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Illustration of Ecovance Vietnam's biodegradable plastic factory. (Photo: An Phat Holdings)
While plastic packaging has long been an environmental destroyer, the new "biodegradable plastic" could be an alternative. As demand for eco-friendly materials grows in Southeast Asia, Ecovance Vietnam, the subsidiary of SKC Group from South Korea invested approximately 100 million USD in May to produce biodegradable plastic PBAT (Polybutylene Adipate Terephthalate) in the Dinh Vu Industrial Zone in Hai Phong City, with an annual production capacity of 70,000 tons. The factory is expected to become the largest PBAT manufacturing plant in the world and be completed by 2025.
What is PBAT biodegradable plastic?
PBAT is fundamentally a petroleum-based chemical product, but can be completely converted to biomass, carbon dioxide and water by microorganisms. So, it is biodegradable polymer and one of the main products to replace traditional plastics.
The Ecovance facility will produce two types of biodegradable plastics, including PBAT and PBS (Polybutylene Succinate), with annual production capacities of 70,000 tons and 59,500 tons respectively. Additionally, the factory also produces 6,300 tons of the by-product THF solvent per year.
The initial construction of the factory covers a total area of approximately 344.488sq ft, and it is expected to be completed and operational by the third quarter of 2025. Furthermore, Ecovance is already prepared for expansion plans, with anticipated capital increases to around 500 million USD by 2030.
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Representatives at the factory groundbreaking ceremony. (Photo: An Phat Holdings)
Vietnam plastic market grows, relies on imports
According to Mordor Intelligence, the ASEAN plastic market is estimated to reach 30.48 million metric tons by 2024, with growing demand for biodegradable plastics. Vietnam's plastic market accounts for approximately one-third of the ASEAN’s (around 10.92 million metric tons), and the compound annual growth rate (CAGR) is projected at 8.44% in the 2024 to 2029 period, significantly above ASEAN average of 4%.
However, Vietnam's plastic market heavily relies on imports. Ho Duc Lam, Chairman of the Vietnam Plastic Association (VPA), stated that "Vietnam's domestic production of raw materials only meets 30% of Vietnam's market demand, while the remaining 70% is imported from various countries and regions."
SKC has invested Vietnam to produce bio-based materials for the first time in collaboration with local companies after noticing market gap. The Vietnamese side is funded by An Phat Holdings Group, one of the local pioneer of biodegradable products, also operating a PBAT plant with a capacity of 30,000 metric tons in the Dinh Vu Industrial Zone. In 2022, An Phat Holdings Group partnered with Nexeo Plastics, a leading global plastic distributor, to export their biodegradable plastics to the United States, Canada, and Mexico.
Vietnam strives to have advanced bio-tech by 2045 to attract investments from South Korean companies. Last year, South Korea's Hyosung Group invested 740 million USD to build a biodegradable fiber plant in Ba Ria-Vung Tau, a province in southeastern Vietnam.
According to Mordor Intelligence, the global bioplastic market is estimated to reach 2.09 million metric tons by 2024, projected to grow to 4.63 million metric tons by 2029. The CAGR from 2024 to 2029 is expected to be 17.25%, indicating rapid market expansion.
Source: VnEconomy, Mordor Intelligence, Nhipcaudautu, Baodautu
