11 April 2014 08:38 [Source: ICIS news]
SINGAPORE (ICIS)--South Korea’s polypropylene (PP) end-products, household plastic products such as food containers and plastic film, are gaining market share in Vietnam, several traders said on Friday.
Locally-made products have been losing grounds due to their poor designs and marketing, the traders said. However, domestic manufacturers were reluctant to invest in these segments because of the low margins.
A representative from Maximark, a supermarket in Vietnam, said local products were 20-30% cheaper than imports of similar quality. However, local customers remained drawn to the imports of well-known brand names because of their better finish and quality.
The preference for imports is not transferred to the PP injection grade, which is the upstream for the household plastic products.
Most traders and end-users said that they largely make purchasing decisions based on the lowest offers. They also purchase from their domestic producer, Binh Son Refining, due to the time advantage of shorter delivery periods.
In addition, dutiable cargoes of South Korean-origins are usually priced $40-60/tonne higher than the dutiable cargoes of India and middle east-origins.
During the week, a Saudi-origin cargo of 100 tonnes changed hands at $1,500-1,510/tonne CFR Vietnam while south Korean-origin cargoes, which were offered at $1,560/tonne CFR Vietnam, received scant buying interest.
"Many end-users prefer Korean brands. It's part of the Hallyu (Korean wave). However, the loss of market share will not be of a huge impact to the domestic PP production, whose cargoes are still being used across other markets, including the heavy industries," said a trader.
"Local manufacturers will still turn to the cheaper cargoes because they understand that end-users go for the brand and not the material which was used in the production," said a separate trader."
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