PLASTICS RESIN AND SYNTHETIC RUBBER INDUSTRY REPORT … · Input materials for the plastic resin...

PLASTICS RESIN AND SYNTHETIC RUBBER INDUSTRY REPORT Q1/2018

TABLE OF CONTENTS

2

Abbreviations3 3. Plastic resins 63

Executive Summary4 4. Synthetic Rubber 70

I. Business environment 5 5. Price-affecting factors 74

1. Macroeconomic situation 5 IV. Industry risks 76

2. Legal framework 9 1. Industry risks 76

3. Trade agreements 13 2. SWOT analysis 79

II. Global market 15 V. Industry trend, forecast and planning 81

1. Definition and classification 15 1. Industry trend 81

2. Chain value of the industry 19 2. Global market forecast 83

4. Input material 22 3. Local market forecast 87

5. Plastic resins 38 4. Industry development planning 91

6. Synthetic Rubber 51 VI. Business analysis 94

III. Local market 58 1. Business Introduction 94

1. Industry scale 58 2. Financial analysis 97

2. Input material 60 VII. Appendix 107

Abbreviations

3

Abbreviation Full Name Abbreviation Name

BR Butadien Rubber PET Polyethylene Terephthalate

CIS Commonwealth of independent states PP Polypropylene

ISRG International Rubber study group PS Polystyrene

HIPS High Impact Polystyrene PVC Poly Vinyl Chloride

HPE High Density Polyethylene SBR Styrene Butadien Rubber

LLDPE Low Density Polyethylene TPP Trans-Pacific partnership

NAFTA North America Free Trade Area VPA Vietnam plastic association

PE Polyethyelene

Executive summary

4

• Primeval plastics and synthetic rubber are important input materials

for many industries, especially plastics and automobile industry.

• The development of the polymer industry relates to the petrochemical

industry and is affected by the price fluctuation, supply and demand

for the main raw materials like crude oil, gas.

• China takes the lead in thermoplastic production, with an output of

92.1 tons in 2016.

• In 2016, global sales of polymer-based products reached 851 billion

USD, up 6.2% compared to 2015.

• Global synthetic rubber production and consumption has been on the

upward trend in recent years, much greater than those of natural

rubber.

TÓM TẮT BÁO CÁO

5

• In Vietnam, the oil refinery sector has just newly-fledged, having only

Dung Quat oil refinery in operation.

• Plastic material and additive production in 9M/2017 were estimated at

915 thousand tons, up 32.8% over the same period in 2016 (689

thousand tons).

• In the first 9 months of 2017, the domestic consumption of plastic

materials reached 4,575 thousand tons, up 19.3% over the same period

in 2016.

• The demand for plastic resins has increased, resulting in a sharp

increase in plastic resin import volume between 2012 and 2016 with a

CAGR of 19%.

• Opec Plastics is a leading company among top importers of plastic raw

materials in 9M/ 2017.

• In recent years, Vietnam’s plastic industry has been highly appreciated

in terms of growth speed compared to ASEAN countries

TABLE OF CONTENTS

Part I. Business environment

1. Macroeconomic situation

2. Legal framework

3. Trade agreements

6



Source: VIRAC, GDVC

Source: VIRAC, GSO

GDP growth rate by quarter, 2015 – 2017

Imports of plastic raw materials and percentage contribution to total turnover,

2010 – 2017

7

Content is intentionally removed for demo purpose



Source: VIRAC, SBV

Source: VIRAC, SBV

USD/VND exchange rate, 2013 – 12/2017

CNY/VND exchange rate, 1/2016 – 12/2017

8




FDI attraction by sector, 2017

Vietnamese plastic enterprise’s SCG ownership, 2016

9


TABLE OF CONTENTS



2. Legal framework

3. Trade agreements

10

11

• The Prime Minister signed Decision No.45/2017/QD-TTg amending and supplementing Decision No. 36/2016/QD-TTg regulating the application of

ordinary tax tariff on imported goods.


2. Legal framework


2. Legal framework

12



2. Legal framework

13


TABLE OF CONTENTS



2. Legal framework

3. Trade agreements

14

15

• The plastic industry is opened to positive signals thanks to priorities brought about by free trade agreements.

• Joining free trade agreements has helped Vietnam to attract immensly FDI.


3. Trade agreements

TABLE OF CONTENTS

Part II. Global market

1. Definition and classification

2. Chain value of the industry

3. Input materials

16


1. Definition and classification – 1.1. Plastic resins

Classification by polymer effect with temperature

17


Thermoplastic production share, 2015

Thermoset plastic production share, 2015

Source: VIRAC, ICIS

Source: VIRAC, ICIS


1. Definition and classification – 1.1. Plastic resins

Polymer usage structure, 2015

Source: VIRAC, ICIS

18


Source: VIRAC, Rubbernews

Synthetic rubber production structure, 2015


1. Definition and classification – 1.2. Synthetic rubber

19


• Synthetic rubber is a compound made from chemical reactions which is mainly

comprised of oil and gas.

• Synthetic rubber is classified via multiple ways.

TABLE OF CONTENTS




3. Input materials

20



21




22


• Oil refinery plants:

• The oil refinery technology with various raw material combination alters chemical features to generate desirable products.

TABLE OF CONTENTS




3. Input materials

23


3. Input materials – 3.1. Overview

24




Source: VIRAC, IHS

Monomer input materials structure, 2016

25


Input materials for the plastic resin and synthetic rubber industry (generally known as polymer) are oil and gas products.



Source: VIRAC, ICIS

Source: VIRAC, ICIS

Products gained from Naphtha distillation, 2015

Products gained from Ethane distillation, 2015

26



3. Input materials – 3.2. Ethylene

Global ethylene supply and demand, 2010 -2016

Ethylene’s application, 2016

Source: VIRAC, IHS

Source: VIRAC, ICIS

27




Source: VIRAC, Stratas Advisor

Ethylene production capacity and demand by region, 2015

Ethylene dichloride consumption by region, 2016

Source: VIRAC, IHS

28


Ethylene production structure, 2016

Source: VIRAC, Statista

Million tons

Source: VIRAC, Platts



Global ethylene prices, 11/2016 – 12/2017

29




Source: VIRAC, Uncomtrade

Source: VIRAC, UncomtradeSource: VIRAC, Uncomtrade

Global ethylene trade, 2011 - 2016

Global ethylene export structure, 2016 Ethylene import structure, 2016

30



3. Input materials – 3.3. Propylene

Source: VIRAC, ICIS

Source: VIRAC, ICIS

Global propylene export structure, 2010 – 2016

Propylene export structure by region, 2016

31



3. Input materials – 3.3. Propylene

Source: VIRAC, ICIS

Global Propylene export, 2011 – 2016e

Source:VIRAC, Platts

32


Global Propylene price, 11/2016 – 11/2017

Source: VIRAC, ICIS

Global butadiene capability and production, 2011 -2015

Butadiene production structure by country, 2015

Source: VIRAC, ICIS


3. Input materials – 3.4. Butadiene

33




Source: VIRAC, IHS

Source: VIRAC, American Chemical Society

Butadiene consumption structure by type 2017

SBR consumption by region, 2016

34




Fluctuations of butadiene prices, 1/2011 – 1/2017

Source: VIRAC, Bloomerg

35




Butadiene production capacity of some companies in the world

36



3. Input materials – 3.5. Benzene

Global benzene supply and demand, 2012 – 2017F

Source: VIRAC, IHS

37



3. Input materials – 3.5. Benzene


Structure of benzene use in the world, 2015

Fluctuations of Benzene prices, 11/2016 – 11/2017


38


TABLE OF CONTENTS

Part III. Vietnam's market

1. Industry scale

2. Input materials

3. Plastic resins

4. Synthetic rubber

5. Price-affected factors

39

Source: VIRAC


1. Plastic resins – 1.1. Production

40

No Product

Capacity

(ton/year) Producer

1 PVC

2 PVC

3 PP

4 PE

5 BOPP

6 BOPP

7 PS

8 PET

9 EPS

10 EPS

Total

Plastic resin and additives production capacity, 2015


TABLE OF CONTENTS


1. Industry scale

2. Input materials

3. Plastic resins

4. Synthetic rubber


41


2. Input materials

42


43


2. Input materials

Monomer imports, 2012 - 6T/2017e

Source: VIRAC, GDVC

Thousand USD

Aromatic compound imports, 2013 - 6T/2017e

Source: VIRAC, GDVC

Thousand USD

TABLE OF CONTENTS


1. Industry scale

2. Input materials

3. Plastic resins

4. Synthetic rubber


44

Source: VIRAC, MIT, GSO



3. Plastic resins – 3.1 Production

Polymer Production, 2010 – 2017

45

Polypropylene supply and demand in Vietnam, 2010 – 2017


Source: VIRAC, TCTK


3. Plastic resins – 3.1 Production

46


LLDPE, LDPE, HDPE, PP distribution figures in the northern market,

2014-2015

Source: VIRAC, HCD White paper

PP production and consumption of Binh Son Oil Refinery, 2013 -

6T/2017

Source: VIRAC, HCD White paper

Plastic materials by region, 2017




3. Plastic resins – 3.2. Consumption

47

Polymer consumption in Vietnam, 2010 – 2017

Polymer consumption structure by sector in Vietnam, 2017


Source: VIRAC, GDVC

Source: VIRAC, GDVC


3. Plastic resins – 3.3 Import - Export

Plastic resins imports, 2010 – 2017

Plastic material importing market by output, 2017

48


Plastic material importing market by value, 2017

Source: VIRAC, GDVC

Source: VIRAC, GDVC



Source: VIRAC, GDVC

Polymer import structure by volume, 6T/2017e Proportion of top largest plastic material importers, 9T/2017

49


Plastic material import structure by type, 2017

Source: VIRAC, GDVC



50


Source: VIRAC, GDVC

Polymer

type

2012 2013 2014 2015 2016 2017

PE

PP

PVC

PET

EVA

PS

Imports of some polymer types, 2012 – 9T/2017e

Source: VIRAC, GDVC



Source: VIRAC, GDVC

PP importing markets, 6T/2017e

51


Source: VIRAC, GDVC

PE import structure by type, 6T/2017ePE importing markets, 6T/2017e



Source: VIRAC, GDVC

52


Source: VIRAC, GDVC

Top largest PE importing enterprises, 6T/2017e

Top largest PP importing enterprises, 6T/2017e

Source: VIRAC, GDVC



Source: VIRAC, GDVC

53


Source: VIRAC, GDVC

Polymer importing market structure by volume, 2017Polymer importing value, 2012-2017

Polymer importing market structure by value, 2017

Source: VIRAC, GDVC



Source: VIRAC, GDVC

PE & PP export values, 2017

54


Source: VIRAC, GDVC

Top 10 largest plastic material exporters, 9T/2017Plastic export structure by type, 2017

Source: VIRAC, GDVC



Source: VIRAC, GDVC

55


Source: VIRAC, GDVC

Top 10 largest PE exporters, 6T/2017e

PE exporting market structure, 6T/2017e PP exporting market structure, 6T/2017e

Top 10 largest PP exporters, 6T/2017e

Source: VIRAC, GDVC


3. Plastic resins – 3.4. Production technology

56


TABLE OF CONTENTS


1. Industry scale

2. Input materials

3. Plastic resins

4. Synthetic rubber


57

Source: VIRAC, UN Comtrade, GDVC


4. Synthetic rubber – 4.1 Import - Export

Synthetic rubber import and export, 2011 – 2017e

58




Source: VIRAC, GDVC

Export market structure of synthetic rubber, 2017e

Import market structure of synthetic rubber, 2017e

Source: VIRAC, GDVC

59




Source: VIRAC, GDVC

Top 10 largest synthetic rubber exporters, 9T/2017e

Top 10 largest synthetic rubber importers, 9T/2017e

Source: VIRAC, GDVC

60


TABLE OF CONTENTS


1. Industry scale

2. Input materials

3. Plastic resins

4. Synthetic rubber


61

World crude oil average price, 2014 -2017

Monomer price volatility, 2/2016 - 1/2017



Source: VIRAC, Bloomberg

Source: VIRAC, Bloomberg

62


TABLE OF CONTENTS

Part IV. Industry risks

1. Industry risks

2. SWOT analysis

63


1. Industry risks

64



1. Industry risks

65


TABLE OF CONTENTS


1. Industry risks

2. SWOT analysis

66


2. SWOT analysis

67

Strength Weaknesses

Opportunities Threats


TABLE OF CONTENTS

Part V. Industry trend, forecast and planning

1. Industry trend

2. Global market forecast

3. Vietnam's market forecast

4. Industry development planning

68

Source: VIRAC, European Bioplastic


1. Industry trend

Bioplastic production capacity in the world,

2012 - 2018F

69


TABLE OF CONTENTS


1. Industry trend




70

Source: VIRAC, IHS



Global PP & PE demand growth, 2014 – 2019f

71




72


Source: VIRAC, Polymerupdate



73

Time Company Capacity Location

Synthetic rubber production projects in Asia, 2012 - 2016


TABLE OF CONTENTS


1. Industry trend




74

Source: VIRAC



75

Project Location Capital Capacity (million tons/year)

Some petrochemical refining projects in Vietnam, 2010 - 2020


Source: VIRAC, GDVC

Source: VIRAC, VPA



Plastics consumption per capita, 1989 – 2020F

Plastic export turnover, 2010 – 2017e

76


Source: VIRAC, MOIT

2013 2014F 2015F 2016F 2017F 2018F CAGR

Demand forecast for tires in Vietnam, 2013 – 2018F



77


Source: VIRAC,

PP and PVC production capacity forecast, 2016 – 2021f



78


Thousand tons/year

TABLE OF CONTENTS


1. Industry trend




79



80




Source: VIRAC, MOIT

81

No. Project name Location

Investment information

Capacity (1.000

tons/year)

Investment capital

(million USD)Time

Oil refinery projects, 2011 - 2020


TABLE OF CONTENTS

Part VI. Business analysis

1. Business introduction

2. Financial analysis

82

Company Logo

Total asset

(VND

billion)

Revenue

(VND billion)General information


6.1 Business introduction

83



6.1 Business introduction

Company Logo

Total asset

(VND

billion)

Revenue

(VND billion)General information

84


TABLE OF CONTENTS


1. Business introduction

2. Financial analysis

85

Net revenue, 2015 - 2016


6.2 Financial analysis – Business performance

86


Gross profit, 2015 - 2016



87


Self-financing rate, 2015 - 2016



88


Financial expenses, 2015 - 2016



89


Total assets ratio, 2015 - 2016


6.2 Financial analysis – Financial indicators

90


Fixed assets ratio, 2015 - 2016



91


Total debt / equity, 2015 - 2016



92


Profit ratio, 2015 - 2016



93


Payment indicators of enterprises, 2015 - 2016


6.2 Financial analysis – Payment indicators

94


Recommendation

Recommended usage

This report is made by Vietnam Industry Research and Consultancy (VIRAC), providing only the industry overview and business analyses. All information,

statements and projections are based on reliable sources with ultimate prudence as of the time of writing. However, due to subjective and objective reasons in

terms of published data sources, VIRAC does not guarantee or bear any responsibility for information accuracy and no liability for damages on using this report

partly or wholly. All viewpoints and statements in this report are subject to changes without notice. This publication is protected by copyright owned by Vietnam

Industry Research and Consultancy (VIRAC). Copying, modifying and printing without permission are strictly prohibited.

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