MUST KNOW: 3 factors affecting masterbatch manufacturing in Vietnam market

Masterbatch manufacturing industry in Vietnam currently has its first step into the global market. However, Vietnamese masterbatch manufacturing companies are still underrated in comparison to foreign businesses although we have a huge advantage in the input material resources. Knowing the situation of this industry may allow domestic businesses to alter and improve their production static as well as the whole development orientation, this article aims to clarify 3 main factors affecting the batch colors field.  

How was the masterbatch manufacturing affected by other economic factors?

One of the most outstanding features of the masterbatch manufacturing industry in Vietnam is that we have to import 85-90% of the base-resin materials for production process to create batch colors and other types of filler and additives masterbatch. Meanwhile, the price of importing plastic materials always fluctuates according to the fluctuation of world crude oil prices. This caused the great pressure on the production activities of Vietnamese masterbatch manufacturing enterprises, reducing the competitiveness of Vietnamese-made products on both domestic and global market because raw material prices often account for 75-80% of the total production costs. Thus, being unable to take initiative in input materials is a major limitation for Vietnam Plastics industry.

masterbatch manufacturing in vn

Lending interest rates in will be a big challenge for many masterbatch manufacturing businesses

Another economic factor affecting the masterbatch manufacturing industry is the lending interest rate. In order to carry out production, in addition to own capital and mobilized capital through forms of securities issuance, Vietnamese plastic and masterbatch enterprises must use the bank’s credit capital. However, borrowing money from banks is not easy for businesses, especially small businesses. Meanwhile, up to 95% of Vietnamese plastic enterprises are small and medium enterprises and private enterprises. Therefore, raising capital to expand production or import materials to implement orders with these masterbatch manufacturing enterprises is not an easy task.

On the other hand, when the economy has high inflation, the government is forced to implement tight monetary policy by raising lending interest rates, businesses are even more difficult to access the bank’s capital. Therefore, the interest rate factor also has a significant impact on the operation of enterprises in general and the plastics industry in particular.

Which social aspect will determine the development of Vietnamese masterbatch manufacturing?

Plastics and batch colors are increasingly demonstrating their important in daily life as well as in key sectors in Vietnamese economy. Plastic products are increasingly used in daily consumption as well as materials for other industries. The more the daily life standards of human have been elevated and the higher the income, the higher the consumers’ demands required for the quality and design of plastic products, including high-end products. Unlike textile industry, Vietnamese masterbacth manufacturing enterprises prefer distributing their products in domestic market rather than exporting to foreign markets. The reason is that the selling price of masterbatch and plastic products is often higher in domestic marketing in comparison with global market, so selling domestic products can earn more profits than exports. This is an advantage for Vietnamese enterprises to occupy and expand market share in the domestic market.

masterbatch manufacturing in vn

>>Read more: Summarize masterbatch production in Vietnam and in global market

To be successful, masterbatch manufacturing companies must update the plastic-using trend of the world

Using environmentally friendly plastic products is a new trend in the world that is supported and responded by many people and governments. The masterbatch manufacturing enterprises in Vietnam, of course, could not stay out of the trend. They immediately update this trend and apply it into their production activities. Therefore, the current export plastic products of Vietnam such as supermarket bags and garbage bags have been meeting the increasingly tightened environmental protection requirements.

On the other hand, plastic and batch colors products produced in Vietnam are also highly appreciated by the importing countries for their quality as well as for the advantages in tariffs policy when Vietnam has been joining most of the large-scale FTAs ​​in the world. Therefore, the export potential of Vietnamese plastics industry is also very favorable, increasing the ability to expand the market in the world.

Great influences for masterbatch manufacturing in industry brought by technologies

The technology factor has a tremendous impact on the development of the masterbatch manufacturing industry. Science and technology development has helped filler masterbatch, batch colors and plastic generally become the alternative materials for traditional products such as wood, metal, etc. Besides, it’s hard to deny the contribution of modern technology in creating plastic products with eye-catching designs and high quality meeting the aesthetic requirements as well as the safety in use for consumers. Vietnamese masterbatch manufacturing enterprises in recent years have paid attention to investment in technology innovation. Therefore, Vietnamese plastic products are considered to be competitive when exported to other markets because the technology has met the requirements of the world.

masterbatch manufacturing in vn

Lacking of high-tech equipment is considered as an urgent problem for Vietnamese materbatch manufacturing

However, the innovation of technology and equipment for the plastic industry is still a major obstacle since most of the equipment being responsible for masterbatch manufacturing activities of this industry and other related industries (such as printers, drawers, mold blowing machine, extruders, etc.) must be imported from foreign countries. Experts made comments that if Vietnam’s mechanical industry can promote its supportive role, then plastics industry will be able to access modern technology with reasonable costs, thereby increasing its operational efficiency and revenue.

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