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Opportunities and Challenges for plastics injection moulding industry when approaching EU market

EVFTA has brought Vietnam plastics injection moulding industry closer to EU market

EU is considered a big market for plastics sector of Vietnam with the impressive growth rate of export being 61.5% in 2017. In 2020, EVFTA (signed in June 2019) takes effect, in combination with the wave of moving production factories after Covid 19, which have created opportunities for Vietnam enterprises to approach closer to EU market than any other time.

Come with opportunities are the challenges that make Vietnam plastics sector to change and improve to develop stronger, to be successful in EU market that is very difficult.

EU market create opportunities and present challenges to Vietnam Plastics injection moulding industry

EU is a big market where any other countries share the same expectation to approach and have cooperation.

Advantages, opportunities

The turning point that creates opportunity for Vietnam economy in general and plastics injection moulding industry in particular to develop rapidly and strongly is EVFTA.

In EU market, Vietnam plastics products are not imposed Anti-Dumping Duty. Many enterprises making packaging products exporting to EU market enjoy double benefits of selling price and preferential tax rate.

Moreever, import-export tax rates applied to goods traded between the two parties Vietnam-EU have been improved significantly (There are goods with 0% or less than 10% tax rate). It is an opportunity for Vietnam to import modern production machines/equipment at a tax rates that have never been applied before. This is what spur Vietnam plastics injection moulding enterprises to quickly change to new technologies, producing goods of high value following international standards.

EU market create opportunities and present challenges to Vietnam Plastics injection moulding industry

Besides, Covid 19 pandemic crisis has caused severe difficulties to global economy, creating the movement of the production and supply chain. Vietnam is a nation that draw attentions from big foreign investors and corporations. The very nations from EU, Japan etc…have gradually change orders from China to Vietnam to take advantages of low-paid labours, low production costs, preferential export tax rate.

In sum, opportunities for plastics injection moulding industry are:

  • Diversified markets
  • Approach and transform to modern production methods.
  • Expand the production and investment scale

Challenges for Vietnam plastics sector

One of the first challenges to Vietnam plastics industry from EU market is “EC has made suggestions to prohibit single use plastics products such as straws, bottles, bags etc…”. That means to keep and increase the export rate of plastics products to EU market, enterprises need to change to new technologies, applying them to make eco friendly products.

International standards will be applied to plastics products, meaning that Vietnam plastics products for export need to comply with the strict criteria. Plastics products of international standards is a good factor, requiring enterprises to improve capabilities. However, Vietnam plastics firms are quite slow in transforming to new technologies. Hence there are many difficulties in making plastics products of high quality.

Despite of those difficulties, some plastics firms in Vietnam have been transformed, conquering challenges to advance their capabilities, spuring Vietnam supporting industry sector to develop.

Smart Vietnam –  leading renovation and integration trend 

Smart Vietnam –  leading renovation and integration trend 

Smart Vietnam is plastics injection moulding company who has realized early the importance of technologies renovation, change production mindset and create a strong foundation for the development of other industries, spuring supporting industry sector to develop.

The plastics injection moulding technologies that Smart Vietnam use are a system of machines JSW imported from Japan with the size of clamping pressure being from 60 metric tonnes to 450 tonnes. System of supporting machines and equipment for horizontal injection moulding machines are automated.

Smart Vietnam is specialized in making high technical plastics products, able to be recycled, with minimum waste. The plastics waste will be processed in accordance with established guidance not to cause damages to environment.

In addition to that, plastics injection moulding products made by Smart Vietnam have high precision and quality to be exported to foreign countries.
 

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