Vietnam Chemicals Market Outlook to 2028

Vietnam Chemicals Market Overview

• In 2023, the Vietnam chemicals market reached a valuation of USD 3 billion, driven by the growing demand from agriculture, manufacturing, and petrochemical industries. The market growth is supported by the need for fertilizers in agriculture, increased industrialization, and the expanding production of petrochemicals. These sectors are essential for Vietnams economic development, and the chemicals market plays a pivotal role in supporting these industries.
• Key players dominating the market include Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo), Vietnam National Chemical Group (Vinachem), Viet Tri Chemical Joint Stock Company, and Duc Giang Chemicals Group. These companies have established themselves as market leaders through extensive product portfolios, strategic partnerships, and innovations in chemical production. Their presence in both the domestic and export markets ensures their dominance in the sector.
• In 2024, Vinachem announced plans to invest USD 350 million into expanding its fertilizer production capacity to meet growing domestic demand. This expansion reflects the market's robust potential, particularly in agrochemicals, and the companys focus on catering to the agricultural needs of southern provinces. This development highlights the growth opportunities within the Vietnam chemicals market, especially in response to the agricultural sector's requirements.
• Ho Chi Minh City and Hanoi are the dominant cities in the Vietnam chemicals market, thanks to their proximity to industrial zones and port infrastructure, which facilitate the export and import of chemical products. Ho Chi Minh City, in particular, is a manufacturing hub for chemicals, petrochemicals, and fertilizers, while Hanoi is central to the regulatory and governmental support that fuels the industrys growth.

Vietnam Chemicals Market Segmentation

The Vietnam chemicals market is segmented by product type, end-use industry, and region.

By Product Type: The market is segmented by product type into Petrochemicals, Agrochemicals, and Specialty Chemicals. In 2023, Agrochemicals dominated the market share, driven by Vietnams reliance on agriculture as a key economic contributor. Agrochemicals, especially fertilizers and pesticides, play a crucial role in enhancing crop yields and productivity.

By End-Use Industry: The market is segmented by end-use industry into Agriculture, Manufacturing, and Construction. In 2023, the agriculture sector held the largest market share due to the significant demand for fertilizers and pesticides. The chemicals used in agriculture, particularly nitrogen and phosphate-based fertilizers, are essential for Vietnams high-demand crops such as rice, coffee, and rubber.

By Region: The market is regionally segmented into North Vietnam, South Vietnam, East Vietnam, and West Vietnam. In 2023, South Vietnam led the market with a significant share due to its established industrial zones and port infrastructure, particularly in Ho Chi Minh City, which is the focal point for chemical production and export activities.

Vietnam Chemicals Market Competitive Landscape Overview

• Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo): In a key development, Petrovietnam Fertilizer and Chemicals Corporation (PVFCCo) announced a USD 450 million expansion project in 2024 to enhance its urea production, catering to the rising demand from both domestic farmers and international markets.
• Southern Fertilizer Company: In early 2024, Southern Fertilizer secured a USD 150 million loan to develop sustainable fertilizer products aimed at reducing the environmental impact of chemical usage in agriculture, supporting the governments Green Growth Strategy.

Vietnam Chemicals Market Industry Analysis

Market Growth Drivers

• Increased Agricultural Demand for Fertilizers: Vietnams agricultural sector continues to be a significant driver for the chemicals market, with over 50% of chemical production focused on fertilizers. In 2024, the agricultural industry required an additional 4.5 million metric tons of fertilizers to support rice, coffee, and rubber crops, which are essential for both domestic consumption and exports. This increased demand has pushed chemical companies to enhance their production capacity to meet these growing needs, as reported by the Ministry of Agriculture and Rural Development (MARD).
• Growing Industrialization and Manufacturing: Vietnams industrial sector grew by 7.3% in 2024, according to the General Statistics Office (GSO), contributing to a surge in demand for industrial chemicals used in construction, textiles, and machinery manufacturing. Chemicals like adhesives, coatings, and industrial solvents have seen higher usage, driving market growth. The government's Socio-Economic Development Plan aims to increase the number of industrial zones, which in turn bolsters demand for chemical products required for machinery and infrastructure development.
• Petrochemical Demand for Domestic and Export Markets: Petrochemical production in Vietnam grew by 8% in 2024, with over 40% of these products being exported to regional markets like China and South Korea, according to the Vietnam Ministry of Industry and Trade (MOIT). This growth in exports, driven by increased international demand for ethylene and propylene, has placed Vietnam as a key player in the Southeast Asian petrochemical market, creating growth opportunities for local chemical producers.

Vietnam Chemicals Market Challenges

• Environmental Concerns and Regulations: The growing awareness of environmental damage caused by the improper handling of chemical waste has led to the introduction of stricter environmental regulations. In 2024, the Vietnam Environmental Protection Law imposed fines of up to VND 5 billion on companies that failed to comply with waste management standards, forcing companies to invest in environmentally friendly practices, which increases operational costs.
• Rising Raw Material Costs: The prices of key raw materials such as crude oil and natural gas, essential for petrochemical production, have surged by 15% in 2024, as reported by MOIT. This price hike has led to increased production costs for chemical manufacturers, particularly in the petrochemical and agrochemical sectors, affecting profit margins and limiting the ability to scale operations effectively.

Vietnam Chemicals Market Government Initiatives

• Decree 08/2023/ND-CP: Introduced in early 2023, this decree simplifies the chemical industrys regulatory framework, encouraging foreign and domestic investments. The MOIT reported a 12% increase in FDI into Vietnams chemical sector in 2024, driven by this initiative, which significantly reduced the bureaucratic hurdles for chemical manufacturing permits and certifications.
• Vietnam Green Growth Strategy 2023-2030: In 2023, the Vietnamese government launched the Green Growth Strategy, focusing on the sustainable development of the chemical industry. It promotes investment in environmentally friendly and energy-efficient production processes. The strategy aims to reduce CO2 emissions from chemical production by 25 million metric tons by 2025, incentivizing companies to adopt cleaner technologies and practices.

Vietnam Chemicals Market Future Market Outlook

The Vietnam chemicals market is expected to witness substantial growth by 2028, driven by expanding demand for agrochemicals, specialty chemicals, and petrochemicals. Ongoing government initiatives and investments will further support the market's upward trajectory.

Future Market Trends

• Increased Demand for Specialty Chemicals: By 2028, the demand for specialty chemicals in Vietnam will be driven by the rapid growth of the countrys electronics and automobile manufacturing sectors. Specialty chemicals, especially those used in semiconductors and battery production, are expected to see an uptick in consumption, with the market projected to produce an additional 2 million metric tons annually by 2028, according to GSO forecasts.
• Sustainable Agrochemical Practices: The Vietnamese governments Green Growth Strategy will continue to push the agrochemical sector toward more sustainable practices, with bio-based fertilizers expected to account for 35% of all fertilizer sales by 2028. Companies in the market are expected to invest heavily in R&D to develop eco-friendly products that meet both government regulations and rising consumer demand for sustainable farming solutions.