Vietnam packaging industry a ‘delicious pie’ for foreign investors

Foreign investors from around the world are keen on getting a slice of the “delicious pie” that is Vietnam's packaging industry, an expert says.

David Bian, general manager of China-based HJTExpo, also said that Vietnam’s rapidly growing manufacturing industry would be an investment magnet.

He was speaking on the sidelines Interfoam Vietnam, a three-day (August 23-25) specialized exhibition on foam organized for the first time in Ho Chi Minh City by HJTExpo.

Product positioning

Tran Huu Nhu Anh, packaging design expert and director of Anh Sang Packaging Corporation, said studies show that consumers spend less than a minute to look at a product before deciding to buy; and 73% of purchase decisions are made at the point of sale.

“This is why packaging is considered to be one of the most important factors influencing consumer decision making. Even with items for men who pay little attention to packaging, the packaging factor accounts for 7% of the purchase decisions," he said.

Packing not only helps protect product quality, it also contributes to building brand recognition for products, especially when Vietnamese enterprises have to promote exports in increasingly competitive markets, he added.

Speaking at the opening ceremony of Interfoam Vietnam, Sang said that Vietnam has more than 900 packaging factories at present, about 70% of them are located in the southern region.

He said the packaging industry has contributed significantly to Vietnam's economy with a relatively high and stable growth rate. The plastic packaging industry, in particular, has been growing more than 25% each year in recent years.

The packaging industry is also expected to benefit greatly from the development of e-commerce and the free trade agreements (FTAs) that Vietnam has joined, Sang said.

Vietnam has signed 16 FTAs and is currently negotiating three new agreements, he noted, adding that the country has exported products to nearly 200 countries and territories.

Vietnam’s e-commerce market, despite being in its early stages, has maintained an annual growth rate of over 25%, with a current size of $25 billion. This represents great opportunities for the country's packaging industry to develop strongly in the future, Sang said.

However, Nguyen Duc Trung, deputy director of the Enterprise Development Agency under the Ministry of Planning and Investment, held that besides opportunities, the packaging industry also faced many difficulties, including the use of satellite companies by major investor groups to provide support industry products for the country’s production chain.

Several economists have also noted that foreign packaging enterprises have more advantages than domestic ones in terms of capital, technology, management capacity and even relationships with major partners. If they do not actively improve capacity and make good use of opportunities, domestic packaging enterprises will be at risk of losing at home, they’ve cautioned.

Attracting investment

Packaging plays a great marketing role for products, increasing their value in the process. Therefore, firms have to invest in packaging technology to improve their competitiveness and business efficiency.

Many Vietnamese businesses have invested in new technologies, providing the market with many types of high-class packaging, meeting strict standards on food hygiene and safety.

Vietnam boasts a fast growing manufacturing industry and plays an important role in promoting economic development in Southeast Asia, said HJT Expo’s Bian,

Bian said that at the current growth rate, the manufacturing industry of Southeast Asia and Vietnam will present a lot of opportunities to international investors. It is in this context that the Interfoam Vietnam exhibition was organized, he added.

Foam is a material that has high application in most industries, including construction and packaging as well as civil use. The event aimed to help Vietnamese businesses easily access quality products and advanced technology from reputable suppliers in the international market. It would also help them assess market needs, exchange business development cooperation opportunities and seek investors, Bian said.