Seeking opportunities in challenges

Forecasts indicate that the construction plastics industry will face many challenges in 2024. Photo: Tuan Son

Positive signal

Tien Phong Youth Plastic Joint Stock Company witnessed an impressive comeback with its Q2/2024 financial report showing net revenue increasing by 37% to VND 1,680 billion. Gross profit reached VND 553 billion, a 63% increase compared to the same period last year, thereby improving the gross profit margin from 28% to 33%.

In addition, selling expenses increased by 56% to VND 205 billion, financial expenses increased by 39% to VND 43 billion, while administrative expenses decreased slightly compared to the same period. As a result, the company reported a net profit after tax of VND 238 billion, an increase of 86% compared to Q2/2023.

For the first six months of the year, the company recorded revenue of VND 2,629 billion, a 4% increase compared to the same period last year. The company achieved a pre-tax profit of VND 415 billion and an after- tax profit of VND 347 billion. Furthermore, after two quarters, the company has already reached 75% of its profit target.

Meanwhile, another major player in the plastics industry, Binh Minh Plastic Joint Stock Company, achieved net revenue of VND 1,153 billion in the second quarter of 2024, a 14% decrease compared to the same period last year. The cost of goods sold decreased by 15%, resulting in a gross profit of nearly VND 506 billion; the profit margin reached 43.84%.

After deducting operating expenses, Binh Minh Plastic recorded a net profit of over 280 billion VND, a decrease of 5% compared to the same period last year.

For the first six months of the year, the company generated 2,156 billion VND in revenue and 470 billion VND in after-tax profit, representing decreases of 22% and 18% respectively compared to the same period last year. This represents a 39% achievement of the annual revenue target and a 46% achievement of the annual profit target.

Efforts to seek out and apply advanced technology.

Assessing the market outlook for the second half of this year, many experts believe that the Vietnamese plastics industry will face many challenges, but also many opportunities for development. Business activities of enterprises in the industry will be more positive as the real estate and construction markets improve.

According to statistics, Vietnam generates approximately 1.8 million tons of plastic waste annually, but only 27% of this is recycled. However, plastics is also a vital manufacturing and supporting industry with enormous potential, as plastic products are used in every aspect of life. Applying the circular economy to the plastics sector will bring many benefits, including reducing pollution, decreasing greenhouse gas emissions, and creating green livelihoods.

The Vietnamese plastics industry is often described as a processing industry because it relies heavily on imports, approximately 70-80%. For many years, machinery and equipment have also been almost 100% imported. The production capacity of businesses in the industry has been improving significantly since the end of 2019 and is expected to meet 30-40% of domestic demand in the near future.

Currently, the traditional export markets for Vietnamese plastics businesses are Europe, the US, Japan, and ASEAN. With an increasing number of markets requiring CBAM (Border Area Carbon Adjustment Mechanism) and sustainability reports, the Vietnamese plastics industry needs to activate and exploit the potential of carbon credits. By participating in the carbon credit market, the Vietnamese plastics industry can both minimize environmental impact and enhance competitiveness, while promoting a circular economy.

Win Sim Tan, Head of VERRA's East and Southeast Asia Regional Office, shared: “Plastic waste has become a significant concern for companies, governments, and consumers worldwide . VERRA's plastic waste reduction program can assess the impact of waste collection and recycling projects. Eligible projects are awarded plastic credits. This is also an effective and powerful means of reducing plastic waste in the environment.”

Industry experts recognize that the business community plays a crucial role in environmental protection in general. Their responsibility extends beyond simply complying with the law; it also requires innovation and technological advancements to optimize production materials and reduce waste.

Between 2023 and 2028, the recycled plastics industry is projected to grow at a compound annual growth rate (CAGR) of 8.36%. Furthermore, the Vietnamese plastics industry is expected to reach a production volume of 409.9 thousand tons by 2028.

Vietnamese plastics manufacturers are striving to find and apply advanced technologies and new materials to protect the environment. The strategies being implemented will align with the goals of developing a circular economy, moving towards sustainable and environmentally friendly production.

Source: https://kinhtedothi.vn/doanh-nghiep-nganh-nhua-tim-kiem-co-hoi-trong-thach-thuc.html