Paper, packaging firms see bright prospects ahead

Inside a bag factory of the An Phat Bioplastics JSC. (Photo the courtesy of the An Phat Bioplastics JSC)

Hanoi - Paper and packaging enterprises are optimistic about their prospects this year thanks to Vietnam's stable business situation.

The An Phat Bioplastics JSC (AAA) aims to achieve consolidated revenue of 9.5 trillion VND (412.8 million USD), up 28 percent. Post-tax profit is expected at 550 billion VND, nearly double that of 2020.

The Dong Hai Joint Stock Company of Bentre (DHC) aims to achieve 3.5 trillion VND in revenue and 399 billion VND in post-tax profit.

At the end of 2020, DHC had very impressive business results when it recorded a profit after tax 2.15 times higher than the previous year, reaching nearly 392 billion VND.

In addition, the Thuan Duc JSC (TDP) has set a revenue target of 1.97 trillion VND and a post-tax profit goal of 88 billion VND.

TDP is one of the leading enterprises in manufacturing environmentally friendly polypropylene (PP plastic) packaging products in Vietnam, with revenue and profit increasing in recent years.

The enterprise has a product line of shopping bags, mainly for export, accounting for half of the company's annual revenue, besides animal feed packaging product line and packaging agricultural products and the fertiliser packaging line.

The enterprise's 1A factory and 1B factory have a combined capacity of 25,000 tonnes of seeds per year and 8,000 tonnes of packages per year.

Its No 2 factory has an export capacity of 150 million packages per year, while its No 3 factory has a capacity of 8,000 tonnes of packages per year.

Q1 results

The An Phat Bioplastics JSC (AAA) announced its Q1 revenue at 2.28 trillion VND, up 45.04 percent over the same period last year, an increase of 708 billion VND. Post-tax profit reached 89 billion VND, up 41.27 percent from the same period last year.

The Dong Hai Joint Stock Company of Bentre (DHC) had net revenue of 1 trillion VND in Q1, up 51.7 percent year-on-year. This was also the first time DHC hit the milestone of 1 trillion VND in quarterly revenue.

DHC reported a post-tax profit of nearly 173 billion VND, up 138 percent over the same period last year, equivalent to earnings per share of 3,027 VND.

The Thuan Duc JSC (TDP) achieved Q1 net revenue of 467 billion VND, up 52 percent compared to the first quarter of 2020. Its post-tax profit reached more than 30 billion VND, more than two times higher than that of the first quarter of 2020.

TDP said in the first quarter of 2021, the domestic business market had stable and high revenue growth and domestic packaging sales of animal feed and agricultural products grew. The export market of supermarket shopping bags has recovered quite well from the same period of 2020.

According to SSI Securities Joint Stock Company (SSI), paper packaging consumption in Vietnam is expected to increase by 12 percent in 2021-2025 thanks to continuing urbanisation.

SSI forecasts the urbanisation rate, the proportion of the urban population to the total population, in the country will hit 40 percent in 2024 compared to 37 percent in 2019. The paper packaging segment also benefits from the rapid growth of Vietnam's e-commerce.

Analysts forecast that the growth of the plastic packaging segment in 2021 in Vietnam will depend on spending on food and non-alcoholic beverages.

As for the Asian market, according to analysts, the demand for packaging products will continue to grow and be the main growth driver for the packaging segment in Vietnam when it comes to exports.

Although packaging is an auxiliary industry for many manufacturing industries, it plays an important role and contributes significantly to the development of the economy.