According to the CEO of An Phat Holdings (APH), cooperating with SK Group, a leading corporation in South Korea, will help APH access more abundant and quality raw materials, helping businesses optimize costs and resources for green materials projects.
Vietnam has just seen another green material factory being started in Haiphong City. The bioplastic factory has a total investment of about US$100 million (first phase), invested by a leading South Korean chaebol – SK Group. The project is implemented by Ecovance Vietnam Co., Ltd. under SK Group, with the cooperation and capital contribution of An Phat Holdings (APH).
This green material factory is considered a key project of Haiphong in particular and Vietnam in general when it attracts South Korean “giants” to invest in Vietnam. Along with that, the project also has increased prestige and is guaranteed with the presence of the “giant” of the plastic industry in Vietnam – An Phat Holdings.
“The investment cooperation with SK Group is a strategic step of An Phat Holdings, helping APH quickly catch up with the trend of green materials when accessing abundant and better quality raw materials. At the same time, we have a plan and roadmap for expanding our production activities with new projects, aiming to achieve total revenue of US$1 billion by 2030,” Pham Do Huy Cuong, CEO of An Phat Holdings, said of the cooperation strategy with SK Group and the key projects of the business.
Why did An Phat Holdings choose to invest with SK Group (South Korea) to build a green materials factory in Vietnam, while APH already has a PBAT biodegradable plastic factory project?
During the process of developing the Group’s green materials project, we had the opportunity to meet representatives of SKC (a member company of the SK Group and the parent company of Ecovance Vietnam). SKC also has the same direction of developing PBAT material projects in Southeast Asia. After a period of exchange, learning to evaluate Vietnam’s competitive advantages with other countries in the region, and sharing the same view with APH, SK Group chose Haiphong as the destination for its factory.
During the exchange process, we realized that the two Groups have many things in common in terms of market assessment, investment strategy and product positioning. In addition, SK Group’s project has a larger capacity than our planned factory, and can also produce many other green materials besides PBAT. Therefore, we decided to cooperate and develop with SK Group, instead of becoming competitors in the same market.
How does An Phat Holdings plan to invest in SK Group’s project and what strategic role will APH play in this project?
We will cooperate in a joint venture with SK Group in this project. Our main purpose when entering the PBAT market is to need a stable source of input materials to produce completely compostable products.
With larger capacity and diverse products, contributing capital to SK Group’s project will help us ensure raw material sources at good prices without having to invest too much in the project.
In this cooperation, An Phat Holdings, as a domestic partner, will participate in research, market development, purchase and consumption of part of the factory’s products.
What advantages do you expect the project will bring to An Phat Holdings?
As mentioned above, SK Group’s project is large in scale and turns out diverse products. Previously, when researching the project, we also wanted to do a project on a similar scale, but due to financial resources, we could only carry out the project on a smaller scale.
Through research, we know that a scale of 70,000 tons/year is the optimal solution, helping to minimize production costs and ensuring good prices. In addition, SK Group is a corporation with extensive experience in the chemical field with the prominent company in this field being SKC. SK Group also has good relationships with raw material suppliers, has superior technology and abundant human and financial resources. Cooperating with SK Group will help us access more raw materials at more competitive prices, even compared to producing on a much smaller scale ourselves.
Could you tell us about the group’s other development plans, especially the previous PBAT project that APH plans to implement?
In addition to developing biological materials, we also have many other production projects in the next 3-5 years:
The first is the upcoming project in Haiphong, which has a suitable location for chemical projects. This is a green project that helps create new renewable materials, an inevitable trend of the circular economy.
Second, in Hai Duong Province, we plan to set aside 19 hectares of industrial land to expand production of strategic products, including compostable packaging and technical plastics.
Production expansion is based on the urgent needs of existing customers when the number of orders is increasing while production capacity is limited. Therefore, we inevitably need to carry out production expansion projects promptly. To meet the capital needs of the entire Group, we reduced investment in the PBAT raw material factory project by accompanying SK Group.
In the medium and long term, An Phat Holdings aims to increase the scale of manufacturing revenue by two times by 2030. At that time, the Group’s total revenue orientation is US$1 billion. In which the manufacturing segment accounts for at least 60% of total revenue.
Thank you very much!
