vietnam chemical industry report...

VIETNAM CHEMICAL INDUSTRY REPORT Q2/2018

TABLE OF CONTENTS

Content Page Content Page

Abbreviations 4 3.2. Definition and classification 25

Summary 5 3.4. Production and consumption 28

1. Business environment 7 3.5. Import Export 31

1.1. Macroeconomic Indicator 8 4. Major sector groups 33

1.2. Legal framework 12 4.1. Fertilizers and nitrogen compounds 33

2. World market 16 4.2. Synthetic rubber and raw plastic resins 45

2.1. Production 17 4.3. Detergents 59

2.2. Consumption 20 4.4. Paint and printing ink 66

3. Vietnam market 23 4.5. Plant protection products 73

3.1. Formation and development history 24 4.6. Basic chemicals 82

2

TABLE OF CONTENTS

Content Page Content Page

4.7. Synthetic fiber 89

5. Outlooks and forecasts 96

6.1. Development planning of the chemical industry 97

5.2. Outlooks of world chemical industry 103

5.3. Outlooks of Vietnam chemical industry 108

6. Business Analysis 111

6.1. Enterprise introduction 112

7.2. Financial analysis 122

3

Content

ABBREVIATIONS

ACFTA ASEAN – China Free Trade Agreement FP Fire protection

ADB Asian Development Bank PVN Vietnam Oil and Gas Group

AFTA ASEAN Free Trade Area STK Century Synthetic Fiber Corporation

AKFTA ASEAN – Korea Free Trade Agreement GDVC General Department of Vietnam Customs

PPPs Plant Protection Products GSO General Statistics Office of Vietnam

CPI Consumer Price Index FA Fixed Assets

CP NVL Raw Materials Expenses HCM Ho Chi Minh City

JSC Joint Stock Company TA Total Assets

FDI Foreign Direct Investment VFC Vietnam Fumigation Joint Stock Company

GDP Gross Domestic Product Vinachem Vietnam National Chemical Corporation

IIP Index of Industrial Production VPIA Vietnam Paint & Printing Ink Association

LAS Linear Alkylbenzen Sulfonate WTO World Trade Organization

LAS Supephotphat and Lam Thao chemicals

4

Summary

• Chemical industry has 8 sub-product categories including:

• Fertilizers and nitrogen compounds:

• Synthetic rubber and raw plastic resins:

• Detergents:

5

• Paint and printing ink

• Plant protection products:

• Basic chemicals:Content is intentionally removed for demo purpose

Summary

• Synthetic fiber:

• Technical machinery system of the chemical industry is largely

medium-sized compared to that of some countries in the region

• Almost all enterprises in the industry are small and medium-sized

and are facing up to fierce competition with multinational

corporations

• Vietnam chemical industry is still in strong development

6

Content is intentionally removed for demo purpose

TABLE OF CONTENTS

1. Business environment

1.1 Macroeconomic situation

1.2 Legal framework

7

9

Sources: VIRAC, GSOSources: VIRAC, GSO

Nội dung được xóa nhằm mục đích demo



GDP growth rate by quarter, 2015-Q1/2018GDP by current price and GDP per capita, 2013-2017

Source: VIRAC, GSO



9


• Consumer price index (CPI) in the first quarter of 2018 had a lot of changes.

Monthly CPI fluctuations 2014 – 3/2018



Source: VIRAC,GDVC

million USD

billion USD

Source: VIRAC,GDVC

10


Import and export of commodity, 2006 – Q1/2018

Vietnam's export of crude oil and coal, 2011 –

Q1/2018e

Vietnam’s export and import value in Q1/2018 was 108.43 billion USD

Source: VIRAC, SBV Source: VIRAC, SBV



11


• The VND / USD exchange rate was quite stable and still supported by a plentiful supply of foreign currencies

VND/USD exchange rate, 2013-3/2018 VND/CNY exchange rate, 2/2016 – 3/2018

TABLE OF CONTENTS



1.2 Legal framework

12


1.2 Legal framework – 1.2.1 General rules

Groups of policy on the chemical industry

13



1.2 Legal framework – 1.2.1 General rules

Impact evaluation of laws, circulars and decrees on the business activities in the sector.

14



1.2 Legal framework – 1.2.2 Impact of Free Trade Agreements

Impact evaluation of Trade Agreements on the Chemical industry

Vietnam's average tariffs under major trade agreements

Tariffs of Vietnam and Korea after AKFTA application

15


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2. World market

2.1 Production

2.2 Consumption

16

Source: VIRAC, BASF

2. World market

2.1 Production

billion

USD

Source: VIRAC, BASF

21


World production value of chemicals, 2010 - 2016e Structure of chemical production by region, 2015e

Source: VIRAC, Statista

2. World market

2.1 Production

In 2016, production volume of chemicals in all regions was estimated to

increase,


22

Production structure of chemical products worldwide, 2015

Chemical production growth by region, 2014 – 2020e



2. World market

2.1 Production

23

Forecast for annual production growth in chemical industry by field, 2016 - 2021e


TABLE OF CONTENTS

24

2. World market

2.1 Production

2.2 Consumption

00)

00)

00)

25%

17%

13%

13%

Source: VIRAC, Statista Source: VIRAC, Statista

• In 2015, the whole world witnessed a decline in the global chemical industry;

2. World market

2.2 Consumption

billion USD

25

Global Chemical Industry's Revenue, 2007 - 2016eSales growth in chemical industry by region,

2015 – 2018F




2. World market

2.2 Consumption

billion Euro

billion

Euro

26

Top 10 most chemicals consuming countries, 2016

Revenue from chemical consumption by region, 2016


3. Vietnam market

3.1 Formation and development history

3.2 Definition and classification

3.3 Production and consumption

3.4 Import Export

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42

Definition

Formation and development history of Vietnam chemical industry

3. Vietnam market


43


3. Vietnam market




3.4 Import Export

TABLE OF CONTENTS

44

Source: VIRAC, GSO

Product group Input materials Main product Customer

3. Vietnam market


45


Sources: VIRAC, GSO

• In 2016, fertilizer and Nitrogen Compounds represent the largest

share of the chemical industry,

46

Fields 2011 2012 2013 2014 2015 2016

Revenue in the fields of chemical industry in Vietnam, 2011 – 2016e

Sources: VIRAC, GSO

Unit: trillion VND

Industry structure by revenue, 2016

3. Vietnam market



3. Vietnam market




3.4 Import Export

TABLE OF CONTENTS

51

Source: VIRAC,GSO

Source: VIRAC, GSO

Enterprise Person

3. Vietnam market


billion VND billion VND

Source: VIRAC,GSO

52

Number of enterprises and labor in chemical industry,2011 - 2016

Revenue and profit of chemical industry, 2010 - 2016 Total investment capital and fixed assets of chemical industry, 2011 - 2016


Source: VIRAC, GSO

Source: VIRAC, GSO

3. Vietnam market


trillion VND

trillion VND

53

Production value of chemical industry, 2007 – 2018e

Content is intentionally removed for demo purposeConsumption value of chemical industry, 2011 – Q1/2018e

3. Vietnam market




3.4 Import Export

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54

Source: VIRAC, GDVC

3. Vietnam market

3.4 Import Export

Source: VIRAC, GDVC

Source: VIRAC, GDVC

million USD

55

Content is intentionally removed for demo purposeExport market structure of chemicals and chemical

products, Q1/2018e

Import market structure of chemicals and chemical

products, Q1/2018e

Imports and exports of chemicals and chemical products,

Q1/2018e

4. Major sector groups

4.1 Fertilizers and nitrogen compounds

4.2 Synthetic rubber and raw plastic resins

4.3 Detergents

4.4 Paint and printing ink

4.5 Plant protection products

4.6 Basic chemicals

4.7 Synthetic fiber

TABLE OF CONTENTS

56


4.1 Fertilizers and nitrogen compounds – 4.1.1 Definition and classification

58

Structure of major fertilizers 2014

Source: VIRAC, GSO


Production process of nitrogenous fertilizer

NPK production

process

Production process of fused phosphate fertilizer

Source: VIRAC


4.1 Fertilizers and nitrogen compounds – 4.1.2 Basic production process

58


Source: VIRAC, GSO


4.1 Fertilizers and nitrogen compounds – 4.1.3 Production

62

Million tons

Source: VIRAC, GSOSource: VIRAC, GSO, MARD, GDVC


Production and consumption of domestic producers, Q1/2018eRevenue of the fertilizer industry, 2010-2016

Domestic fertilizer production, 2010-Q1/2018e

Source: VIRAC

Group No EnterpriseDesign capacity(Thousand tons/year)

Production capacity của Key players in the industry, 3/2018



62


Domestic fertilizer supply was mainly from large companies from Vinachem and PVN, which is particularly:

63




2,0

0,9

Million tons

64

Sources: VIRAC, GSO, MARD


4.1 Fertilizers and nitrogen compounds – 4.1.4 Consumption


Fertilizer consumption tends to decrease over the years, which is due toFertilizer demand and consumption , 2012 – 3M/2018e

Sources: VIRAC, GDVC, MARD

Thousand tons

68

Fertilizer imports have fluctuated continuously over the years as the impact

of the domestic demand - supply and import and export tax policies as well

as major import markets.

Sources: VIRAC, MARD, GDVC


4.1 Fertilizers and nitrogen compounds – 4.1.5 Import Export


Fertilizer import, 2012 – 2013M/2018ee

Structure of fertilizer import by type, 3M/2018e

Source: VIRAC, MARD, GDVC

Fertilizer imports from China have fallen sharply in the fertilizer import structure



69


Fertilizer import structure by country, 3M/2017 – 3M/2018


Million tons



70


Exports have decreased continuously over the years since 2012, due to the competition with Chinese fertilizer in Korea and Cambodia. However, in 2017,

the output of fertilizer export has grown strongly with the export volume grew strongly in ASEAN countries such as Cambodia, Malaysia ...

Fertilizer exports, 2012 – 3M/2018e Fertilizer exports by country, 3M/2018e


VND

73

Ure

Source: VIRAC, Trade Promotion Website - MOIT


4.1 Fertilizers and nitrogen compounds – 4.1.6 Price movement


Ure and DAP fluctuate the first 3 months of 2018

Price movement, 2014 – 3/2018

44

Price forecasts


4.1 Fertilizers and nitrogen compounds – 4.1.6 Price movement


TABLE OF CONTENTS




4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

76

17%

Source: VIRAC, ICIS


4.2 Synthetic rubber and raw plastic resins – 4.2.1 Definition and classification

77

Polymer structure used, 2015


Source: VIRAC, Rubbernews


4.2 Synthetic rubber and raw plastic resins – 4.2.1 Definition and classification

78

Structure of synthetic rubber production in the world, 2015



4.2 Synthetic rubber and raw plastic resins – 4.2.2 Basic production process


Sources: VIRAC Sources: VIRAC, GSO

83


4.2 Synthetic rubber and raw plastic resins – 4.2.3 Production


Production of raw plastic resins in some provinces, Q1/2018

Polypropylene supply and demand in Vietnam, 2010-

Q1/2018e

Production of raw plastic resins in the country, Q1/2018e

No Company name Sales (tons/year) Market share

85

PP production output and consumption of Binh Son Refining and Petrochemical,

2013 – 6M/2017

Sources: VIRAC, HCD Prospectus


4.2 Synthetic rubber and raw plastic resins – 4.2.4 Consumption

LLDPE, LDPE, HDPE, PP distribution from enterprises in 2014-2015 in the

Northern market


85

Market share of plastic additives, 2017


4.2 Synthetic rubber and raw plastic resins – 4.2.4 Consumption

Source: VIRAC, GSO, MOIT

Source: VIRAC, GSO, MOIT


Polymer consumption in Vietnam, 2010 – Q1/2018e


4.2 Synthetic rubber and raw plastic resins – 4.2.5 Import Export

85

Source: VIRAC, GDVC


Source: VIRAC, GDVC

Import of plastic raw materials in Vietnam, 2010 – Q1/2018

Import market of plastic raw materials by volume, Q1/2018

53

Sources: VIRAC, GSO




Sources: VIRAC, GSO

Proportion of top importers of plastic raw materials, 9M/2017

Import structure of plastic raw materials by type, Q1/2018



85

Source: VIRAC, GDVC, UN Comtrade


Import - export of synthetic rubber, 2011 – Q1/2018e

Import market structure of synthetic rubber, 2017e



85

Source: VIRAC, GDVC

Source: VIRAC, GDVC

Export market structure of synthetic rubber, 2017e


56

Source: VIRAC, Plastics New Europe

USD/ton


4.2 Synthetic rubber and raw plastic resins – 4.2.6 Price movement


Polymer price fluctuations, 5/2015 – 4/2018

57

Source: VIRAC, IRSG

USD/ton



Fluctuations of natural rubber and synthetic rubber prices, Q1/2012 – Q4/2017




93


TABLE OF CONTENTS




4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

94

• Detergents

Source: VIRAC, GSO


4.3 Detergents – 4.3.1 Definition and classification

95

Number of enterprises and labor in the industry, 2011 - 2016


Source: VIRAC


4.3 Detergents – 4.3.2 Production process

96


Source: VIRAC, MOIT, GSO


4.3 Detergents – 4.3.3 Production

Source: VIRAC, GSO

Thousand

tons

99


Product group Enterprise 2012 2013 2014 2015 2016 2017 Q1/2018e

Production volume of detergents, 2012 – Q1/2018e

Production volume of detergents, 2010 – Q1/2018e

Source: VIRAC

No EnterpriseProduction capacity

(tons/year)Brand

• Washing powder is the main product accounting for more

than 90% of annual detergent production.


4.3 Detergents – 4.3.3 Production

100


Source: VIRAC, GSO


4.3 Detergents – 4.3.4 Consumption

billion VND

101


Consumption value of detergents, 2010 – Q1/2018e

Source: VIRAC, GDVC


4.3 Detergents – 4.3.5 Import Export

Source: VIRAC, GDVC

106

million USD


Import value of detergents, Q1/2018e

Import market structure of detergents, Q1/2018e

MỤC LỤC




4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

108

Definition and classification

Classification


4.4 Paint and printing ink – 4.4.1 Definition and classification

109



4.4 Paint and printing ink – 4.4.2 Production process

110

Production process of paint and printing ink

Source: VIRAC


Source: VIRAC, GSO

Company name Production capacity Brand

Source: VIRAC

Vietnam paint industry has experienced an average growth rate of 20%

in recent years.


4.4 Paint and printing ink – 4.4.3 Production

112

Number of enterprises and labor in the paint and printing ink

industry, 2011 - 2016


Source: VIRAC, GSO


4.4 Paint and printing ink – 4.4.3 Production

Thousand tons

Ton

Source: VIRAC, GSO

113


Production volume of paint, 2013 – Q1/2018e

Production volume of printing ink, 2010 – Q1/2018e

Source: VIRAC, VPIA


4.4 Paint and printing ink – 4.4.4 Consumption

billion

VND

Source: VIRAC, GSO

116


Paint consumption structure by field, 2015

Consumption value of paint and printing ink, 2010 – Q1/2018e

• Domestic paint production capacity has met most of the demand, but the

amount of ink shortage is quite large,

Source: VIRAC, UN comtrade


4.4 Paint and printing ink – 4.4.5 Import Export

Source: VIRAC, UN Comtrade, ITC

Million USD

118

Source: VIRAC, UN comtrade

Export market structure of paints and printing ink, 2017e

Import and export of paints and printing ink of

Vietnam, 2011 – 2017e

Import market structure of paints and printing ink, 2017e


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4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

119

Plant protection products (PPPs)

Classification:

Effect of PPPs


4.5 Plant protection products – 4.5.1 Definition and classification

120


Source: VIRAC


4.5 Plant protection products – 4.5.2 Production process

Source: VIRAC

121



4.5 Plant protection products – 4.5.3 Production

Source: VIRAC, GSO

Thousand

tons

Source: VIRAC, GSO

123

Number of enterprises and labor in the

industry,2011 - 2016


Production volume of pesticides, 2013 – Q1/2018e

Source: VIRAC, GSO

Source: VIRAC, Agromonitor


4.5 Plant protection products – 4.5.3 Production

124

Structure of pesticide consumption, 2016e


Structure of pesticide production, Q1/2018e

Source: VIRAC


4.5 Plant protection products – 4.5.4 Consumption

Source: VIRAC, GSO

125

billion VNDMarket share of pesticides in Vietnam, 2016e


Consumption value of pesticides, 2012 – Q1/2018e

Source: VIRAC


4.5 Plant protection products – 4.5.4 Consumption

Source: VIRAC

126

Consumption of pesticides by plant group, 2016


Consumption structure of pesticides by product group, Q1/2018e


4.5 Plant protection products – 4.5.5 Import Export

Source: VIRAC, ITC

129

million USD

Source: VIRAC, GDVC, ITC

Import and export of pesticides and raw materials,

2011 - 2017e

Export structure of export of pesticides by volume, 2016



4.5 Plant protection products – 4.5.5 Import Export

Source: VIRAC, GDVC

130


Source: VIRAC, GDVC

Import market of pesticides and raw materials,

Q1/2018e

Export value of pesticides in Vietnam to some countries,

2011 - 2016

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4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

132

133

Basic chemicals are divided into two main branches which are inorganic and organic.


4.6 Basic chemicals – 4.6.1 Definition and classification


Source: VIRAC


4.6 Basic chemicals – 4.6.2 Production process

Production process of caustic soda - chlorine

134


Product Manufacturer

Production

capacity

(tons/year)

Market

share

Source: VIRAC, GSO


4.6 Basic chemicals – 4.6.3 Production

138

Number of enterprises and labor in the industry, 2011 - 2016


Production capacity of basic chemicals of some enterprises, 2017

Source: VIRAC collects

Source: VIRAC, GSO


4.6 Basic chemicals – 4.6.3 Production

Thousand

tons

139


Production of basic chemicals, 2013 – Q1/2018e

billion VND


4.6 Basic chemicals – 4.6.4 Consumption

Source: VIRAC, GSO

140


Comsumption value of basic chemicals, 2011 – Q1/2018e

Impact of chlorine products

Impact of soda products

million USD


4.6 Basic chemicals – 4.6.5 Import Export

Source: VIRAC, GDVC

142

Source: VIRAC, GDVC

Source: VIRAC, GDVC


Imports and exports of basic chemicalsImport-export turnover of basic chemicals, 2011 –

Q1/2018e

Import market structure of basic chemicals, Q1/2018eExport market structure of basic chemicals, Q1/2018e

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4.3 Detergents



4.6 Basic chemicals

4.7 Synthetic fiber

143

• Synthetic fiber


4.7 Synthetic fiber – 4.7.1 Definition and classification

144


Source: VIRAC, STK

Filament fiber production


4.7 Synthetic fiber – 4.7.2 Production process

145



4.7 Synthetic fiber – 4.7.3 Production

Company name Capacity(tons/year) Product Product segment

Ton

Source: VIRAC, GSO Source: VIRAC, STK

Source: VIRAC, STK

148

Production capacity of some companies in the Vietnam textile industry


Market share by actual production capacity, 2014Production output of Synthetic fiber, 2011 – Q1/2018e

Source: VIRAC, GSO


4.7 Synthetic fiber – 4.7.4 Consumption

Tonbillion VND

149


Volume and consumption value of Synthetic fiber,

2011 – Q1/2018e


4.7 Synthetic fiber – 4.7.5 Import Export

Source: VIRAC, STK

Source: VIRAC, GDVC

million

USD

150


Market share by export value, 2015eImport-export turnover of Synthetic fiber, 2009 – 2017e

Source: VIRAC, UN Comtrade Source: VIRAC, UN Comtrade


4.7 Synthetic fiber – 4.7.5 Import Export

151


Export market structure of Synthetic fiber, 2017eImport market structure of Synthetic fiber, 2017e

5. Outlooks and forecasts

5.1. Development planning for the chemical industry

5.2. Outlooks of world chemical industry

5.3. Outlooks of Vietnam chemical industry

TABLE OF CONTENTS

158

97

According to Decision No. 1621 / QD-TTg of the Prime Minister promulgated on September 18, 2013 approving the development plan of chemical industry

of Vietnam to 2020, by 2030.




98




99




MOIT issued Decision No. 8989 / QD-BCT dated 25/08/2015 approving the restructuring plan of Vietnam chemical industry, 10 areas of restructuring in the

chemical industry include fertilizer, petrochemicals, plant protection chemicals, basic chemicals, chemical electricity, industrial gas, rubber, detergents, paint

- printing ink.



162


No Project Location

Investment information

Capacity

(Thousand

tons/year)

Investment

capital(million

USD)

Investment

time

Source: VIRAC



163


No Project Location

Investment information

Capacity(Thousand tons/year)

Investment

capital(mill

ion USD)

Investmen

t time

Source: VIRAC



164


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169





European chemical industry: Low oil prices help reduce difficulties

Asian chemical industry: Supply exceeds demand and grows slowly



170


Middle East Chemical Industry: Increase in competition pressure

Latin American chemical industry: Recovering from economic growth

171




Increasing competition requires dynamic response

Cooperative relations with customers

Frequently meet the ever-changing legal regulations

172




Data processing is continuously updated in real time

Prepare for changes in distribution channels

173




TABLE OF CONTENTS

174







175


• For fertilizer group:

• For petrochemical group (synthetic rubber and raw plastic resins)

• For detergent group:

• For paint and printing ink group

• Pesticides:

• Basic chemicals:

• Synthetic fiber:

176



6. Business Analysis

6.1. Enterprise introduction

6.2. Financial analysis

TABLE OF CONTENTS

177

Company name Address

Net revenue

2017 (billion

VND)

Total assets

(billion VND)

Charter

capital

(billion

VND)

CountryCustomer

segmentationBusiness area



178




PetroVietnam Camau Fertilizer Joint Stock Company

179


PetroVietnam Fertilizer and Chemicals Corporation



180




Lam Thao Fertilizers & Chemicals Joint Stock Company

181


Binh Dien Fertilizer Joint Stock Company



182




Southern Basic Chemicals JSC

183


LIX Detergent Joint Stock Company



184




Duc Giang Detergent and Detergent Joint Stock Company

185




Saigon Plant Protection Joint Stock Company

186


Dry Cell And Storage Battery Joint Stock Company



187




6.2. Financial analysis

TABLE OF CONTENTS

188

-


6.2 Financial analysis

189

Source: VIRACContent is intentionally removed for demo purpose

billion VND Net revenue, 2016 - 2017

-



billion VND

189

Source: VIRAC

Gross profit margin, 2016 - 2017


Cost of sales



billion VND

190

Source: VIRAC


Cost of sales, 2016 - 2017

Enterprise cost management



billion VND

191

Source: VIRAC


Enterprise cost management, 2016 - 2017



billion VND

193

Source: VIRAC

Source: VIRAC


Solvency, 2016 - 2017

Profit Ratio, 206 - 2017



194

Source: VIRAC

Payment ratio, 2016 - 2017




195

Source: VIRAC

Content is intentionally removed for demo purposeInventory turnover, 2016 - 2017

REPORT DISCLAIMER

207

Report disclaimer

This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. VIRAC has

produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to

be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal and non-commercial use. You agree that you will not

use this report for any purpose that is unlawful and that you will not reproduce the report or redistribute it outside your organization, or place it on a website for

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