PLASTICS INDUSTRY REPORT Q2/2018

PLASTICS INDUSTRY REPORT Q2/2018 1

TABLE OF CONTENTS Part Page Part Page Abbreviation 3 1. Industry development history 25 Executive summary 4 2. M&A activities in the industry 27 I. Business environment 6 3. Production 30 1. Macroeconomic situation 6 4. Consumption 38 2. Legal framework 11 5. Import export 42 II. World market 15 IV. Industry outlook and planning 47 1. Definition and classification 15 1. Outlook 47 2. Production value chain 17 2. Industry development planning 50 3. Production 19 V. Enterprise analysis 53 4. Consumption 22 1. Enterprise introduction 53 III. Vietnam market 25 2. Financial analysis 63 2

TABLE OF ABBREVIATIONS TABLE OF ABBREVIATIONS 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 VTIC Vietnam Industry and Trade Information Centre SBV State Bank of Vietnam 3

EXECUTIVE SUMMARY The plastics industry is one of the industries growing stably in the world over the past 50 years. Vietnam s plastics industry has a large number of enterprises with nearly 4,000 ones and 200,000 of labor. Currently, packaging plastics is the biggest segment with 26% of the total output. Plastic production output in 2016 was estimated at nearly 6.63 million tonnes. 4

Executive summary 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. 5

TABLE OF CONTENTS Part I. Business environment 1. Macroeconomic situation 2. Legal framework 6

Part I. Business environment 1. Macroeconomic situation GDP growth rate by quarter, 2015 - Q1/2018 USD/ person Source: VIRAC, GSO USD billion Plastic material imports and contribution to total turnover, 2010 Q1/2018 Source: VIRAC, GDVC 7

Part I. Business environment 1. Macroeconomic situation VND/USD exchange rate, 2013 3/2018 Source: VIRAC, SBV VND/CNY exchange rate, 1/2016-3/2018 Source: VIRAC, SBV 8

Part I. Business environment 1. Macroeconomic situation Average price of crude oil and natural gas in the world, 2014 3/2018 USD/barrel USD/MMBTU Source: VIRAC, Indexmundi VND/kWH Average electricity price, 2007 2017 Source: VIRAC, EVN 9

Part I. Business environment 1. Macroeconomic situation Monthly CPI fluctuation, 2014 3/2018 Source: VIRAC, GSO % Average interest rate, 2012 Q1/2018e Source: VIRAC, GSO 10

TABLE OF CONTENTS Part I. Business environment 1. Macroeconomic situation 2. Legal framework 11

Part I. Business environment 2. Legal framework 12

Part I. Business environment 2. Legal framework 13

Part I. Business environment 2. Legal framework 14

TABLE OF CONTENTS Part II. World market 1. Definition and classification 2. Production value chain 3. Production 4. Consumption 15

Part II. World market 1. Definition and classification Definition Classification 16

TABLE OF CONTENTS Part II. World market 1. Definition and classification 2. Production value chain 3. Production 4. Consumption 17

Part II. World market 2. Production value chain Source: VIRAC 18

TABLE OF CONTENTS Part II. World market 1. Definition and classification 2. Production value chain 3. Production 4. Consumption 19

Part II. World market 3. Production Million tons World plastic production, 2011-2016 Source: VIRAC, Plastic Europe Plastic production in some countries, 2015 Million tons Source: VIRAC, Plastic Europe 20

Part II. World market 3. Production Plastic production in some regions, 2015 Source: VIRAC, PAGEV 21

TABLE OF CONTENTS Part II. World market 1. Definition and classification 2. Production value chain 3. Production 4. Consumption 22

23 Part II. World market 4. Consumption Million tons World plastic consumption, 2011-2015e Source: VIRAC, PLASTICS Plastic consumption per capita by region/country, 2015 Kg/person Plastic consumption by region, 2015 Source: VIRAC, PLASTICS Source: VIRAC, PLASTICS

24 Part II. World market 4. Consumption CAGR in plastic consumption in some regions, 2015 2019f Global plastic consumption by application, 2016 Source: VIRAC, Statista Source: VIRAC, Plastic Europe

TABLE OF CONTENTS Part III. Vietnam market 1. Industry development history 2. M&A activities in the industry 3. Production 4. Consumption 5. Import export 25

Part III. Vietnam market 1. Industry development history 26

TABLE OF CONTENTS Part III. Vietnam market 1. Industry development history 2. M&A activities in the industry 3. Production 4. Consumption 5. Import export 27

Part III. Vietnam market 2. M&A activities in the industry SCG's ownership in Vietnam plastic enterprises, 2018 Source: VIRAC 28

Part III. Vietnam market 2. M&A activities in the industry 29

TABLE OF CONTENTS Part III. Vietnam market 1. Industry development history 2. M&A activities in the industry 3. Production 4. Consumption 5. Import export 30

Part III. Vietnam market 3. Production Number of enterprises and labor in the industry, 2010-2016 Number of plastic enterprises by region, 2010-2016 Source: VIRAC, GSO Source: VIRAC, GSO 31

Part III. Vietnam market 3. Production Million tons Plastic production, 2009 2018e Source: VIRAC, GSO Plastic production structure, Q1/2018 Source: VIRAC, VPA 32

Part III. Vietnam market 3. Production Production of plastic packaging, 2009 Q1/2018 Thousand tons Application by type of polymer Source: VIRAC, GSO Polymer type Application Source: VIRAC 33

Part III. Vietnam market 3. Production Thousand tons Production output of household plastics, 2009 Q1/2018e Source: VIRAC, GSO 34

Part III. Vietnam market 3. Production Production output of construction plastics, 2009 Q1/2018e Thousand tons Source: VIRAC, GSO 35

Part III. Vietnam market 3. Production Design capacity of plastic pipes of some large enterprises in the industry, 2017 Ton Source: VIRAC tổng hợp 36

Part III. Vietnam market 3. Production Production of technical plastics and other plastics, 2009 Q1/2018e Thousand tons Some large enterprises producing engineering plastics Company Revenue 2016 (VND billion) Main products Partner VND billion Industrial production value of plastic and rubber components, 2011-2016 Source: VIRAC, GSO Source: VIRAC, SIDEC Source: VIRAC, SIDEC 37

TABLE OF CONTENTS Part III. Vietnam market 1. Industry development history 2. M&A activities in the industry 3. Production 4. Consumption 5. Import export 38

Part III. Vietnam market 4. Consumption Plastic consumption, 2013 Q1/2018e USD billion Kg/person/year Source: VIRAC, VPA Consumption of plastic per capita in Vietnam, 1989-2016 Source: VIRAC, VPA 39

Part III. Vietnam market 4. Consumption Scale of plastic packaging market in Vietnam, 2012 2016f Scale of plastic packaging business listed Source: VIRAC, VPA Source: VIRAC, VPA 40

Part III. Vietnam market 4. Consumption Number of shops and dealers of plastic pipe manufacturers, 2017 Source: VIRAC, VPA Plastic pipe consumption market share in Vietnam, 2016 Source: VIRAC, VPA 41

TABLE OF CONTENTS Part III. Vietnam market 1. Industry development history 2. M&A activities in the industry 3. Production 4. Consumption 5. Import export 42

Part III. Vietnam market 5. Import export 5.1 Import Imported plastic products, 2010 Q1/2018 USD million Source: VIRAC, GDVC Import market structure of plastic products, 3M/2018 Import of plastic products by month, 2017-2018 USD million Source: VIRAC, GDVC Source: VIRAC, GDVC 43

Part III. Vietnam market 5. Import export 5.2 Export Export turnover of plastic products, 2010 Q1/2018 USD million Source: VIRAC, GDVC Plastic products export by month, 2017 2018 Structure of exporting enterprises of plastic products, 2013 Q1/2018 USD million Source: VIRAC, GDVC Source: VIRAC, GDVC 44

Part III. Vietnam market 5. Import export 5.2 Export Export market structure of plastic products, Q1/2018 Source: VIRAC, GDVC Structure of export plastic products, Q1/2018 Source: VIRAC, GDVC 45

Part III. Vietnam market 5. Import export 5.2 Export Top exporters of plastics and plastic products Q1/2018 Top importers of plastics and plastic products, Q1/2018 Source: VIRAC, GDVC 46

TABLE OF CONTENTS Part IV. Industry outlook and planning 1. Outlook 2. Industry development planning 47

Part IV. Industry outlook and planning 1. Outlook 48

Part IV. Industry outlook and planning 1. Outlook 49

TABLE OF CONTENTS Part IV. Industry outlook and planning 1. Outlook 2. Industry development planning 50

Part IV. Industry outlook and planning 2. Industry development planning List of projects on mold and equipment manufacture Project Location 2016-2020 Investment capital Number (USD million) Project List of projects on plastic materials Location Capacity (tons/year) Total investment (USD million) Source: VIRAC, MOIT Source: VIRAC, MOIT 51

Part IV. Industry outlook and planning 2. Industry development planning 52

TABLE OF CONTENTS Part V. Enterprise analysis 1. Enterprise introduction 2. Financial analysis 53

Part V. Enterprise analysis 1. Enterprise introduction Tien Phong Plastic Joint-Stock Company (NTP) 54

Part V. Enterprise analysis 1. Enterprise introduction Binh Minh Plastic Joint Stock Company (BMP) 55

Part V. Enterprise analysis 1. Enterprise introduction An Phat Plastic and Green Environment Joint Stock Company(AAA) 56

Part V. Enterprise analysis 1. Enterprise introduction Ngoc Nghia Industry-Service-Trading Joint Stock Company (NNG) 57

Part V. Enterprise analysis 1. Enterprise introduction Dong Nai Plastic Joint Stock Company (DNP) 58

Part V. Enterprise analysis 1. Enterprise introduction Dong A Plastic Group Joint Stock Company (DAG) 59

Part V. Enterprise analysis 1. Enterprise introduction Rang Dong Plastic Joint Stock Company (RDP) 60

Part V. Enterprise analysis 1. Enterprise introduction Saigon Plastic Packaging Joint Stock Company (SPP) 61

Part V. Enterprise analysis 1. Enterprise introduction Tan Dai Hung Plastic Joint Stock Company (TPC) 62

TABLE OF CONTENTS Part V. Enterprise analysis 1. Enterprise introduction 2. Financial analysis 63

Part V. Enterprise analysis 2. Financial analysis Profitability VND billion Net revenue, 2016-2017 Source: VIRAC 64

Part V. Enterprise analysis 2. Financial analysis Profitability 65

Part V. Enterprise analysis 2. Financial analysis Profitability VND billion Gross profit, 2016-2017 Source: VIRAC 66

Part V. Enterprise analysis 2. Financial analysis Profitability Gross profit margin, 2016-2017 Source: VIRAC 67

Part V. Enterprise analysis 2. Financial analysis Profitability 68

Part V. Enterprise analysis 2. Financial analysis Solvency Solvency, 2016-2017 Source: VIRAC 69

Part V. Enterprise analysis 2. Financial analysis Solvency Days of sales outstanding, 2016-2017 Days' sales in inventory, 2016-2017 Source: VIRAC Source: VIRAC 70

Part V. Enterprise analysis 2. Financial analysis The ability to pay Self-financing rate, 2016-2017 Source: VIRAC 71

Part V. Enterprise analysis 2. Financial analysis Performance efficiency Selling expenses/net revenue ratio, 2016-2017 Source: VIRAC 72

Part V. Enterprise analysis 2. Financial analysis Performance efficiency Administrative expenses/net revenue ratio, 2016 2017 Source: VIRAC 73

Part V. Enterprise analysis 2. Financial analysis Performance efficiency Total asset turnover, 2016-2017 Source: VIRAC Fixed asset turnover, 2016-2017 Source: VIRAC 74

Part V. Enterprise analysis 2. Financial analysis Rate of return % Profit ratio, 2016-2017 75

Part V. Enterprise analysis 2. Financial analysis Rate of return 76

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