South Korea’s SK Leaveo, the biodegradable materials investment arm of SKC, earlier in August secured strategic funding of $40 million from the International Finance Corporation to finance construction of its biodegradable plastics plant in northern Haiphong.

The facility is part of SK Leaveo’s strategy to capture the growing demand for environmentally friendly packaging. The project will increase value addition and manufacturing complexity in the plastic packaging industry.

The funds will be used to complete and operate the Vietnam production facility, which is scheduled for completion in this quarter. SK Leaveo plans to reach an annual output of 70,000 tonnes of reinforced PBAT, aiming for commercialisation in the first half of 2026.

The previous month, Swedish packaging and processing giant Tetra Pak began to implement an additional aseptic production line, worth around $113 million at its Binh Duong facility.

Nguyen Thanh Giang, managing director of Tetra Pak Vietnam, said, “Vietnam’s packaging industry is at a pivotal moment. With rising consumer demand for sustainable and innovative solutions, the need for safe, lower climate-impact, and future-ready packaging is more critical than ever. Paper-based packaging, especially in the ready-to-drink segment, is leading this transformation.”

Tetra Pak’s expansion of the Binh Duong factory doubles its capacity to over 30 billion packs annually and adds 15 additional innovative and sustainable packaging formats. This enables faster delivery of just 7-10 days, giving Vietnamese manufacturers greater agility to meet trends like ready-to-drink and plant-based nutrition.

“With 99 per cent of domestic volume sourced for our local customers and cutting-edge Swedish technology, we’re building a resilient supply chain while ensuring food safety and quality,” Giang added. “The new capacity will contribute 55 per cent for Vietnam, 29 per cent to Malaysia, Singapore, Philippines, and Indonesia, and 12 per cent to Thailand, as well as to other countries including Australia and New Zealand.”

Elsewhere, Thailand’s SCG Packaging (SCGP) in June strengthened its consumer packaging business through an investment in Duy Tan Plastics Manufacturing Corporation.

The company has purchased an additional 30 per cent stake in Duy Tan. The investment, totalling approximately $109 million, raises SCGP’s total shareholding to 100 per cent. The funding is intended to broaden its range of solutions, diversify its product offerings, and deliver integrated services in response to the growing demand for packaging solutions. The move follows SCGP’s acquisition of 70 per cent of Duy Tan in 2021.

According to research by Dezan Shira & Associates, Vietnam’s packaging industry presents compelling growth fundamentals that foreign investors may not be able to ignore. Both paper and plastic packaging are growing at an annual rate of 8-10 per cent, with paper packaging expected to reach $4.54 billion by 2030, up from $2.85 billion in 2025. Vietnam’s packaging exports already exceed $2 billion annually.

Driving investment now is a policy shift, including Vietnam’s net-zero commitments and a long-term e-commerce plan regarding recyclable packaging that creates immediate demand for advanced, sustainable technologies.

Than Quoc Khanh, international business advisor at Dezan Shira & Associates in Hanoi, said, “The packaging industry is undergoing fundamental restructuring. Foreign companies are buying established players outright – the SCG acquisition of Duy Tan being a prime example – which creates a two-tier system of well-capitalised, advanced operations versus smaller local manufacturers finding their niche.”

Khanh further noted Tetra Pak’s aseptic packaging expansion showcases the stark technology gap that local competitors cannot match. This pressure, however, drives specialisation. Vietnamese companies like Ngoc Nghia, Bao Van, and Nhua Tan Tien have secured strong positions in eco-friendly PET bottles by leveraging relationships and agility. Meanwhile, high-tech segments like dairy packaging remain foreign-dominated due to technical complexity.

“Sustainability requirements are reshaping competitive dynamics entirely. When companies like SK Leaveo bring biodegradable materials to the market, they’re not just offering alternatives – they’re setting new standards,” Khanh said. “Local companies face a choice: adapt quickly or risk relegation to low-value segments. The winners will be those combining local market understanding with advanced capabilities, whether through partnerships or organic development.”