PETpla.net Insider 06 / 2010

REGIONAL MARKET REPORTS 12 PET planet insider Vol. 11 No. 06/10 www.petpla.net THP Group: With PET to the top Dr. Tran Qui Thanh – Managing Director Jason Shaeffer – C.O.O. At the top - Dr.Thanh on the roof of his 45 hectare empire. “You must follow the attitude of the boss when you are a worker, in order that you can be the boss in the future. Try to train yourself to become a boss, otherwise you will be a worker all your life” With slogans like this, a thirst for action, and hard work, Dr. Thanh has build up a small empire. In fact the THP Group is by far the largest soft drinks manufacturer in Viet- nam and today employs around 3000 people. Tea in PET was the right choice Dr. Thanh, the founder and charismatic leader of the THP Group, has tirelessly travelled the world to collect flavours and new ideas for his business. The company started with beer and water, all of it filled into glass. Five years ago he decided to start filling tea - and the first PET activities began. At that time, nobody really believed that this would be successful. As there were no commercially available bottles in Vietnam for hot filling, Dr. Thanh simply decided to produce his own bottles and in 2004/2005 became the first hot-fill bottler in the country. In the beginning the bottles were produced on single- stage machines, but very soon the company purchased its first preform injection-moulding machine from Husky. The THP Group has probably the most extensive value-added chain among the beverage manufacturers, as they also extrude their own PE and PVC film (including printing) and make their own cardboard cases for packaging. The closure systems are entirely injected-moulded on Husky machines. Production on different floor levels – and a site of 450,000 m 2 bursting at the seams At first glance the factory reminds one of the shooting locations for the next science fiction movie: the whole factory is built on giant steel structures, and the production depart- ments are located on different floor levels. The total site area covers 450,000m 2 (45 hectares)! Today the company produces tea, juices, coffee, isotonic and energy drinks on its ten hot-fill lines and two aseptic lines. If we consider only those beverages filled into PET, 1,680mil- lion PET bottles (350ml and 500ml) can be produced and filled annually, and packed in 70 million cases. It is said that the company’s key to success is the ability to “fine-tune” the During our visit to Vietnam we also met major players in the fields of edible oil and seasoning sauce . Both sectors also report steady growth. Imported material and established machinery manufacturers There was, at a very rough estimation, an annual consumption of 40,000t of PET resin in 2009, and almost 50,000t are expected for 2010. Formosa Plastics Group is at present the only manufacturer of PET resin in Vietnam. However, we found none of this material in the factories. The price level seems to be unattractive, according to the statements of some manufacturers. The first choice is still imported material from other Asian countries. In the past, the leading resin supplier was Far Eastern Textile Ltd. from Taiwan, especially for hot-fill grades. But due to the higher import taxes for goods from Taiwan many manufacturers switched over to the Thai-made Shin PET material from Thai Shinkong Industry Corporation. In the field of machinery we can see a similar picture as in other SEA countries: Husky leads the market with its injection moulding machines for preforms and Sidel is doing the same in the stretch blow moulding category. SIPA has a strong presence when it comes to single- stage machines, and is competing with Nissei. There are only limited activities by Krones in the field of PET at the moment. It seems that the company is pretty much focused on the booming beer market, which is a glass domain. Some companies also use Chinese-made machines, which are mainly for the production of bottles without any particular quality requirements. Now, with the demand for higher production capacity, companies are partly switching over to the higher capacity Western machines. In-house (or through-the-wall) production , i.e. where the converter places the blower and sometimes the injec- tion moulding machine in the factory of the bottler, has been a common practice in Vietnam for several years. Above: Per capita consumption of non-alcoholic drinks in Vietnam and Asia Below: PET penetration in Vietnam and Asia (Figures Euromonitor, 2009) PET Penetration Vietnam Asia Water 100% 82 CSD 3% 40% RTD Tea 48% 55% Fruit/Veg. Drink 9% 41% Functional Drinks 1% 40%