – Import




43


7. Export - import

Billion USD

Plastic export - import , 2012 – 2016E


44


Source: VIRAC, ITC, UN Comtrade


7. Export - import

USD billion

Export – Import value of popular plastic products, 2016e


45

Source: VIRAC

Code Description

Code of exports according to the products classification system


7. Export - import


46

Source: VIRAC, ITC, UN Comtrade


7. Export - import

USD million

Top plastic im-exporters, 2016e


47

CONTENT





4. Inputs

5. Production

6. Consumption





48

Source: VIRAC, StatistaSource: VIRAC



8. Situation in some typical countries – 8.1 China

USD billion

USD billion

Million tons

Plastic export - import value of China, 2016

Chinese plastics industry’s revenue, 2014 – 2019f

Chinese production 4/2015 – 12/2017


49

Source: VIRAC, Deutsche Bank Research

Source: VIRAC, PlasticEurope


8. Situation in some typical countries – 8.2 Germany

Source: VIRAC, GTAI

Plastic volume growth rate, 2011 - 2016

Top 5 countries with the highest plastic consumption value

in Europe, 2015

FDI structure in plastic by project of some countries, 2014


50

Source: VIRAC, Statista.

Source: VIRAC, ACC


8. Situation in some typical countries – 8.3 The United States

Million tons

American plastic production, 2010-2015 Rubber and plastic production growth in America, 2016e-2020f


51

Source: VIRAC , JPIF

Source: JPIF, VIRAC Source: JPIF, VIRAC


8. Situation in some typical countries – 8.4 Japan

Billion tons

Source: VIRAC , JPIF Source: VIRAC , JPIF

Japanese plastic production, 2012 -6/2017

The proportion of plastic production by product, 6/2017


52

CONTENT





4. Inputs

5. Production

6. Consumption





53




Top 5 most exporting industries in Southeast Asia, 2016

Top 5 most importing countries in Southeast Asia, 2016



54

CONTENT





4. Inputs

5. Production

6. Consumption





55

No. Company Revenue

(USD

billion)

Overview

1BASF

corporate

2

Formosa

Plastics Group

3Dow

Chemicals

4SABIC

corporate

5

E. I. du Pont

de Nemours

and Company

6 Convestro AG




CONTENT

Part III. The Vietnam’s market

1. History of development and establishment


3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import

8. Competitive analysis

56

57

Part III. Vietnam’s market

1. History of establishment and development


58

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


59




2. Machinery /Technology

USD million

Export - Import of the plastic and rubber industry,

2009 – 2016e

Structure of the machinery importing market in the plastics

Industry, 2016e


60

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


61


3. M&A activities

Invested capital and claims in plastic companies of the

Siam Cement Corporate, 2016

Source: VIRAC


62


3. M&A activities


63

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


64

Source: VIRAC, BSR

Source: VIRAC, VPA


4. Inputs – 4.1 Imported sources

Production output of plastic materials and additives, 2010 - 2017

Million tons

Million tons

Production output and consumption of Binh Son

Petrochemical Refinery, 2013 - 6T / 3017

65

Source: VIRAC ,Bloomberg



EUR/ton Polymer price movements, 5/2015 – 9/2017

66

Source: VIRAC, TCHQ

Source: VIRAC, TCHQ



Million

tons

Million

USD

Plasric material import, 2010 – 2017

Plastic raw material importers by output, 2017

Source: VIRAC, TCHQ

Plastic raw material importers by value, 2017

67

Source: VIRAC, TCHQ

Source: VIRAC, TCHQ

Scrap plastic import turnover, 2012 – 2017



Million USD

Source: VIRAC, TCHQ

Top importers of plastic raw materials, 9T / 2017

Import structure of plastic materials by type, 2017

68

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


69

Source: VIRAC, GSO


5. Production

Number of business and labor, 2010 - 2016

Number of plastics enterprises by region, 2010 – 2016Content is intentionally removed for demo purpose

70

Source: VIRAC, GSO


5. Production

Million tons

Plastic production output, 2009 – 2017e

Plastics production structure, 2017


71

Type of

PolymerApplication


5. Production

Thousand tons

Plastic packaging production output,

2009 – 2017


72

Source: VIRAC, GSO


5. Production

Thousand tons

Household plastic production output, 2009 – 2017e


73

Production output of construction plastics, 2009 - 2017e

Thousand tons

Source: VIRAC, GSO


5. Production


74

Phần III. Thị trường Việt Nam

5. Sản xuất

Source VIRAC

Ton

Plastic pipe design capacity of key enterprises, 2017

75

Production of plastics and other plastics,

2009 - 2017e

Thousand tons

Source: VIRAC, GSO


5. Production


76

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


77


6. Consumption

USD billion

Sales of the plastics industry, 2013 – 2017e

Source: VIRAC

Source: VIRAC, VPAS

Content is intentionally removed for demo purpose Plastic consumption per capita, 1989 – 2016

Kg/person/year

78


6. Tiêu thụ

Source: VIRAC, VPA

Source: VIRAC, VPA

Scales of listed plastic packaging enterprises

Vietnam’s plastic packaging market scale, 2012 – 2016f

79


6. Tiêu thụ

Source: VIRAC, VPA

Outlets and agencies of plastic pipe manufacturers, 2017

Source: VIRAC, VPA

Vietnam’s plastic pipe consumption market share, 2016

80

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


81

Source: VIRAC, TCHQ

Part III. Vietnamese market

7. Import –export – 7.1 Import

Million USD

Plastic product import markets, 2017

Plastic product import, 2010 - 2017e

Source: VIRAC, TCHQ

Source: VIRAC, TCHQ

Million

USD

Plastic product import by month, 2016 - 2017

82

Source: VIRAC, TCHQ


7. Import –export – 7.2 Export

Million USD

Plastic export turnover, 2010 – 2017

Plastic exporting enterprise structure, 2013 – 2017

Source: VIRAC, TCHQ

Plastic product export by month, 2016 – 2017

Million USD

Source: VIRAC, TCHQ

83

Source: VIRAC, TCHQ

Source: VIRAC, TCHQ



Plastic product export by type, 2017

Plastic product export market, 2017

84

Source: VIRAC, TCHQ



85

CONTENT




3. M&A activities

4. Inputs

5. Production

6. Consumption

7. Export - Import


86




87

Competitive strategiess of some famous brands in the plastics industry




88




CONTENT

Part IV. Industrial risks

89

90

Environment risks:


Risks of takeover


91

Health risks


Competitive risks


92



CONTENT

Part V. Prospects and Forecasts

1. Prospects

2. Forecasts

3. Industry planning

93

94

Prospects

Part V. Prospects and forecasts

1. Prospects


95


1. Prospects


96

CONTENT


1. Prospects

2. Forecasts


97


2. Forecasts – 2.1 Global market


98

Source: VIRAC


2. Forecasts – 2.2 Vietnam’s market


99

Source: VIRAC


2. Forecasts – 2.2 Vietnam’s market

Thousand tons

Forecast for plastic production output, 2011 – 2020f


100

CONTENT


1. Prospects

2. Forecasts


101

Project Location

Capacity

(tons/year)

Total

investment

(USD million)

List of projetcs on plastic materials

Source: VIRAC, MOIT

Project Location

2016 - 2020

Number

Investment capital

(USD million)

List of projetcs on mold and equipment manufacture

Source: VIRAC, MOIT




102




CONTENT

Part VI. Enterprise Analysis

1. Enterprises Introduction

2. Financial Analysis

103

104

Tien Phong Plastic Joint-Stock Company (NTP)

Part V. Enterprise analysis

1. Enterprise introduction


105

Binh Minh Plastic Joint Stock Company (BMP)




106

An Phat Plastic and Green Environment Joint Stock Company(AAA)




107

Ngoc Nghia Industry-Service-Trading Joint Stock Company (NNG)




108

Dong Nai Plastic Joint Stock Company (DNP)




109

Dong A Plastic Group Joint Stock Company (DAG)




110

Rang Dong Plastic Joint Stock Company (RDP)




111

Saigon Plastic Packaging Joint Stock Company (SPP)




112

Tan Dai Hung Plastic Joint Stock Company (TPC)




113

CONTENT

Part VI. Enterprise Analysis

1. Enterprises Introduction

2. Financial Analysis

114

Net revenue, 2015 - 2016


2. Financial analysis- Profitability

VND billion

Source: VIRAC


115

Revenue structure of Dong Nai Plastics, 2016

Source: VIRAC, DNP




116

Source: VIRAC

Gross profit, 2015 - 2016VND billion




117

Source: VIRAC

Gross profit margin, 2015 - 2016




118




119

Solvency, 2015 - 2016

Source: VIRAC


2. Financial analysis- Solvency


120

Account receivable turnover, 2015 - 2016

Inventory rotation, 2015 - 2016


2. Financial analysis- Solvency

Source: VIRAC

Source: VIRAC


121

Total Debt/Total Assets, 2015 - 2016

Source: VIRAC


2. Financial analysis- The ability to repay


122

Total debt/equity, 2015 - 2016


2. Financial analysis- The ability to repay

Source: VIRAC


123

G&A expenses/Net Revenue, 2015 - 2016

Selling Expenses/Net Revenue, 2015 - 2016


2. Financial analysis- Performance

Source: VIRAC

Source: VIRAC


124

Fix Asset Turnover, 2015 - 2016

Total Asset Turnover, 2015 - 2016


2. Financial analysis- Performance

Source: VIRAC

Source: VIRAC


125

NTP BMP AAA NNG DNP DAG RDP SPP TPC

Average of

the industry

2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016

ROA

ROE

ROS

Profit after

tax

Net revenue

Total asset

Equity


2. Financial analysis- Rate of return


CONTENT

Part VIII. Appendix

126

127

VIII. Appendix

Financial Statement – Tien Phong Plastic Jsc.

BALANCE SHEET

Unit: VND million 2015 2016

A. CURRENT ASSETS

I. Cash and cash equivalents

II. Short-term investments

III. Short-term receivables

1. Inventories

2. Other current assets

B. NON – CURRENT ASSETS

I. Fixed assets

II. Long-term investment

TOTAL ASSETS

A. LIABILITIES

I. Current liabilities

II. Non – current liabilities

B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium

III. Undistributed earnings

TOTAL LIABILITIES AND OWNER’S EQUITY

INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses

General and administrative expenses

Net profit from operating activities

Accounting profit before tax

Net profit after corporate income tax

Profit after tax for shareholders of the parent

company

Basic earning per share (VND)

CASH FLOWS STATEMENT


I. Cash flows from operating activities

Net cash flows from operating activities

II. Cash flows from investing activities

Net cash flows from investing activities

III. Cash flows from financing activities

Net cash flows from financing activities

Net cash flows in the period

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at the end of the year


128

VIII. Appendix

Financial Statement – Binh Minh Plastic Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














129

VIII. Appendix

Financial Statement – An Phat Plastic and Green Environment JSC.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














130

VIII. Appendix

Financial Statement – Ngoc Nghia Industry-Service-Trading Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














131

VIII. Appendix

Financial Statement – Dong Nai Plastic Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














132

VIII. Appendix

Financial Statement – Dong A Plastic Group Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














133

VIII. Appendix

Financial Statement – Rang Dong Plastic Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














134

VIII. Appendix

Financial Statement – Saigon Packaging Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














135

VIII. Appendix

Financial Statement – Tan Dai Hung Plastic Jsc.

BALANCE SHEET


A. CURRENT ASSETS




1. Inventories



I. Fixed assets


TOTAL ASSETS

A. LIABILITIES



B. OWNER’S EQUITY

I. Owner’s equity

II. Share premium



INCOME STATEMENT


Net revenue

Costs of goods sold

Gross profit

Financial income

Financial expenses

Selling expenses






company














Report Disclaimer

Report Disclaimer

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produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to be

reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal and non-commercial use. You agree that you will not use

this report for any purpose that is unlawful and that you will not reproduce the report or redistribute it outside your organization, or place it on a website for public

access without the express written permission of VIRAC.

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Email: [email protected] | Tel: +84 463289520

136

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