An Phat Holdings, a leader in the plastic industry, plans to invest in one of the largest compostable material manufacturing plants in Southeast Asia. 

Nguyen Le Thang Long, General Director of PBAT An Phat JSC, a member of An Phat Holdings, said the green material market poses great potential with global industry gradually shifting toward environmentally friendly products.

In Europe, the Americas, Australia, Canada and many other countries, governments have enacted bans or imposed high taxes on the production and consumption of traditional plastic and thin monolayer film. The demand for compostable and environmentally friendly products poses the demand for raw materials, opening up golden opportunities for businesses.

Global production capacity forecast for of bioplastics in 2019 – 2025. Graphics by the European Bioplastics Association.

According to the European Bioplastics Association, the green consumption trend has led to the rapid development of bioplastics, forecast to hit 2.87 million tons by 2025 with a growth rate of about 36 percent in the next five years.

Asia remains the major manufacturing hub, accounting for 46 percent of bioplastics production while Europe produces about 25 percent, predicted to increase to 28 percent by 2025.

Future of bioplastics

Besides raw materials produced from corn starch or cane sugar (PLA) and polymerized starch, PBAT - a compostable raw material source is forecasted as the future of the bioplastics industry.

Globally, leading manufacturers like BASF (Germany), Novamont (Italy), AnKor Bioplastics (South Korea) and recently Hengli Group (China) are supplying PBAT at a capacity of about 500,000 tons by the end of 2020.

In Vietnam, An Phat Holdings is one of the first enterprises to enter the PBAT market. "The compostable material PBAT manufacturing plant will open in September 2021, with an expected capacity of 30,000 tons per year, and will be inaugurated in 2023 to participate in the global PBAT material supply chain," An Phat Holdings stated.

The production of compostable products at an An Phat Holdings factory.
Photo by APH.

Despite its huge potential, the compostable material market requires Vietnamese enterprises to develop a strong financial and technological background to compete with global players.

"An Phat Holdings is very confident to enter the PBAT market with its position as the largest capitalized enterprise in the plastic industry in Vietnam, boasting a large customer network and global patents for green materials and products," an An Phat Holdings representative commented.

The PBAT manufacturing plant aims to produce materials meeting BPI Compostable (U.S.) and European TUV OK Compost and DinCertco Compostable standards.

Long said An Phat Holdings utilizes German production technology and South Korean expertise, ensuring the plant's PBAT material could compete in the international market.

Seventy percent of the PBAT volume would be used to bolster the supply chain of An Phat Holdings, including manufacturing compostable products like compostable garbage, food, and shopping bags, along with straws, paper cups, and cutlery.

The rest will be used for trade and supply to domestic and international manufacturers. Target markets include in the U.S., Europe, Canada, South Korea, and Australia.

An Phat Holdings stated it would reduce the cost of compostable material input by about 20-30 percent for subsidiaries like An Phat Bioplastics and An Trung Industries due to their taking the initiative in raw materials. Thus, the product cost would be reduced, creating a chance to expand domestic and international customer networks.