In January, VietnamCredit officially released Vietnam's Chemicals and Chemical Products Industry Report, which gives general information about Vietnam's macroeconomic situation, and an insight into the chemicals and chemical products industry, while highlighting different advantages and challenges that the industry is experiencing.
On top of that, the report also provides a list of the top 10 largest companies in the industry. These companies were selected by VietnamCredit based on their revenues, profits, credit ratings, and other non-financial factors.
The Chemicals and Chemical Products Industry in Vietnam consists of nine main sub-sectors including Manufacture of basic chemicals; Manufacture of fertilizers and nitrogen compounds; Manufacture of plastics and synthetic rubber in primary forms; Manufacture of pesticides and other agrochemical products; Manufacture of paints, varnishes, and similar coatings, printing ink and mastics; Manufacture of cosmetics, soap and detergents, cleaning and polishing preparations and toilet preparations; Manufacture of other chemical products n.e.c; Manufacture of man-made fibers; Wholesale of pesticides, fertilizers, agricultural chemicals and Wholesale of other chemicals.
According to the data provided by VietnamCredit, there are 9,438 enterprises registered to operate in the chemicals and chemical products industry in Vietnam - of which the number of wholesale companies accounts for the largest proportion with 60.5%.
The wholesale sector also employs the most employees with 85,822 persons, followed by the paints, varnishes and similar coatings, printing ink and mastics manufacturing sector (29,790 employees), fertilizers and nitrogen compounds manufacturing sector (27,990 employees), and other chemical products n.e.c manufacturing sector (19,414 employees).
The production of chemicals and chemical products in Vietnam generally fluctuates over the years. The index of production of chemicals slightly decreased from 113.5% in 2018 to 111.6% in 2019.
Meanwhile, the index of consumption of chemicals and chemical products in Vietnam tended to increase since 2017 due to the demand for expanding the industrialization and modernization of the economy.
Vietnam has a trade deficit of chemicals and chemical products. According to the General Department of Customs, in 2010, the chemicals import turnover was 6.53 times higher than the export turnover. In 2019, this figure decreased to 3.29 times.
In general, the export and import turnover of chemicals and chemical products has increased over the years, except for 2012. The export and import turnover in 2012 decreased by approximately 14.1% and 2.2% compared to the previous year.
The export turnover sharply increased from USD 1.7 billion in 2016 to USD 2.9 billion in 2018 and reached USD 3.2 billion in 2019.
The import turnover of chemicals has also experienced the same trend as for export. especially, it considerably increased from USD 7.00 billion in 2016 to USD 10.2 billion in 2018 and reached USD 10.5 billion in 2019.
In 2019, In 2019, the export turnover of chemicals and chemicals products accounted for 23.3% of the total turnover. Meanwhile, in 2015, the export turnover only accounted for 20.4%.
The chemicals and chemical products industry plays a key role in the development of any economy. The demand for chemicals is large because this sector provides raw materials for production and consumption, such as fertilizers, detergents, etc. Furthermore, the investment capital will be mobilized both inside and outside the country to create the most optimal conditions for chemical enterprises.
However, this industry is facing considerable challenges. Most of the domestic technical and machinery system is at an average level, not as modern as some other advanced countries in the region, leading to low productivity. The investment cost of chemical production technology is often huge and the technology transfer takes much time. The technical level and skills of the domestic workforce are not high. The domestic raw materials are scarce and depend on imported materials from abroad. Especially, the pressure from coping with foreign competitors such as China is very high.
For more information on the chemicals and chemical products industry and top 10 companies, please visit Vietnam’s Chemicals and Chemical Products Industry Report.
Written by VietnamCredit
