Vietnam waste market shows potential
As a result of the strong economic
growth, a rapid urbanization, solid waste has become a pressing
issue of most cities in Vietnam. A market of more than 80 million
people and the economy of robust growth projected at 7.5% in the
medium term, combined with strict environmental requirements,
will create good business opportunities in this area.
The total market size for solid
waste management is estimated to be US$ 70 million for 2005 and
the average growth rate for the period of 2005-2020 is projected
at 10-15% per year. Overseas Development Assistance (ODA)-financed
projects represent the largest market for solid waste equipment
and services. Local production and technology cannot meet the
demand of the market, especially the requirements of ODA projects.
Vietnam has to import the key
equipment needed for solid waste management. Among imports, U.S.
products and technologies are highly regarded for their quality.
Vietnam’s market of solid waste equipment and services presents
good opportunities for U.S. companies.
Solid waste is one of the highest
priorities of Vietnamese cities. Nearly 70 percent of the municipalities
surveyed identified solid waste management as one of their top
Vietnam produces over 15 million
tons of waste each year from various sources. More than 80 percent
(12.8 million tons/year) is from municipal sources, including
households, restaurants, markets, and businesses. Industries generate
over 2.6 million tons of waste (17 percent) each year, making
it the second most significant source. Industrial waste is mainly
concentrated in the industrial parks, especially in the South.
About 160,000 tons/year (1 percent) of Vietnam’s waste is
In urban areas, average collection
rates are 71 percent, while in rural areas collection rates are
typically less than 20 percent. Socialization programs, which
devolve responsibility for waste management to local community
groups, are becoming more prominent throughout Vietnam.
Waste handling in Vietnam is
mainly carried out by Public Urban Environment Companies (URENCOs),
which are responsible for the collection and disposal of municipal
waste, including domestic, institutional, and in most cases also
industrial and healthcare waste. Although there have been significant
improvements by the URENCOs in handling waste, most of the municipal
waste in Vietnam is not safely disposed. The dominant form of
disposal of municipal waste remains open dumping. In many areas,
self-disposal methods – such as burning or burying waste,
or dumping in rivers, canals, and open fields – is common.
Out of the 91 disposal sites
in the country, only 17 are sanitary landfills. New landfill facilities
are needed across the country. The development of waste treatment
and disposal systems, which includes landfills, is the Vietnamese
government priority. Due to the lack of financial resources the
government is constructing most sanitary landfills with ODA funding.
Proper handling of hazardous waste remains severely limited. Industrial
hazardous waste treatment systems are largely inadequate.
Investments in waste management
have increased from US$12.3 million in 1998 to about US$67.1 million
in 2003. About 87% are investments to improve municipal waste
management. This is followed by medical waste management (12%)
and industrial waste management (1%)
One method for U.S. companies
to build a local presence in Vietnam is by establishing a representative
office. A representative office can facilitate development of
relationships with key industry leaders and government officials.
Another issue for foreign companies to consider when entering
the Vietnamese market are the restrictions placed on distribution
activities. Foreign companies are not allowed to distribute goods
themselves, but must rely on local firms. Financing for projects
in the environmental sector in general, and the solid waste sector
in particular, will continue to come mainly from the Official
Development Assistance (ODA) sources. It is important to maintain
contact with ODA sources and Vietnam’s Ministry of Planning
and Investment (MPI) as an overall planner of investment projects
and coordinator of ODA assistance.
Tracking ODA projects includes
establishing relationships with implementing agencies, ministries,
and project management units at the local level. The main Ministry
responsible for the environment in Vietnam is the Ministry of
Natural Resources and Environment (MONRE).
There are three main departments within MONRE that play key roles
in waste management. Additionally, five other ministries and the
provincial People’s Committees (PCs) are also directly involved
in waste management activities.
—Source: USDOC information,
Environmental e-Market Express, www.buyusa.gov/eme/enviro.html