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Vietnam chemical industry

Vietnam's chemical industry is still young and does not meet with domestic demand. But by cooperating with Japan, UNDP, this sector is expected to have potential future and contribute to sustainable development of the economy.


Vietnam's economy almost depends on agriculture and an emerging chemical industry. As a result, the country is required to import massive agrochemical and other chemical products. Vietnamese chemical industry is still in its infancy stage where it only produces a limited variety of basic chemicals. Chemicals for industrial use do not meet domestic demand and are only sufficient for pesticide production and several basic goods. Furthermore, pure and special chemicals are not produced in the country. In the agrochemical aspect, every year about 70% of urea demand is imported while ammonium phosphate is 100% imported.

Vietnam's chemical production technologies are considered backward compared to the world in general. Its chemical products have lower competitive capability compared to regional countries and Vietnam aslo have lower awareness to chemical risks. This leads to loss of natural resources and the country faces severe environmental pollution issues. At present, Vietnamese agricultural chemical market occupies approximately 0.5% of the international market.

Investment opportunities in Chemical industry:

Vietnam’s chemical industry growing impressively with annual growth of 12% is one of the key economic sectors and prioritized to fulfill the needs of other industries and the total economy. Production of detergents and cosmetics expands rapidly in Vietnam. Vietnamese companies such as NET, LIX, Daso, and joint-ventures as well as foreign invested companies such as Lever Vietnam and P&G have brought to the consumer new and nicely-packaged quality products. Manufacturing of paint and rubber products also rises as a result of such firms as Dong A, Dong Nai, and Casumina.

The chemical industry is important to the development of many other industries. Via Decision 207/2005/QD-TTg the Prime Minister approved the strategy of developing the chemical industry to 2010  also the development until 2020.Under this Decision, the chemical industry is showcased as one of the key industries and prioritized. Therefore, all domestic and external resources will focus on putting into place a comprehensive chemical industry, covering main domains such as fertilizer, common and special-use rubber, base chemicals (including both organic and inorganic chemicals), petro-chemistry, pure chemicals, pharmaceutical chemistry, and consumer chemicals to meet domestic demand and the requirements of regional and world economic integration.

In addition, the plan has encouraged application of advanced technology for high quality chemical products at competitive costs and  minimizing adverse impacts of chemical production on the environment. Also, the development of the chemical industry must go along with the restructuring of the industrial sector and total economy.

Chemical management:

Japan and Viet Nam cooperate:

Japan’s Ministry of Economy, Trade and Industry (Meti) and Vietnam’s Ministry of Industry and Trade start to cooperate on 15 July. The MOC is a part of the Asian Sustainable Chemical Safety Plan, proposed by Japan at a Japan-Asean summit in October 2010, which aims to ensure that Asian countries put in place effective chemical management systems based on scientific risk assessment. The MOC expect to help Vietnam to build and strengthen such management systems through policy dialogues and technical assistance designed  and to help formulate policies and regulations.

Here are practical means for cooperation:

The development of an implementation plan for a chemical management system based on risk assessment and risk management

The development of a database system for chemicals and a chemicals list to support the implementation of the Law on Chemicals in Vietnam

The provision of recommendations and guidance for developing implementation documents such as guidelines for the Law on Chemicals including implementation documents for the UN Globally Harmonized System (GHS) of chemicals classification and labeling

Training courses for government officials and the private sector to increase capacity for chemical risk assessment and management

Training courses for safety management of hazardous chemicals in factories.

UNDP and Vietnam cooperate:

The Vietnam Chemicals Agency (VCA) under the Ministry of Industry and Trade and the UN Development Program (UNDP) on October 31 has cooperated on sound management of chemicals. The UNDP and the UN Environment Program (UNEP) have funded a budget of more than 400,000 USD. Besides, the project may strengthen the capacity to integrate the sound management of chemicals (SMC) into economic planning and decision making, and initiate a domestic SMC regime consistent with the Integration of Sound Management of Chemicals in Development and Planning Processes (SAICM).

The reason for this project is that UNDP found that although the chemical industry in Vietnam accounts for about 10% of Vietnam’s industrial production value and employs 10% of industrial workers, it also causes many negative impacts on the environment and human health. It proved that  the management of chemicals in Vietnam needs to be helped; the lack of coordination and linkages between relevant ministries and agencies, and poor awareness of chemical risks and safe processes has given some bad affects. Therefore, UNDP expected that Vietnam may establish a coordinating mechanism for SMC with uniform methods and work to increase awareness within the government and stakeholder organizations in order to ensure the economy’s sustainable development.