Small country big opportunity: why does Vietnam's chemical industry attract global giants?

1. the status of Vietnam's chemical industry

industrial scale: in recent years, it has shown a growth trend, reaching 43.1 billion US dollars in 2024 and 47 billion US dollars in 2025. The target of 2030 is to achieve an average annual growth rate of 10 - 11%, accounting for 4% - 5% of industrial output value.
Segments: covering 10 segments such as petrochemicals and basic chemicals, plastics and rubber products are the core growth areas, with the plastics market reaching 10.92 million tons in 2024 and expected to increase to 16.36 million tons in 2029, with a compound annual growth rate of 8.44 per cent.
Development momentum: preferential policies, such as tax incentives, land supply, foreign-funded enterprises enjoy 10% enterprise income tax rate and equipment import tariff reduction; May 2025 to implement the amendment of the Chemical Law, strengthen the management of hazardous chemicals, and promote the standardization of chemical parks.
Foreign investment: by virtue of low-cost advantages and free trade agreement network to attract foreign investment, such as South Korea Xiaoxing Group additional investment, Chinese enterprises actively participate in project cooperation

2. the future development trend of Vietnam's chemical industry

industrial structure transformation: require green growth and circular economy, promote enterprises to adopt clean production technology, focus on the construction of chemical parks, encourage foreign investment in environmental protection technology projects, and promote the reform of state-owned enterprises
environmental protection and technology upgrading: focus on environmental protection and technology upgrading, improve emission requirements, plan to achieve 80% domestic self-sufficiency rate of basic chemicals by 2040, develop green products, encourage the implementation of waste recycling technology, and promote low-carbon transformation.
To fine chemicals: actively develop pharmaceutical intermediates, electronic chemicals and other high value-added products, the current fine chemicals companies are mostly foreign-funded enterprises.
Change in export direction: chemical exports are an important sales direction, ranking first in exports to the United States before 2025, and may expand markets in neighboring countries and Europe in the future. Exports of plastics and products and rubber products account for a relatively large proportion in 2024.

3. Policy Constraints and Orientation of Vietnam's Chemical Industry

amendment to the Chemicals Law: implemented in May 2025, adjusting the list of chemicals, adding the definition of "new chemicals", requiring the declaration of imported chemicals, products to meet technical standards, defining the standards for safe production facilities, and facing fines for violations.
Environmental protection policy: set a net zero emission target for 2050, require enterprises to adopt environmental protection technology, pay special consumption tax in high-polluting industries, and enjoy tax incentives for bio-based materials enterprises.
Raw material supply policy: impose tariffs on imported basic chemicals, provide preferential treatment for local petrochemical projects, set up technology centers to promote local enterprises to enter the foreign supply chain, and improve the local matching rate and self-sufficiency rate.
Industrial upgrading and international integration policy: develop key products according to strategic planning, promote project construction, provide subsidies to related enterprises, and provide preferential treatment to foreign-funded enterprises. The new policy brings pressure to small and medium-sized enterprises, and generally adopts the "two-track strategy" to promote industrial upgrading.

4. the resources and segments of Vietnam's chemical industry

oil and gas resources: proven oil reserves of about 0.45 billion barrels, natural gas reserves of 61 trillion cubic feet, supporting the production of basic chemicals
rubber resources: the world's fourth largest natural rubber producer, rubber exports reached $2.6 billion billion in 2024, rubber products are the main export force
apatite resources: reserves of 1.5 billion tons, is the key raw material for fertilizer production, Vietnam nitrogen fertilizer, phosphate fertilizer production capacity accounted for the forefront of Southeast Asia.
Bauxite resources: reserves of 12 billion tons, mainly used for aluminum smelting and refractory materials
biomass resources: sugarcane and biomass materials are abundant for the production of bio-based materials
development of new areas: promote the development of bio-based materials, electronic chemicals, renewable chemicals, etc., the market is growing fast, and enterprises have invested in the construction of related factories.
Key project construction: Longshan Petrochemical Complex is the largest petrochemical complex project, which promotes the self-sufficiency rate of petroleum products and focuses on the development of basic raw materials.

5. International Cooperation and Development Trend of Vietnam Chemical Industry

trade cooperation: Chinese enterprises export tariffs reduced, Vietnam through the RCEP rules of origin to avoid U.S. tariff barriers, exports to the United States to enjoy GSP tariff preferences, exports increased.
Resource recycling cooperation: cooperate with South Korea to develop resource recycling industrial parks, introduce advanced technologies, and set recycling targets
reduce tariffs to attract resources: March 2025 to implement the decree to reduce import tariffs to attract enterprises to expand investment
compliance promotes international integration: The new Chemicals Law, which will take effect in 2026, requires companies to declare information on imported chemicals to promote compliance with international standards and enhance export competitiveness.
Development trend: international cooperation from "complementary resources" to "technology symbiosis" leap, the future need to pay attention to compliance nodes, grasp the opportunities in emerging areas.

6. Vietnam Chemical Industry Investment Opportunities

investment preference areas: green chemicals, bio-based materials, electronic chemicals, semiconductor materials, high-end manufacturing industries, pharmaceutical and pesticide intermediates, regional collaborative industries
enterprise investment cases: South Korea SK Leaveo, Xiaoxing Group, China Huadian Group, Belgium John Cockerill, Man Kun Technology and other enterprises invest in the construction of related factories in Vietnam to promote industrial development.
Investment considerations: Vietnam's chemical industry is undergoing transformation, and investment companies can focus on investment opportunities in bio-based materials, green hydrogen and other products.

Risks and Countermeasures of 7. Investment in Vietnam's Chemical Industry

policy and regulatory risks: The new Chemicals Law has strict requirements, with foreign shareholding caps and project approval requirements in some areas; the countermeasures are to strengthen cooperation with local countries, prepare materials in advance, adopt appropriate models and apply for subsidies.
Risk of technology dependence and lack of supply chain: dependence on imports of basic raw materials, low localization rate of key materials and low efficiency of port logistics; countermeasures are to cooperate with scientific research institutions and enjoy services in the park.
Market competition and employment risk: the import market competition is fierce, the profit of ordinary plastic particles is low, and the labor cost is rising; the countermeasure is to focus on high value-added fields, introduce advanced equipment, abide by the labor law, and carry out cultural training
environmental and social risks: chemical production may face pollution leakage fines and social tensions, local corruption problems;