Hanoi (VNS/VNA) - While many plastic enterprises reported positive results in bothrevenue and profits in the fourth quarter of last year, there are stillenterprises reporting a decline in profits, even suffering losses.

HCD InvestmentProduction and Trading Joint Stock Company announced that their Q4 profitnearly doubled last year’s figure to reach 15.5 billion VND (682,500 USD).

HCD attributedthe profit growth to the sharp increase in oil prices and plastic resinsprices, while the company stored a large amount of imported inventory at a timeof low prices.

For the wholeyear of 2021, HCD's revenue reached 732 billion VND and profit after tax ofmore than 48 billion VND, up 47 percent and 3.3 percent respectively comparedto 2020.

Tien PhongPlastic Joint Stock Company expects revenue and profit in 2021 to reach 4.8trillion VND and 460 billion VND, respectively. The leader of this businessattributed the growth to co-operation with Sekisui Group, giving the companythe opportunity to supply Japanese ODA projects in Southeast Asia in the fieldof infrastructure.

However, asurvey by VnBusiness showed that not all plastic enterprises had reportedpositive business results in the fourth quarter of 2021.

Da NangPlastics Joint Stock Company (DPC) reported a loss for the first time in Q4 asits revenue reached only 9 billion VND, down 26 percent on the same period lastyear, while management costs increased sharply due to the relocation of theentire company into an industrial park.

This causedDPC to suffer an after-tax loss of more than 1.2 billion VND in the fourthquarter, while in the same period last year, it achieved a profit of 4 billionVND.

In 2021, DPCachieved a revenue of more than 48 billion VND, profit after tax of nearly 5billion VND, down 27 percent and 41 percent respectively over the same periodin 2020.

According toplastic enterprises, the sharp increase in plastic resin prices, customersupport costs, warehousing costs, and logistics costs compared to the previousyear caused the companies’ profits to decrease deeply.

"Theprice of plastic raw materials has never been as high as in the first half ofthis year, which caused a huge impact for most of us plastic businesses,” saidNguyen Hoang Ngan, General Director of Binh Minh Plastics Joint Stock Company(BMP).

Mirae AssetSecurities (MASVN) said that the plastic industry was maintaining an overallrevenue growth rate of 16-18 percent in the period of 2016-2020. Therefore, theplastic industry will continue to maintain a high growth rate of around 15 percentper year in the coming years.

In the recentreport of Bao Viet Securities Company (BVSC), the price of PVC resin hit arecord high of 1,600 USD per tonne in mid-April. After that, although it cooleddown to 1,360 USD per tonne, PVC resin price still increased by 9 percent comparedto the beginning of 2021 and increased by 54 percent compared to theaverage price of 2020.

Plenty ofroom for growth

According toexperts, the outlook for the plastic industry this year is favourable thanks toVietnam’s recent signing of a series of new-generation FTAs, such as CPTPP,EVFTA and RCEP.

Tran Viet Anh,General Director of Nam Thai Son Import-Export Joint Stock Company, said inearly 2022 the company had continuous export orders, most notably an order ofabout 4,000 tonnes to the European market with a value of more than 8 million USD.

Son said themanufacturing industry of the US was being affected by the increasing number ofCOVID-19 cases. Meanwhile, China, a major supplier of plastic products to theUS market, also reduced output, so orders poured into Vietnam.

Vietnam'splastic industry has a lot of potential, though foreign investment in thisindustry in recent years has not been significant and the room for foreigninvestors was still very large, he said.

LEGO Group(Denmark) and Vietnam-Singapore Industrial Park Joint Venture Company Limited(VSIP) have just signed a memorandum of understanding to build a new factorywith a total investment of 1 billion USD. It is expected to be constructed inthe second half of 2022 and start operating in 2024. According to calculations,the factory will create about 4,000 job opportunities within the next 15 years,as well as indirectly support local businesses.

Many domesticplastic enterprises have also started to invest heavily in technology toproduce high-quality plastic products for domestic use and export, such asThaco - TPC Plastic Components Production Co. Ltd., a member unit of Thaco AutoGroup. The company has been equipped with a system of modern equipment lines,contributing to increasing the localisation rate for domestically manufacturedand assembled vehicles and at the same time promoting exports to countries likeRussia and Malaysia.

Tran Viet Anhalso pointed out many limitations of domestic plastic enterprises in terms of capitaland raw materials.

“Localcompanies face the most difficulties in sourcing raw materials, because foreignenterprises and FDI enterprises already have a stable supply source, whiledomestic plastic enterprises have to import 80 percent of its raw materials,which affects the prices of raw materials,” he said.

“There shouldbe tax and capital incentives to support plastic businesses to develop in thenear future,” he said./.