Essay About Total Revenue Of The Plastic Firms And Industry Analysis Industry Classificationplastic Industry

Fin 211 – Plastic Industry Analysis
Trần Thị Kim Anh1332300067Bus 328Case study 8: Industry Analysis Industry ClassificationPlastic Industry is evaluated as a potential sectors in Vietnam when its growth rate has been increse 16% – 18% since 2010 in campared with telecomcomunication and textile industry. The total revenue of the plastic firms in the quarter I/ 2016 reach at 3.427 billion.  (Hoa Nguyen, 2016)Plastic resins are produced by oil petroleum and natural gas hence it can be said that the plastic industry is depended and affected directly by the oil sector. (BSC, 2015)According to Vietnam Plastic Industry Report, the plastic products are also affected by all sectors such as consumer goods, construction and telecommunication, because its products are used widely in these sectors (VCBS, 2016). External Factor Technology is one of the challenge with Vietnamese plastic firms because most machines that have to import from foreign countries such as Taiwan, China, Korea and Japan (KIS Vietnam Securities Corporation, n.d). Government will create advantages such as tax and capital incentives for the plastic industry (VCBS, 2016). Moreover, because Vietnam firm must import raw material from other countries and the import tariff policy affect to plastic firms.Social Changes: There are 46% of consumers who choose domestic plastic products instead of foreign products because the quality, model and fashion are improved (Tú Uyên, 2015)Demography: According to VPA, the amount of plastic consumption increase from 22kg/person in 2008 to 35kg/person in 2013, and in 2020 the consumption for this sector is predicted to 45kg/person (Bảo Linh, 2015).Foreign Influence: Vietnam is a potential market for the foreigner investments and Vietnamese plastic firm have to face with big firms from Thailand and Taiwan. Besides that, there are a lot of small firms have to sell themselves for the international investors (Thanh Lâm, 2016). Demand Analysis    In 2015, Vietnam earned $ 2,4 billion and $2,54 billion in 2016 (Thông Tấn Xã Việt Nam, 2017) from plastic industry with the two largest markets are Japan and The US with total revenue was $ 401.49 million. In addition, plastic industry’s export turnover reached to $1.052 trillion (VPAS, 2016). In 2017, Japan is also the most potential market with plastic demand is $ 8 billion/ years so it can be said that the demand of plastic in the developed countries such as Japan, The US, and EU countries is high so these are potential markets for Vietnamese firms. Besides that, in 2010, Plastic enterprise produced 3.800 tons that could meet 50% market demand (Viettrade, 2010). Supply AnalysisRaw material is a challenge with Vietnamese plastic industry when the firms still imported 388.415 tons of September 2016 from China, Taiwan, China and Japan. Furthermore, at the beginning of 2017, the tax tariff will be increase 3% for the PP resins so it can be affected to the exported and domestic price and quantity of this industry (VPAS, 2016). Profitable analysisProduct segmentation includes four types of segment that are packaging segment makes up 37.4% in total, consumer segment takes 29.3%, construction segment holds 18.3% and technical segment is the lowest with 15.1%. Industry concentration: the main plastic products that are exported are packaging, household products, construction and engineering plastic (Vietnam Trade Promotion Agency, 2016)Supply input price: The exchange rate is an important factor because inflation rate in Vietnam is 4.52% (Tradeing Economics, 2017) so the Vietnamese firms must import the material at higher price compared with foreigner companies. In addition, the input also affected by the oil price. Ease of industry entry: Japan is one of the main market of the Vietnamese plastic products while in the US and EU take plastic bag that is subject to anti-dumping tax (VCBS, 2016). Works CitedBảo Linh. (2015). Vietnam trade and industry review. Retrieved from