Menu

2024 The 22nd Vietnam International Printing & Packaging Industry Exhibition

Home / Latest News / Wrapped up

Wrapped up

 

Date: 2017-08-17

News Type: Expo News

 

According to global market researchers Euromonitor International, demand for food packaging in Vietnam as at 2015 was more than 3.9 million tons and will reach some 5.4 million tons by 2020, or 38 per cent higher. 

Meanwhile, global demand will only increase 13 per cent in the 2015-2020 period. This amazing growth in Vietnam’s need for food packaging opens the door to international packaging producers to seek opportunities and expand their business in the country.

Switzerland’s Tetra Pak, the world’s leading food processing and packaging solutions company, earlier this year announced a $110-million investment in a state-of-the-art regional manufacturing facility in southern Binh Duong province. 

With ground to be broken in the fourth quarter, the project will be the first paper-board carton factory in the country.

Conquering the market 

Tetra Pak’s investment was prompted by increasing consumption volumes, with 2016’s total packaged liquid dairy and fruit-based beverages intake at 70 billion liters across the company’s global markets. 

Over the next three years these markets are likely to grow at a healthy 5.6 per cent per annum.

The greenfield factory is expected to begin commercial operations by early 2019. “Situated near Ho Chi Minh City, the country’s economic hub, it will be ideally positioned to meet the demand for packaging materials among food and beverage (F&B) manufacturers in Vietnam, other ASEAN countries, and Australia and New Zealand,” Mr. Robert Graves, Managing Director of Tetra Pak Vietnam, told VET. 

“For manufacturers based in Vietnam, the new factory will bring a host of unprecedented benefits such as consistent supply, reduced lead time, efficiency, and flexibility.”

 After more than 20 years in Vietnam, Tetra Pak has seen substantial growth in their products, driven by a wide portfolio and a number of innovations they have introduced in the market. 

Hence, “we decided to set up our first factory in Vietnam, which will be our fourth packaging material factory in the region, providing us with expansive coverage and scale and allowing us to serve our customers faster and better,” said Mr. Michael Zacka, Regional Vice President, Tetra Pak South Asia, East Asia and Oceania. 

“This decision is a strong reflection of our commitment to Vietnam and our belief in its future potential.”

The new factory reflects Tetra Pak’s confidence in the local economy and will cater to a rise in domestic consumption of healthy, ready-to-drink beverages among the country’s growing middle class, according to Mr. Graves. 

Two key attributes of this are Vietnam’s real wage growth and a growing consciousness among consumers about health issues and food safety. 

The factory’s construction is evidence of its ambitious chase for market share in the country’s increasingly competitive market. 

“Vietnam has been among our Top 10 biggest consumption markets and one of our two strategic markets in Asia-Pacific, along with Indonesia,” he said. 

“Last year, Tetra Pak provided 7.5 billion packaging units for the local market, recording double-digit growth and the highest growth in the last 25 years.” 

Apart from Tetra Pak, another leading global carton packaging and filling machine supplier for F&B, SIG Combibloc from Germany, who arrived in Vietnam’s packaging market in 2005, has become the packaging manufacturer for a number of the country’s largest dairy suppliers, including Vinamilk, TH, and Dutch Lady. According to industry insiders, however, Tetra Pak now dominates other suppliers in terms of high-end aseptic packaging for Vietnam’s F&B market.

Rising opportunities

Vietnam’s packaging industry has been recording sustainable growth of around 15-20 per cent annually, according to Mr. Nguyen Ngoc Sang, Chairman of the Vietnam Packaging Association (VINPAS). 

“It has always been a good support industry for the country’s manufacturing sector so has generally recorded stable growth,” he told VET. 

More specifically, the plastic packaging sector has also reached growth of up to 25 per cent on average over recent years, according to the Vietnam Plastics Association (VPA).

Food aseptic packaging market share, by type

 

 

Source: SIG Combibloc,2016

In fact, the dairy category in Vietnam is the country’s largest category and a core business for Tetra Pak and is projected to grow steadily, with per capita consumption potentially doubling to 28 liters by 2020 from 15 liters in 2010. 

Tetra Pak estimates the country will see average growth of 6.5 per cent per annum during the 2016-2019 period. 

“Packaging is critical to the industry, and the new factory will definitely be a boost to the development of the local F&B industry, contributing to Vietnam’s socioeconomic growth and integration into the regional supply chain,” Mr. Graves said.

According to figures from Business Monitor International (BMI) in its report on Vietnam’s F&B sector, growth in the industry is estimated at 9.43 per cent for the 2013-2017 period and will continue to rise in subsequent years. 

Dairy production has also seen significant development of more than 20 per cent on average over the last five years while consumption power has increased 16.9 per cent annually.

In a press conference at the Propak Vietnam Expo 2017 held in early March, Mr. Nguyen Bach Khoa, Country Sales Manager at Bosch Rexroth, the Drive and Control Division of Bosch Vietnam, an industrial equipment supplier in the processing and packaging industry, said the company’s growth in 2016 came in at 60 per cent compared to 2015. 

He agreed that Vietnam’s packaging market will present a host of opportunities in the years to come.

Meanwhile, another supplier, Rickermann from Germany, recorded growth of 10-15 per cent on average in recent years. 

Not only foreign enterprises are investing in modern production technology, as domestic businesses have also been conducting similar investment in order to meet domestic demand and the strict criteria of export markets around the world.

Sorce: VN Economic Times http://english.vietnamnet.vn/fms/business/182570/wrapped-up.html 

 

Related Link

 

Back

TOP