The EU-Vietnam free trade agreement (EVFTA) which has been effective since August 1, is expected to boost the Southeast Asian country’s polymer imports. The trade deal, which will gradually remove almost 99% of customs duties for goods traded between the two parties, is expected to boost Vietnam’s total exports to the EU by 42.7% in 2025. EU’s exports to Vietnam are also projected to grow significantly.
Vietnam is a key polymer importer and has become Chinese converters’ top choice to set up their production sites as an effort to avoid restrictive tariffs on US-origin polyethylene (PE). Data from Vietnam’s plastic industry group indicates that the country imported about 5.59 million tons of PE, polyethylene terephthalate (PET), polypropylene (PP), and polyvinyl chloride (PVC) in 2018.
As of now, the country has no PE production capacity, while local producers can only account for roughly 30% of its PP requirements. Domestic PP production facilities include Nghi Son Refinery and Petrochemicals’ 4000,000 tons/year plant and Binh Son Refining and Petrochemicals’ 150,000 tons/year plant.
South Korea’s Hyosung is the latest producer that started up its PP production in Vietnam. It currently produces up to 300,000 tons/year of PP in its complex in Ba Ria-Vung Tau province. Long Son Petrochemicals, which is mostly owned by Thailand’s SCG, plans to start commercial operation of a 450,000 tons/year PP unit and a 1 million tons/year PE plant in Vietnam in 2023-2024.
