Vietnam Monochloroacetic Acid Market Outlook to 2028

Vietnam Monochloroacetic Acid Market Overview

• In the last five years, the Vietnam Monochloroacetic Acid (MCAA) market has experienced substantial growth, this is reflected by the global monochloroacetic acid market reaching a valuation of USD 990 billion in 2023 driven by increasing demand from the agricultural and pharmaceutical sectors, where MCAA is used as a key intermediate in the production of herbicides and medicines.
• Major players in the Vietnam MCAA market include AkzoNobel, CABB Group, and Daicel Corporation. These companies have established strong footholds in the market due to their advanced production technologies and extensive distribution networks.
• Ho Chi Minh City and Hanoi are the dominant cities in the MCAA market due to their robust industrial bases and pharmaceutical and agricultural sectors. Ho Chi Minh City, being the economic hub of Vietnam, has a high concentration of manufacturing facilities and chemical industries.
• In 2024, AkzoNobel completed a substantial investment of USD 19.5 million at its Bac Ninh plant near Hanoi, Vietnam. The expansion includes five new powder coating lines and a line for water-based products targeting consumer electronics. This development aims to enhance the company’s presence in Asia and promote more sustainable manufacturing practices.

Vietnam Monochloroacetic Acid Market Segmentation

The Vietnam Monochloroacetic Acid market is segmented by various factors like application, end-user and region.

• By Application The Vietnam MCAA market is segmented by application into agriculture, pharmaceuticals, and chemical synthesis. In 2023, the agriculture segment dominated the market due to the high demand for MCAA in herbicide production. MCAA's role in enhancing crop yields and its effectiveness in weed control are important factors contributing to its dominance.

• By End-User: This Vietnam MCAA market is segmented by end-users into agriculture, pharmaceuticals, and others (Personal Care, Textiles, and Plastics and Polymers). In 2023, the pharmaceuticals segment dominated the market due to increased investment in healthcare and medicine production. MCAA is critical in the production of various medicinal products, which drives its demand in this segment.

• By Region The Vietnam MCAA market is segmented regionally into North, South, East, and West Vietnam. In 2023, the South region dominated the market due to the concentration of industrial activities and manufacturing. This region's robust industrial infrastructure and high demand for MCAA in various sectors contribute to its leading market share.

Vietnam Monochloroacetic Acid Market Competitive Landscape

• Daicel Corporation: In 2020, Daicel Corporation, which holds a 55% stake in Polyplastics purchased the remaining 45% from Celanese once it receives regulatory approval. The transaction is valued at USD 1.575 billion. The deal enhances Daicel’s position in the global market, particularly in high-performance plastics and speciality chemicals, providing a stronger competitive edge and improved market share.
• AkzoNobel: In 2024, AkzoNobel has revealed a USD 3.1 Mn investment in its Felling facility near Gateshead, aimed at advancing its powder coatings manufacturing capabilities. This investment will upgrade the site’s production infrastructure, reinforcing the company’s commitment to enhancing its operational efficiency and product quality.

Vietnam Monochloroacetic Acid Market Analysis

Vietnam Monochloroacetic Acid Market Growth Drivers

• Increasing Demand from Agricultural Sector: The growth of Vietnam’s agricultural sector is driving the demand for monochloroacetic acid (MCAA). In 2024, the Vietnamese government is investing USD 500 million in modernizing agricultural practices, which includes increasing the usage of effective herbicides made with MCAA. The rise in agricultural productivity and the need for efficient weed control are fueling this demand.
• Expansion of Pharmaceutical Industry: Vietnam’s pharmaceutical industry is rapidly expanding, contributing to the increased demand for MCAA. In 2023, the pharmaceutical sector in Vietnam generated a revenue of USD 16.1 billion driven by rising healthcare needs and a growing population. The government’s focus on improving healthcare infrastructure supports the pharmaceutical industry’s expansion. MCAA is used as a key intermediate in the production of various pharmaceuticals, thus directly benefiting from this sector's growth.
• Increased Demand for Eco-Friendly Products: The rising consumer preference for environmentally friendly products is driving growth in the Vietnam Monochloroacetic Acid market. As industries, particularly agriculture and pharmaceuticals, seek sustainable and less harmful chemical solutions, the demand for monochloroacetic acid, used in various eco-friendly applications, is increasing.

Vietnam Monochloroacetic Acid Market Challenges

• Environmental Regulations: Stringent environmental regulations in Vietnam pose a challenge for the MCAA market. The new environmental laws, effective from January 2024, mandate stricter emissions controls for chemical manufacturing plants. Compliance with these regulations requires substantial investment in pollution control technologies, potentially increasing production costs. According to the Ministry of Natural Resources and Environment, manufacturers face additional compliance costs of their annual revenue, impacting their profitability.
• Raw Material Price Fluctuations: The volatility in raw material prices for MCAA production affects market stability. In 2024, the cost of acetic acid, a key raw material for MCAA, increased by 10% due to supply chain disruptions and higher production costs. The Vietnam Ministry of Industry and Trade reported that fluctuations in raw material prices are expected to continue, which could lead to higher MCAA prices and affect market demand.

Vietnam Monochloroacetic Acid Market Government Initiatives

• Green Chemistry Initiatives: In 2023, the Vietnamese government launched the "Green Chemistry Initiative," aimed at promoting the use of environmentally friendly chemicals, including MCAA. This initiative provides grants and subsidies to manufacturers who implement sustainable practices. The program is expected to allocate a substantial amount in 2024 to support green chemical production, encouraging MCAA producers to adopt eco-friendly technologies and practices.
• Support for Agricultural Innovation: The "Agricultural Innovation Fund," introduced in 2024, is designed to support advancements in agricultural technologies, including the development and use of advanced herbicides. This fund, with an allocation of USD 100 million, aims to improve crop protection methods and increase the efficiency of herbicides made with MCAA.

Vietnam Monochloroacetic Acid Future Market Outlook

The Vietnam monochloroacetic acid market is poised for remarkable growth, driven by expansion of production capacity, increased market demand, and technological innovations in production technologies.

Future Market Trends

• • Increased Market Demand: By 2028, the demand for monochloroacetic acid in Vietnam is expected to increase remarkably. The agricultural sector’s growth, driven by ongoing investments and modernization efforts, will continue to drive the need for effective herbicides. Government initiatives and increased agricultural activities will support a steady rise in MCAA consumption. The market is projected to grow as the country’s agricultural output expands and modern farming practices are adopted.
  • Expansion of Production Capacity: In the coming years, MCAA manufacturers in Vietnam are anticipated to expand their production capacities to meet rising demand. Investments in new production facilities and advanced manufacturing technologies will enhance production efficiency and output. By 2028, several key players are expected to have increased their production capacities aligning with the market’s growth and international demand.