Country Overview: Vietnam

The container glass industry in Vietnam

Vietnam has registered the fastest economic growth among the ASEAN countries over the last fi ve years. The country has been called “the next Asian miracle” by various international fi nancial institutions with healthy economic growth forecasts, which will result in the steady growth of the country’s glass industry.

The Vietnamese container glass industry comprises of two large scale and a small scale container glass producer. Alcoholic beverages accounts for the lion’s share of total container glass consumption in the country. Nearly 20% of the total container glass demand is met through imports from the other ASEAN countries and China.

Covid-19 didn’t have much impact on the container glass industry in 2020 but the industry felt the impact of the pandemic last year. After a subdued 2021, domestic container glass production and consumption are expected to clock a growth of nearly 8% in the current year.

According to the World Bank country report on Vietnam: “Vietnam had a turbulent year in 2021. Despite a strong start in the fi rst semester, the Covid-19 outbreak in April derailed recovery and led to extensive economic costs. Vietnam’s economy grew by 2.58% in 2021. Looking ahead, GDP is expected to rebound to 5.5% growth in 2022 in a scenario where the pandemic is under relative control both at home and abroad.”

Nguyen Van Viet, Chairman of the Vietnam BeerAlcohol-Beverage Association said: “Vietnam’s beverage sector is looking for a kickstart after a turbulent couple of years. In 2021, we faced huge challenges related to logistics and shipping activities due to strict movement curbs in the southern provinces. Tough pandemic prevention regulations have caused many diffi culties for businesses to transport their products and organise production activities. In 2021, the production volume of beer in Vietnam reached around 4.05 billion litres, equal to nearly 93% of the previous year’s volume (4.35 billion litres). However, the consumption reduced 20% on a year-on-year basis.

In the economically dynamic Southeast Asian region, Vietnam stands out as a development success story. Over the last ten years, the country has recorded an average annual growth rate of 6%, which compares favourably with other countries in Southeast Asia.

With a population of over 98 million and a median age of 32.7 years, Vietnam has several dynamic trends, which augurs well for the further development of the glass industry in both the major sub-segments. Rising incomes, favourable demographics, and urbanisation are three of the key factors, which will keep the momentum of the current phase of the rapid growth of the glass industry.

Demand analysis

Alcoholic beverages account for more than 53% of the total container glass consumption in Vietnam. Non-alcoholic beverages, foods, and pharmaceuticals segments account for 12%, 18%, and 12% respectively, while the rest 5% goes to the miscellaneous segments.

Beer is the largest consumer of container glass bottles in the country. With a total consumption of 4,650 thousand kilolitres of beer (in 2019), Vietnam is the 9th highest consumer of beers globally. The importance of container glass in the domestic beer industry is evident from the

fact that two of the major brewers (Saigon BeerAlcohol-Beverage Corporation and the Hanoi Beer Alcohol and Beverage Joint Stock Company) have a stake in both the major container glass producers in the country.

Until about a decade back, nearly 90% of the beer was packaged in the container glass, but, during the last few years, the competition in the Vietnamese beer segment has intensified. Beer packaging in aluminium cans has also increased rapidly due to the government’s policy to completely ban non-recyclable packaging materials by the end of 2025. Currently, there are six manufacturers of aluminium cans for beer in Vietnam, who are giving stiff competition to the glass industry.

The Vietnamese beer industry is dominated by four brewers, namely Saigon Beer-AlcoholBeverage Corporation (Sabeco), The Hanoi Beer Alcohol and Beverage JSC (Habeco), Carlsbergowned Hue Brewery (Carlsberg owns 100% in this operation), and Heineken NV. These four companies hold 90% of the market on the basis of volume, while the remaining 10% is divided among Masan Brewery, Sapporo, AB InBev, and Carlsberg-owned Southeast Asia Brewery.

The packaged food segment is the secondlargest consumer of glass containers. Penetration of modern retail in the country during the last decade has increased the share of container glass in the food segment.

Raw materials

Vietnam is endowed with a rich supply of silica sand, one of the key raw materials in the container glass industry. The country’s 2,560 km-long, mainly flat coastline is host to many large alluvial silica sand deposits. The central coast region – from Quang Binh to Khanh Hoa – which skirts the western side of the South China Sea is abundantly rich in silica sand resources.

Van Hai in Quang Ninh province, Nam O near Da Nang City, and Thuy Trieu in Khanh Hoa province – are being mined to supply silica sand for Vietnamese glass industry. The largest of the country’s silica sand deposits is the 36.5 million tonnes in Thuy Trieu deposit in Khanh Hoa province. Thuy Trieu consists of a combination of special grade and grade I sand, which have high silicon dioxide (SiO2) content, making Thuy Trieu the most valuable silica sand deposit in the country. Vietnam’s other deposits contain mostly grade I (Van Hai, Quang Ninh province) and grade II sand (Thon Bung, Bac Giang province and Nam O in Da Nang City).

Soda ash, the other major component in container glass production is largely imported from China and US. Solvay, one of the largest global soda ash producers, has an office in the country.

O-I BJC Vietnam Glass

O-I BJC Vietnam Glass has one furnace and four production lines; the company produces 300 million glass containers per year for beer, soft drinks, food, wine, spirits, and pharmaceutical industries.

The company’s 8.4-hectare production plant is located in My Xuan A Industrial Zone in Ba Ria - Vung Tau province. It has a designed capacity to produce up to 100,000 tons of amber, flint, and, emerald green glass containers per year. The company has adopted NNPB (Narrow Neck Press & Blow) in the 4th production line, which allows thinner and more equal wall thickness of glass containers. Weight is reduced and consequently, energy and raw material consumption are minimised, which helps the company to achieve a more sustainable and environmentally-friendly manufacturing process.

The company has a long and transformational journey as a container glass producer in the country. Established in 1967 as Khanh Hoi Glassware Factory owned by SABECO, the company joined Fraser and Neave to become Malaya Glass Vietnam in 1993. Joint Venture O-I BJC acquired 100% shares from F&N in 2010, renaming the company as O-I BJC Vietnam Glass. A year later, the company relocated its manufacturing to the current site in My Xuan A Industrial Zone, Ba Ria - Vung Tau.

Located around 60 kilometers (37 miles) southeast of Ho Chi Minh City, the plant was built between September 2009 and November 2011. The current plant replaced OI-BJC’s existing facility

in District 4 of Ho Chi Minh City which was vacated by O-I BJC to facilitate the city’s urban development plans.

“In Vietnam, the packaged beer market, in particular, has always been predominantly in glass. Customers and consumers are seeking quality, taste, and purity of contents and glass are the best package to deliver that.

“The Vietnamese market is a dynamic one and quality demands and specifications from our customers are increasingly stricter. This new plant puts us in a wonderful position to meet and exceed those high standards now and in the future,” the then CEO of OI had commented on the occasion of the commercial start of this plant.

Parent company Owens-Illinois, Bowman, Pneumofore, Vertech, and Lubisol Engineering are some of the technology suppliers to the company.

San Miguel Yamamura Hai Phong Glass Company

Located in the northern port city of Haiphong, San Miguel Yamamura Hai Phong Glass is the country’s second largest container glass producer. With a designed capacity of 380 tonnes per day of glass containers, the company caters to beverages (both alcoholic and non-alcoholic) and food segments of the industry.

San Miguel Yamamura Hai Phong Glass (SMYHG) is a joint venture between Philippines’ packaging company San Miguel Yamamura Packaging Corporation (SMYPC) and Hanoi Beer Alcohol and Beverages J.S Corporation (Habeco).

San Miguel Yamamura Packaging Corporation (SMYPC) - a joint venture between two famous Asian groups, San Miguel from the Philippines and Nihon Yamamura from Japan.

San Miguel is known as the Philippines’ largest group specialising in producing beverage, food and container glass packaging. Nihon Yamamura is a large container glass manufacturer in Japan. Inheriting the advantages of these two groups in terms of technology and human resources, SMYGH has become one of the two leading container glass suppliers in the Vietnamese market.

Japanese company Yamamura Glass and Strutz International are two technology suppliers to the San Miguel Yamamura Hai Phong manufacturing plant.

Go Vap Glass

A container glass cum tableware glass producer, Go Vap Glass supplies container glass products to the cosmetics and perfumery industries, niche food companies, and pharmaceutical industries. Located at Vap District in Ho Chi Minh City, the company has a designed capacity to produce 110 tonnes per day of container glass through one furnace. �

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