When ty le keo bong da anh hom nay global plastics industry is gradually shifting toward sustainable production, another revolution is taking place among plastic businesses – ty le keo bong da anh hom nay “green” revolution. ty le keo bong da anh hom nay rapid transition to eco-friendly products along with green production and consumption promotion policies is motivating global plastic manufacturers to map out their development strategies for ty le keo bong da anh hom nay future.
As a leading plastic Group in Vietnam with an ecosystem of 15 member companies closely following ty le keo bong da anh hom nay core business of plastic, An Phat Holdings (Ticker symbol: APH) has found a new direction with a strategic move: Building Southeast Asia’s largest PBAT green material manufacturing plant.
In an exclusive interview recently, Mr. Dinh Xuan Cuong – Vice Chairman and Chief Executive Officer of An Phat Holdings has shared APH’s development strategy.
From ty le keo bong da anh hom nay decision to launch a key project in “ty le keo bong da anh hom nay COVID Year”…
– Sir, why did APH choose 2021 – a difficult time for ty le keo bong da anh hom nay Vietnamese and international economies to build this large-scale plant? Is this considered a risky “move” of APH?
ty le keo bong da anh hom nay green development trend has been emerging for years and is increasingly popular in many countries with policies to protect ty le keo bong da anh hom nay environment, reduce plastic waste, and prioritize ty le keo bong da anh hom nay development of green and clean materials. Right now, we realize that ty le keo bong da anh hom nay global green material market is in a flourishing phase although there is a shortage in supply compare to actual demand. However, it is expected that in ty le keo bong da anh hom nay next 3-5 years, environmentally friendly products will dominate ty le keo bong da anh hom nay market and gradually replace traditional products.
Besides, when embarking on any new project, we carefully consider 3 basic factors: Firstly, identifying ty le keo bong da anh hom nay sector and products which are trendy and potential; secondly, a substantial profit must be estimated; thirdly, ty le keo bong da anh hom nay market size should be large enough. At present, APH’s management board and I realize that this project is ensuring ty le keo bong da anh hom nay three above factors, so there is no reason for us to delay. I understand that in this project, APH will be ty le keo bong da anh hom nay pioneer in Vietnam, so there will certainly be many challenges, but in return, ty le keo bong da anh hom nay chance of success is also greater.
– Is this ty le keo bong da anh hom nay reason why APH decided to increase ty le keo bong da anh hom nay scale of ty le keo bong da anh hom nay PBAT material manufacturing plant from a capacity of 20,000 tons to 30,000 tons?
Currently, APH is providing ty le keo bong da anh hom nay market with more than 100,000 tons of products per year. In 2019, we exported green products to 5 countries, and by 2020 this number has quadrupled. In Vietnam alone, we believe that if only a part of ty le keo bong da anh hom nay traditional packaging product market is converted to biodegradable resins (PBAT), ty le keo bong da anh hom nay upcoming plant will be just enough to meet domestic production needs. With an output of 30,000 tons, ty le keo bong da anh hom nay market will be able to consume all of APH’s output after ty le keo bong da anh hom nay plant comes into operation for one year.
– Why should it be PBAT but not another material in ty le keo bong da anh hom nay bioplastics industry?
ty le keo bong da anh hom nay cost and applicability of ty le keo bong da anh hom nay product are ty le keo bong da anh hom nay reason we choose to invest in PBAT. Firstly, compostable products from PBAT compounds will have production costs and prices closer to traditional plastic products because ty le keo bong da anh hom nay price gap between these two products is ty le keo bong da anh hom nay lowest compared to other bio-materials. Secondly, PBAT is a material that can be industrially produced, capable of being widely used in ty le keo bong da anh hom nay production of compostable products that are environmentally friendly, such as knives, spoons, forks, packaging, etc. Besides, packaging product is our competitive advantage and core business for ty le keo bong da anh hom nay past nearly 20 years. Thirdly, ty le keo bong da anh hom nay PBAT market is forecasted to have ty le keo bong da anh hom nay fastest growing among compostable materials, equivalent to a compounded annual growth rate (CAGR) of 18.3%. PBAT is also ty le keo bong da anh hom nay material accounting for ty le keo bong da anh hom nay largest proportion (17%) in bioplastics.
– Can ty le keo bong da anh hom nay upcoming manufacturing plant solve ty le keo bong da anh hom nay material problem for APH in ty le keo bong da anh hom nay near future, sir?
Currently, ty le keo bong da anh hom nay production of APH mainly relies on imported materials. In ty le keo bong da anh hom nay context of global trade being affected severely by ty le keo bong da anh hom nay Covid-19 pandemic, having to import 95% of raw materials from abroad will pose great risks to APH’s production activities. Also, our member company – AnKor Bioplastics in Korea only meets 1/10 of APH’s demand for compostable materials. Therefore, ty le keo bong da anh hom nay construction of ty le keo bong da anh hom nay plant will solve ty le keo bong da anh hom nay problem of input materials and product prices. When ty le keo bong da anh hom nay price barrier is removed, ty le keo bong da anh hom nay price gap between ty le keo bong da anh hom nay single-used plastic products and ty le keo bong da anh hom nay compostable products will narrow, and ty le keo bong da anh hom nay environmental-conscious users are ready to switch to eco-friendly products.
… To ty le keo bong da anh hom nay goals of joining ty le keo bong da anh hom nay global green supply chain
– In ty le keo bong da anh hom nay current global scenario that still challenged by Covid-19 and ty le keo bong da anh hom nay pandemic is hard to control in ty le keo bong da anh hom nay near future, in your opinion, is it difficult to find output for green material products?
In my opinion, ty le keo bong da anh hom nay Covid-19 pandemic has never slowed ty le keo bong da anh hom nay global green transformation. On ty le keo bong da anh hom nay contrary, practical policies to overcome environmental pollution and policies to promote ty le keo bong da anh hom nay production and consumption of green products have been implemented. In APH’s traditional markets such as Europe, ty le keo bong da anh hom nay US, Japan, and South Korea, ty le keo bong da anh hom nay green transition has been speeding up. That is also APH’s target market in ty le keo bong da anh hom nay coming time when ty le keo bong da anh hom nay plant is completed.
In Vietnam, with policies to reduce, replace and restrict ty le keo bong da anh hom nay use of single-use plastic bags to shift to more environmentally friendly products, market potential is huge. Vietnam is also ty le keo bong da anh hom nay market where APH can assert its sole position in ty le keo bong da anh hom nay supply of green materials.
– In your opinion, how will APH’s decision to invest and expand production of green materials affect ty le keo bong da anh hom nay Group’s business and ty le keo bong da anh hom nay material market in Vietnam?
From my point of view, businesses today are facing challenges of either catching up with ty le keo bong da anh hom nay world’s trend or lagging behind and getting out of ty le keo bong da anh hom nay race. Thus, building a green material manufacturing plant is a strategic step that ensures APH’s sustainable growth for at least 20 more years. At present, many domestic and foreign enterprises have also worked with us on ty le keo bong da anh hom nay supply of raw materials to produce environmentally friendly products. Thanks to ty le keo bong da anh hom nay construction of ty le keo bong da anh hom nay first green manufacturing plant in Southeast Asia, APH will change its position from a material-dependent manufacturer to a proactive player while promoting ty le keo bong da anh hom nay development of eco-friendly product manufacturing industries in ty le keo bong da anh hom nay coming years.
– What has APH prepared to ensure ty le keo bong da anh hom nay success of ty le keo bong da anh hom nay project from construction to operation?
There are 3 critical factors that will determine ty le keo bong da anh hom nay success or failure of ty le keo bong da anh hom nay project: People, technology, and finance.
Our advantage is that we have nearly 20 years of experience in this profession and a global customer network. However, to ensure project runs smoothly from construction to operation, we must take up ty le keo bong da anh hom nay challenges of ty le keo bong da anh hom nay forerunner. Fortunately, we have leaders who have many years of experience in ty le keo bong da anh hom nay marketplace, as well as young leaders with creative ideas and a team of enthusiastic staff.
In terms of technology, after acquiring and having ownership of ty le keo bong da anh hom nay company in Korea in 2018, APH has become ty le keo bong da anh hom nay only Vietnamese enterprise to hold ty le keo bong da anh hom nay patent for compostable materials. In addition, we also have exclusive production technology from Germany, ty le keo bong da anh hom nay formula for production is researched by leading experts in ty le keo bong da anh hom nay field of compostable plastics at AnKor Bioplastics factory (Korea) and registration for patent protection in Vietnam.
Regarding finance security, APH has prepared comprehensively to ensure that its financial resources will not be depleted during ty le keo bong da anh hom nay project’s implementation. In addition to listing on ty le keo bong da anh hom nay stock exchange to raise capital, APH’s Board of Directors recently approved ty le keo bong da anh hom nay plan to change ty le keo bong da anh hom nay project structure from APH’s plant to a subsidiary’s plant. This will help open up opportunities for cooperation with investors who want to participate directly in ty le keo bong da anh hom nay project, especially in ty le keo bong da anh hom nay current context that many foreign financial investors have expressed their interest and desire to invest in ty le keo bong da anh hom nay project that APH is implementing.
– ty le keo bong da anh hom nay first step is to increase ty le keo bong da anh hom nay scale of ty le keo bong da anh hom nay green material manufacturing plant in Vietnam, and after that is ty le keo bong da anh hom nay plan to build a manufacturing plant in ty le keo bong da anh hom nay United States – What is APH planning?
After researching ty le keo bong da anh hom nay market and expanding ty le keo bong da anh hom nay supply of eco-friendly products in ty le keo bong da anh hom nay US market, we see that ty le keo bong da anh hom nay scale and growth rate of this market will be ty le keo bong da anh hom nay fastest growing in ty le keo bong da anh hom nay world. That’s why we have formed a human resource team, built brand image, and established relationships with customers and partners in this market.
Recently, many investors have proposed to cooperate with APH to build factories in ty le keo bong da anh hom nay United States, but we prioritize building factories in Vietnam first while continuing research investment opportunities and chance to set up factory in ty le keo bong da anh hom nay US with partners. Meanwhile, our member companies – An Phat International or AFC Ecoplastics have been established in ty le keo bong da anh hom nay US to promote green product trade and begin preparation to enter these potential markets in ty le keo bong da anh hom nay next 2-3 years.
APH at ty le keo bong da anh hom nay forefront of radical transformation in 2021
–As ty le keo bong da anh hom nay first Vietnamese enterprise to invest in green material production, in your opinion, what challenges are awaiting APH?
ty le keo bong da anh hom nay challenge of being a market leader is to create market for its product. At present, ty le keo bong da anh hom nay cost of environmentally friendly products is 2-3 times higher than conventional products. Also, we just can not change consumer habits in a day. That is a common difficulty for many green material manufacturers.
However, in ty le keo bong da anh hom nay middle of every difficulty lies opportunity. APH’s advantage is having modern and exclusive production technology from Germany, production formula researched by leading experts in ty le keo bong da anh hom nay field and prestigious international certification for products. Besides, we have nearly 20 years of market experience and brand reputation to confidently bring our products to ty le keo bong da anh hom nay most fastidious markets. ty le keo bong da anh hom nay price issue will soon be resolved when ty le keo bong da anh hom nay manufacturing plant goes into operation and APH takes ty le keo bong da anh hom nay initiative in materials.
– In 2021, along with ty le keo bong da anh hom nay plan to expand ty le keo bong da anh hom nay production of green material, why did APH decide to increase its ownership in An Phat Bioplastics JSC (Ticker symbol: AAA)?
AAA is one of ty le keo bong da anh hom nay flagship companies in APH’s business ecosystem, in charge of ty le keo bong da anh hom nay packaging segment that accounts for a large part of ty le keo bong da anh hom nay Group’s profits. Also, most of ty le keo bong da anh hom nay compostable materials we produce will be used as inputs for AAA’s packaging production and consequently, AAA will be ty le keo bong da anh hom nay biggest beneficiary thanks to ty le keo bong da anh hom nay material autonomy. Thus, raising ownership in AAA will add value to APH’s shareholders.
– As a multi-business corporation, besides green products, can you share more about APH’s development strategies for ty le keo bong da anh hom nay next 5 years?
APH aims to become ty le keo bong da anh hom nay leading high-tech and environmentally friendly plastics Group in Southeast Asia. Regarding ty le keo bong da anh hom nay traditional packaging and engineering plastics segments, we focus on stabilizing production and improving operation efficiency. Meanwhile, ty le keo bong da anh hom nay two new areas including compostable materials and industrial real estate will be ty le keo bong da anh hom nay key drivers for ty le keo bong da anh hom nay Group to fuel growths and enhance its position in ty le keo bong da anh hom nay next 5 years.
– ty le keo bong da anh hom nay industrial real estate sector is mentioned as a strategic segment in APH’s business plan is also an area of interest to many investors. What are APH’s orientations in this segment in 2021?
In ty le keo bong da anh hom nay next 5 years, we aim to develop a huge land bank in Hai Duong, where has a favorable geopolitical position for attracting foreign investment into Vietnam. These industrial zones can create tens of thousands of jobs and are oriented to focus on attracting investment in environmental friendliness in industrial production fields such as manufacturing industries, mechanics, electronics; food processing industry and consumer goods; supporting industries, etc.
– With so many strategic moves, can you give guidelines of ty le keo bong da anh hom nay overall picture of APH in 2021?
In 2021, AAA will be back on track thanks to ty le keo bong da anh hom nay packaging business continuing its growth momentum, ty le keo bong da anh hom nay industrial real estate segment will stay stable, and ty le keo bong da anh hom nay supporting industry segment of Hanoi Plastics (Ticker: NHH) will recover post Covid-19 pandemic. Newly-consolidated businesses of AAA and NHH will also fully contribute profits from 2021. We set APH’s net profit target of VND590 billion (~$ 25 million), nearly doubling 2020’s. ty le keo bong da anh hom nay net profit target in 2021 for AAA and NHH are VND550 billion (~23,5 million) and VND150 billion (~$ 6,3 million) respectively.
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