PETpla.net Insider 06 / 2017

EDITOUR PET planet Insider Vol. 18 No. 06/17 www.petpla.net 35 Over the years since 2011, the econ- omy has been growing at a constant rate of 7%, a trend which appears to be continuing. So far, so good, although it is pos- sible that this could become a problem in the medium term, as the appar- ent stability and success has led to some degree of complacency. Urgent structural irregularities have not been addressed, including the development of a legally binding framework for the market economy; the fight against high levels of government corruption; ever- present skills shortages; and very high energy costs. The long-distance trans- port of goods is also challenging. Cam- bodia’s transport infrastructure is fairly basic and many of its roads remain unmade. The capital, Phnom Penh has a population of around 2 million, includ- ing its suburbs. It is also the country’s tourist hub, although many of its visitors also travel to the world-famous Angkor Wat temple complex, some 330km away. In addition to its growing tour- ism industry, Cambodia’s key economic sectors are agriculture, textiles, shoe making and construction. In terms of international trade, the textile industry’s US$6bn value make it the country’s most valuable export sector. (Sources: World Bank, Trading Economics, WKO, OEC) The packaging market in Vietnam According to a report by the German Engineering Federation (VDMA), the economic upswing in Vietnam has led to a higher standard of living, superior standards of educa- tion, and a huge increase in demand for food packaging. It is forecast to increase by 38%, from 3.9m. tonnes in 2015 to 5.4m. tonnes in 2020, with milk products accounting for the biggest overall share; this segment alone is expected to increase by 45%. The packaging segment showing the strongest growth is rigid plastics, primarily PET bottles, which is fore- cast to grow by 50% by the end of the decade. Metals are expected to grow by 31%, cartons by approximately 10% and glass by around 25% (see VDMA table below). Consequently, demand for high-end processing technology is high. According to the analysts, 2015 saw imports of machinery reach a value of US$426m – an increase of 10% over the previous year. With imports to the value of US$148m, China was the leading country of origin, followed by Germany (US$84m) and Japan (US$32m). The figures and positive forecasts matched those of the businesses that we visited with here. For example, Duy Khan, a manufacturer of machinery and moulds, is expanding into a bigger plant. PET processor Ngoc Nghia cur- rently has a 40% market share and is forecasting a huge increase in demand for packaged water, liquid food and non-food products over the coming years. In 2016, one of its customers, a leading water brand in Vietnam, recorded a 127% increase in volume Cambodia lies to the south west of Vietnam. With a total land area of approximately 181,000km 2 it stretches roughly 450km from north to south and up to 580km from east to west. Across the border to the north lies Laos; Thai- land is located to the north and north- west; and the Gulf of Thailand washes its south coast. The country is home to some 16 million people; the aver- age age of less than 25 makes it even younger than Vietnam. Over the past 150 years Cambodia has, like Vietnam, experienced periods of bloodshed and instability. It was controlled by Thai- land and Vietnam in the 19 th century, before France established a protector- ate in 1863 and then officially colonise the country in the 1880s. After being occupied by Japan during the Second World War, Cambodia first declared its independence in 1945; the French then returned and the country didn’t gain full independence until 1953. From the mid-1950s onwards, political differences led to the development of at least two, armed, opposing camps: a Communist faction, and a government oriented to western values. The civil war that erupted in 1970 lasted for five years and ultimately involved North Vietnam, South Vietnam and the USA, in support of various parties within the country, bringing the Vietnam war to Cambodian soil and contributing to the strength- ening of the ultra-Communist Khmer Rouge, which took power in April 1975. Its “Year Zero” declaration led to the emptying of the cities, in pursuit of a radical attempt to transform Cambo- dia into a peasants’ state. The project had appalling consequences for the population; it is estimated that between 1.7 and 2.2. million people died at the during this period. In 1979, when the regime was overthrown with help of the Vietnamese Army, the People’s Repub- lic of Kampuchea was founded. It has been officially known as the “State of Cambodia” since 1989. This still wasn’t the end of Cambo- dia’s turmoil. Intermittent conflict and the existence of a virtual ‘state within a state’ to the north of the country con- tinued until the Paris Peace Accords of 1991, which saw the disarming of the Khmer Rouge and ushered in the coun- try’s transformation and move from a planned economy to a market-oriented, westernised economy. Membership of ASEAN and the WTO enabled Cam- bodia to gain access to global markets. Vietnam: Packaging demand by material 2015-2019, Source VDMA. Macro-economic data Vietnam Population (2016) 92.6 million Population growth (2015) 1.07% p.a. GDP (2015) US$ 193.6 billion GDP growth rate (2016) 6.1% GDP per capita (nominal, 2016) US$ 2,164 Import / export (2014) US$ 148 billion / US$ 150.2 billion Import / export (2015) US$ 165.7 billion / US$ 162.1 billion National debt (2015) 58.3% of GDP Unemployment (2016) 3.7% Inflation (2016) 4.7%