CHAILEASE INTERNATIONAL LEASING CO.

, LTD

PLASTIC INJECTION
MACHINE

Prepared by: NGUYỄN MINH THU

CREDIT DEPARTMENT
HCMC, 2014
 Content
Industry overview

Current situation of Vietnam

Plastic Industry

Plastic Injection Machine

Industry Prospect

Risk analysis
 I. INDUSTRY OVERVIEW
 One the fastest growing industries in Vietnam, sustaining average annual
growth of 20% to 25%
 One of ten industries that are favored by the government
 Products have been sold in 151 countries all over the world, many of which are
hard-to-pleased markets such as Japan, the USA, The Netherlands, Germany,
UK, and so on. This proved that Vietnam’s plastics products have stable quality
level and high competitiveness

Main importers of Vietnam's plastic products in 2013

Japan
20%

Other 141 countries

25%

Thailand China
3% 14%

Dutch
5%

UK
5% USA
9%
Cambodia
5%
Germany Indonesia
7% 7%
 I. INDUSTRY OVERVIEW
 Major products categories: Packaging, office furniture, household plastic
products used in the kitchen, plastic products for construction, packaging
types used in transportation, …
For PE bags, with advantages of relatively cheaper costs of labor, rent fee of
land,… Vietnamese-made plastic bags are much cheaper compared with those
manufactured in developed countries => lots of big companies of plastic bag
in developed countries (especially in EU, US, Japan,…) import bags from
Vietnam and resell in their own markets
 Anti -dumping duty:
 US market: 52.3% to 76.11%. (Especially, the door to the U.S. market has
been shut to the PE bags since 2009)
 European market and other markets: no anti-dumping duty (while other
Asian countries are subjected to anti-dumping tax from 8%-30%, such as
China)
 Manufacturing equipment such as: calendaring and coating, extrusion
molding,  injection molding, extrusion blowing, laminating and printing lines
I. INDUSTRY OVERVIEW
 Difficulties:
• Depending up to 80% on imported raw materials, Vietnam
plastics industry is not stable and initiative, and need large
working capital. So far, only 3 companies produce plastic
resin, namely TPC Vina, Phu My plastics and Chemicals, PP
Plant of Dung Quat Oil Refinery
• The raw materials price fluctuations have a significant impact
on manufacturer’s total costs because raw materials account
for 50 to 60 percent of overall costs.  But increases in the raw
materials prices cannot be offset by increases in selling prices.
• 70% - 75% of machinery are second-hand ones used out-of
date technology -> leading high cost of production
 II. CURRENT SITUATION OF VIETNAM PLASTIC MARKET
a) Distribution of plastic companies

Distribution of companies by geographical area in 2012

The North of Vietnam
13%
The Middle of Vietnam
4%

The South of Vietnam

83%

Source: VPA report 2012 and Statistical Yearbook of Vietnam 2012

Key players: Binh Minh JS Co., Tien Phong, Minh Hung plastic pipes;
Tan Tien, Rang Dong, Van Don JS Co., Oai Hung, Ngoc Nghia, Tan Phu
Plastic Co., Hung Yen Plastic JS o., etc.
 II. CURRENT SITUATION OF VIETNAM PLASTIC MARKET
a) Distribution of plastic companies (cont’)
The 1st quarter's financial performance of plastic companies listed on stock market
 II. CURRENT SITUATION OF VIETNAM PLASTIC MARKET
b) Product category
Distribution of companies by product category in 2012
45%

40%

35%

30%

25%

20% 39%

15%

10% 22% 20% 19%

5%

0%
Packaging Consumer Construction Technical
Source: VPA report 2012 and Statistical Yearbook of Vietnam 2012
*Note: Packaging products: soft, stiff products (shopping bags, cosmetic pots, and medical
pots,...)
Consumer products: chairs, tables, and other furniture.
Construction products: water pipes, water tanks, decoration, sheet, roof shelter.
Technical products: high quality produces such as pressure pipes, cover of TV
 II. CURRENT SITUATION OF VIETNAM PLASTIC MARKET
c) Plastic materials

Top 5 Plastic materials imported into Vietnam in 2012

900,000

800,000 775,030
701,170
700,000

600,000
544,936
500,000 472,011

400,000 361,704

300,000
202,324 212,321 195,987
200,000
146,706
108,027
100,000

- PE PP Polyester PET PVC

Quantity (Tons) Value ($1,000)

Source: VPA report 2012 and Statistical Yearbook of Vietnam 2012
 II. CURRENT SITUATION OF VIETNAM PLASTIC MARKET
d) Machinery and technology
MACHINERY
Extrusion
Injection machines.
blow 10%
molding Injection
machines molding
30% machines
60%

TOTAL IMPORTED VALUE IN 2012

$80,000,000
$70,000,000
$60,000,000
$50,000,000 $76,060,000
$40,000,000
$30,000,000 $46,794,000
$20,000,000 $14,091,000
$10,000,000
$-
Injection molding Injection blow Extrusion machines
machine molding machine
Source: Ministry of Industry and Trade
 III. PLASTIC INJECTION MACHINE
a) Machinery category
*Packaging products: soft, stiff products (shopping bags, cosmetic pots, and
medical pots,...) Injection Blowing machine, Injection Molding
Machine, Extrusion Blow Molding Machine
* Consumer products: chairs, tables, and other plastic furniture… 
Injection Molding Machine
* Construction products: water pipes, water tanks, decoration, sheet, roof
shelter...  Die-Casting Machine
• Technical products: high quality produces such as pressure pipes, cover of
TV,…  Injection Molding Machine

Þ  Injection molding is ideal for producing high volumes of the same

objects => It, hence, is widely used for manufacturing a variety of
plastic products available today.
 III. PLASTIC INJECTION MACHINE
a) Machinery category

Classified by Machine type Note

- More popular
Vertical - Use for manufacturing of products
with big sizes
Shape
Use for manufacturing of products with
Horizontal small size (components of battery
containers for example)
More expensive
Electricity saving (The motor operates only when the plastic
machine
resin is heated to plasticity)
Production Cost Cheaper (around 20% compared with
Electricity non-saving electricity saving ones)
machine (The motor operates immediately when the
power is on)
1-color machine
Color
2-color machine More effective, more expensive
 III. PLASTIC INJECTION MACHINE
a) Machinery category

No. Typical Materials Typical products

Machine type
Used produced
1 Injection Blow Molding Polyethylene (Low Plastic Bottles
Density) LDPE, (LLDPE),
Polypropylene (PP),
Polyethylene -
Terephthalate (PET),
Polyvinyl chloride (PVC),
Polyethylene (High
Density) HDPE)
2 Injection Molding Acrylonitrile-Butadiene- Power-tool housing,
Styrene (ABS), Nylon Telephone handsets,
(PA), Polycarbonate Television Cabinets,
(PC),  Polypropylene Electrical Switches, DVDs,
(PP) and Polystyrene Automotive bumpers,
(GPPS) Automotive dash boards,
Battery Casings, …
 III. PLASTIC INJECTION MACHINE
a) Machinery category (pictures)
 III. PLASTIC INJECTION MACHINE
b) Product manufacturing flow chart
 III. PLASTIC INJECTION MACHINE
b) Product manufacturing flow chart of plastic chair

Melted plastic

Finished Product
 III. PLASTIC INJECTION MACHINE
c) Brand name
Some main brands are currently present in the Vietnam market:

ASIA EUROPE AMERIA

●
Taiwan: Chuan Lih Fa, Fu ●
Austria: Engel,
chu sin, Lien yu, Yanghing,
Jonwai, Han Chang, Lien Cincinati ●
Canada: Husky
Yu, Nanrong,… ●
Germany: Demag – ●
USA: PTI – Plastic
●
Japan: Mitsubishi, Niigata, Battenfeld – Boy- technical
Toshiba, Kawaguchi,
Sumitomo, Nissei, Kurabe Krauss maffei, International
●
China: Chen De, Chuan Arburg, Battenfelf – GmbH, SMS Plastic
Tian, Hai Tian, Yue Hong, Kraussmaffei Technology,
Jwell, Keewa, Dakelianshun
●
Korea: LG, Dongshin, Woo
●
Italy: Sipa, Amut SP Tecnomatic
Jin, Jinhwa
●
France: Sidel

Source: Ministry of Industry and Trade

 III. PLASTIC INJECTION MACHINE
d) Prices
 III. PLASTIC INJECTION MACHINE
d) Prices (cont’)
 III. PLASTIC INJECTION MACHINE
d) Prices (cont’):
 The prices depend mainly on the clamping force, brand name, YOM
 Prices of machinery manufactured in Europe are the most expensive
 The machines of Japanese nationalities are normally more expensive than
machines of other Asian nationalities
 Most of the machines are of second-hand ones, especially those from Japan
 Note: New regulation “Circular No.20/2014/TT-BKHCN” issued by Ministry
of Science and Technology on 15/07/2014: machines whose YOM over 5 years
are not allowed to import to Vietnam
IV. INDUSTRY PROSPECT
Plastic industry is recognized as an active and prospective branch of
economy in Vietnam, also thanks to the following reasons:

●
Increase in industry demand and market requirement

Inside
●
The labor force has solid educational background, is
hardworking and is potentially capable of advancing
their skills
●
Ability to remain agile and deal with smaller orders

Outsid ●

●
Plans to increase quality, manufacturer, etc as detailed
in the Government’s Strategy to 2020, with orientation
to 2025
Priority policies for foreign investment in Vietnam

e
●
Stable growth of country’s economy
●
Political stability
 IV. INDUSTRY PROSPECT
List of projects for plastic industry development
(attached with Decision No.2992/QD-BTC issued on 17/06/2011 by Ministry of Industry
and Trade
 V. RISK ASSESSMENT
 Financial highlights of CILC’s some existing lessees operating in plastic industry

Source: CILC
 V. RISK ANALYSIS
Cases’ performance:
Collection record: most of customers have good repayment records to CILC so far
Risks:
₋ Because of industry’s business nature, high working capital is always utilized for
inventory reserve and A/R.
₋ Risk of production cost: because of high reliance on imported resins with upward
trend of resins price. Plastic firms must rely from 70% - 80% on imported resins.
Consequently, the fluctuation of resins price has a large impact on firm's business
results because main materials occupy 70% - 80% of production cost.
In addition, any changes in foreign exchange policy issued by the government and
the global fluctuation of resins prices may have adverse effects on the selling
prices in particular and plastic firms’ business operation in general as well.
 Low VAT invoice issuing -> solution: require customers to provide utility bills to
figure out their real internal sales
 Liquidity of machinery: Because most of plastic firms use machinery with out-of-
date technology => low liquidity
₋ Challenge on environmental problems: Unforeseen Government's policy on
environmental protection may have negative impacts on plastic companies'
operation in general
THANK YOU