Usually in the first quarter the industry performs sluggishly, owing to a lunar New Year hang over. This time, however, MoIT statistics show a year-on-year growth rate of more than 35 percent.

Vietnam’s plastics exports have enormous potential as its growth rates are high, just behind industrial products, pepper and coffee. Last year, plastics had an export growth rate of 135 percent.

The United Nations said that besides benefiting from comparatively low tariffs, Vietnam’s plastics exporters were good at exploiting new markets.

Vietnamese plastics products have been exported to Japan, China, India, the Middle East and Africa.

However, industry officials admitted that like other industries, plastics producers were confronted with escalating costs.

Deputy chairman of the HCM City Plastics Association, Tran Cong Hoang Quoc Trang, said the industry was hindered by the rising cost of input materials.

Pham Thi Kim Tan of Visingpack plastics, said producers were restricted as they could not afford to import raw materials.

The industry imports nearly 70 percent of the raw materials necessary for production.

Apart from rising cost of raw materials and shipping, producers are now subject to monthly lending interest rates of 1.5-1.6 percent compared to 0.85-0.95 percent earlier in the month.

Mr. Tan said producers faced big challenges in the time ahead as they had vowed not to raise their prices in a bid to shield consumers from inflation. “Most plastics producers could only meet contractual obligations to uphold their reputation”.

Le Quang Doanh from Binh Minh plastics Joint Stock Company recommended producers focus on modernizing equipment to lift output and cut input costs.

Meanwhile, MoIT suggests plastics producers form alliances to meet large and long-term exporting contracts. Currently, most producers could only meet small orders as most of the nation’s 1,400 plastics producers are small and medium-sized enterprises.

The ministry has advised producers to apply new technology to churn out high-tech products, which can be used in automobiles, motorbikes, electronics, toys and consumer plastic products, in a move to augment added value.