Vietnam has just welcomed a new green material factory, which was inaugurated in Hai Phong city. The bio-plastic factory has a total investment of about $100 million (initial phase) and is invested by South Korea’s leading “Chaebol” – SK Group. The project is implemented by Ecovance Vietnam Co., Ltd., a subsidiary of SK Group, with the cooperation and investment of An Phat Holdings (APH).
This green material factory is considered a key project for Hai Phong in particular and Vietnam in general, as it has attracted a South Korean “giant” to invest in the country. The project is also enhanced in terms of credibility and assurance with the presence of Vietnam’s “big player” in the plastic industry – An Phat Holdings.
“Our investment cooperation with SK Group is a strategic move for An Phat Holdings, helping us accelerate and lead the green material trend by accessing a more abundant and higher-quality source of materials. At the same time, we have planned and laid out the expansion of the Group’s production activities with new projects, aiming for a total revenue target of $1 billion by 2030.” – said Mr. Pham Do Huy Cuong, CEO of An Phat Holdings, sharing the cooperation strategy with SK Group and the company’s key projects.
Why did An Phat Holdings choose to invest with SK Group (South Korea) to build a green material factory in Vietnam, while APH already has and is developing a biodegradable PBAT plastic factory project?
During the development of the Group’s green material project, we were fortunate to meet representatives of SKC (a subsidiary of SK Group and the parent company of Ecovance Vietnam) who shared the same orientation of developing a PBAT project in Southeast Asia. After a period of exchange and evaluation of Vietnam’s competitive advantages compared to other countries in the region, SK Group shared our vision and chose Hai Phong as the location for their factory.
In our discussions, we found that the two Groups have many similarities in market perception, investment strategy, and product positioning. In addition, SK Group’s project has a larger capacity than our planned factory and can produce many other green materials besides PBAT. Therefore, we decided to cooperate and develop with SK Group instead of becoming competitors in the same market.
How does An Phat Holdings plan to invest in SK Group’s project, and what strategic role will APH play in this project?
We will enter into a joint venture with SK Group for this project. Our main purpose in participating in the PBAT market is to secure a stable source of input materials for the production of fully biodegradable products.
With a larger capacity and more diverse products, investing in SK Group’s project will help us ensure a good price for raw materials without having to invest too much in the project. In this cooperation, An Phat Holdings, as a domestic partner, will participate in research and development, market development, and consumption of a portion of the factory’s output.
What advantages do you expect this project to bring to An Phat Holdings?
As mentioned earlier, SK Group’s project has a large scale and diverse products. In the past, when researching this project, we also wanted to develop a project of a similar scale, but due to financial resources, we could only implement a smaller-scale project.
Through our research, we know that a capacity of 70,000 tons/year is the optimal option, helping to minimize production costs and ensure competitive pricing. In addition, SK Group has extensive experience in the chemical industry, with SKC being a prominent company in this field. They have good relationships with raw material suppliers, superior technology, and abundant human and financial resources. Collaborating with SK Group will provide us with access to more raw materials at competitive prices, even compared to self-production on a much smaller scale.
Can you share with us An Phat Holdings’ other development plans, especially the PBAT project that APH previously planned to deploy?
In addition to developing bio-materials, we have many other manufacturing projects to develop in the next 3-5 years:
First is a project to be implemented in Hai Phong, a suitable location for chemical projects. This is a green project that helps create new renewable materials, which is an inevitable trend in the circular economy.
Second, in the Hai Duong area, we plan to allocate 19 hectares of industrial land to expand the production of strategic products, including environmentally friendly packaging, technical plastics, assembly, and more.
The expansion of production is based on the urgent needs of our existing customers, as order volume is increasing while production capacity is limited. Therefore, it is imperative for us to implement timely production expansion projects. To meet the capital needs of the entire Group, we are reducing our investment in the PBAT raw material factory project by partnering with SK Group.
In the medium and long term, An Phat Holdings aims to double the revenue scale of the manufacturing segment by 2030, with a Group revenue target of $1 billion, of which the manufacturing segment will contribute at least 60% of the total revenue.
Thank you for your time and insights, Mr. Cuong!
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