FINAL EXAM ESSAY GLOBAL STRATEGIC MANAGEMENT

Therefore, companies producing bioplastics are born more and more in the contemporary world, especially, An Phat Holdings APH is a high-tech and environmentally-friendly plastic company

UEH UNIVERSITY COLLEGE OF BUSINESS SCHOOL OF INTERNATIONAL BUSINESS

AND MARKETING

FINAL EXAM ESSAY GLOBAL STRATEGIC MANAGEMENT

UEH UNIVERSITY COLLEGE OF BUSINESS SCHOOL OF INTERNATIONAL BUSINESS

AND MARKETING

FINAL EXAM ESSAY

Course: Global Strategic Management

Lecturer : Nguyen Van Dung Class code : 22C1BUS50313902 Student name : Dang Nhung Huyen Student ID : 31211021086

Batch – Class : 47 – KMC02

Ho Chi Minh City, October 28 th , 2022

i Introduction

Nowadays, globalization is an inevitable trend in countries They always encourage trade

with each other to develop their economies and achieve certain goals In that context, plastic

is one of the industries that has had significant and consistent growth for many years,

particularly in 2021 (the global plastic market size was valued at 593,000 billion USD in

2021)

Among these, plastic is an important component of both daily life and industrial production

The role of plastics in modern industries is very important Due to their superior qualities,

these materials have become quite popular in a variety of industries, including automotive,

electrical and electronic, manufacturing, medical, and others Besides the strong development

of production in the world, environmental concerns are always an economist's priority

because using plastic has many negative impacts on the environment, such as a long

disintegration process, water pollution, the eradication of helpful soil microbes, and a

reduction in plant life; moreover, plastic can produce harmful substances that cause cancer

for users; That means, they want to seek both financial and environmental gains Due to

that necessity, firms are now more motivated to provide “green” products that meet both

market demands and environmental issues; canvas bags, bamboo straws, and other products

are a few examples of those that are currently widely in use

In response to these detrimental effects, countries have been seeking out, creating, and

manufacturing “greener” raw materials in an effort to reduce harmful effects on both people

and the environment Therefore, companies producing bioplastics are born more and more in

the contemporary world, especially, An Phat Holdings (APH) is a high-tech and

environmentally-friendly plastic company in Vietnam and now leading in Southeast Asia

a The aims of the essay

The main aims of this essay are to know more about the global strategy of the company;

research a macro environment in the target market of the industry, especially, the plastic and

bioplastic industry; moreover, to learn about the competitors of Vietnamese companies in

other countries And doing the final exam essay of course Global Strategy Management can

help students to understand and remember the global strategy and entry strategy of the

company better This essay can provide the framework for students to approach data in a

more purposeful and methodical way

b Reasons to choose the company

The first reason to choose APH is this is a Vietnamese company that operates in the plastic

industry Second, the environmental issue is always a prioritized concern of countries, in

which plastic is a necessary and indispensable material for each country And APH is a

company that focused on a production line of bioplastic products, moreover, APH has

strength in the Southeast Asian market and aims to export to other regions like the US and

Europe Finally, the plastic industry in Vietnam as well as other countries have developed

strongly so the data for the essay can be met

c About the company

Name: An Phat Holdings Joint Stock Company

Address: Lot CN11+CN12, An Dong Industrial Park, Nam Sach District, Hai Duong

Province, Vietnam

Stock symbol: APH

Phone: (+84) 24 3206 1199

Customer service hotline: (+84) 18009050

Email: info@anphatholdings.com

Website: anphatholdings.com

Logo:

A Development history

In 2002, the former owner of An Phat Holdings, Anh Hai Duy was established In 2005, the

first packaging plant went on with a capacity of 13,200 tons/year in Hai Duong till 2013, the

production scale achieved a milestone with a total production capacity of 57.000 tons/year

And in 2017, established An Phat Holdings Joint Stock Company with a charter capital

reaching 1,100 billion VND, then became the no.1 high-tech plastic business in Vietnam In

the first year of 2022, APH held the ground-breaking ceremony for the PBAT Degradable

Plastic Factory - the first green material factory in Southeast Asia And Ernst & Young

Vietnam Co., Ltd was the company responsible for auditing APH in 2021

B Business sectors

APH began by making thin monolayer film products, and since then, the company has been

growing steadily With an innovative and creative mindset, APH operates in 06 key sectors:

(1) – Compostable products and AnBio compounds; (2) – Packaging; (3) – Engineering plastics & Building materials plastics; (4) – Raw materials and Chemicals for the plastic industry; (5) – Precision engineering & molding; (6) – Industrial real estate With this plastic ecosystem, APH has affirmed the brand name to bring their products to overseas markets such as Europe, America, Japan, Korea, Singapore, Taiwan, …

C Business locations

APH owns a system of 16 factories producing plastic goods and materials Member units

have headquarters, representative offices, and branches in Vietnam, Singapore, Korea,

France, and the US More than 70 countries and territories make up the customer base of the

Group And APH has 16 subsidiaries on 31/12/2021

D Financial ratios

Market capitalization VND 7,248 billion (on Dec 31, 2021) Total assets VND 12,328 billion (on Dec 31, 2021) Net revenue VND 14,794 billion (in 2021)

Profit after tax VND 238 billion (in 2021)

ii Analysis of the macro environment in the target markets a Economy and business

environment

The US is the largest industrialized country in the world with a robust and competitive

economy (the GDP in 2021 of the US is about USD 22,99 trillion) The US is also a powerful

country in the exporting and import market of the US is the biggest and most varied in the

world (about USD 3,000 billion/year) The US market is not only competitive but also

diversified, it can draw and consume a wide range of medium to high-quality products

In addition, having a population reaching 335,396,894 (October 24, 2022) people which is

ranked third in the globe, the US has become the market that attracts many businesses in the

world About 2,2 million of them are Vietnamese who reside in the US, which is a sizable

enough group to promote the economies of the US and Vietnam With a high quality of the

customer, the US is viewed as a prospective market that companies worldwide, like APH,

wish to pursue In particular, the plastic market, which is a sector that is important to the

growth of the US economy, has a market demand valued at USD 86,02 billion in 2021

The plastics industry in the US is among the most developed in the world, meeting both domestic

demand and exporting to a large number of foreign countries Despite its dominance in this

sector, the US still has to import a large amount of plastic (both raw materials and finished goods)

from other countries around the world, with an estimated import turnover of about USD 211

billion in 2019 Vietnam is one of the partners that the US imports the most plastic from among

these countries The third-largest export market for Vietnamese plastics in 2019 was the US, and

Vietnam was one of the top five countries from which the US imported plastic The export

growth rate of Vietnamese plastic products in this market has

increased rapidly in recent years According to data from Vietnam Customs, in the first 10

months of 2020, the United States surpassed Japan to become Vietnam's second-largest

export market of plastic products In the first 7 months of 2021, Vietnam’s top plastic product

export market was the US, which accounted for 36.8% of the total product export turnover,

reaching USD 1,01 billion, an increase of 93.4% over the same period in 2020 And in the

first 8 months of 2022, product export turnover reached 1,562 billion USD, which accounted

for 40.7% of Vietnam’s total export turnover When compared to the same time period in

2021, the export turnover increased by 31.9% Potential goods that could contribute to export

turnover include household plastic (export to the US market reached 71,3 million USD in

2020), plastic bags (reached 50,4 million USD), tarpaulin (reached 29,2 million USD),

builder’s ware of plastic (reached 23,2 million USD), plates, sheets, film (reached 22,9

million USD) and articles for the conveyance or packing of goods (reached 19,1 million

USD)

Although the US market has a large consumption capacity, Vietnam is still in the top

countries that are imported plastic from the US which shows the quality of goods as well as

opportunities of Vietnam In particular, APH realizes the importance of the US market in its

global strategy, so during 10 years of conquering the US market, APH has constantly strived

to provide quality products, and certified present itself in this potential market In addition,

APH has operating interests in all sectors that account for important parts of the export

turnover of plastic products to the US

Additionally, in the US, the plastic sector is crucial It is the third-largest manufacturing

Picture 1 Export turnover of plastic products in the US 2019 - 2020 - Vietnam Customs

Picture 2 Sectors' total revenue in two years 2020 and 2021 - Annual report of APH

industry and generated more than a million jobs in 2019 The highest number of employees in

the US plastics industry is in California, Ohio, Texas, and Michigan, with more than 70,000

people employed in each state At the state level, California's plastic industry workforce is the

largest, with an estimated 79,700 workers in 2019 Second, in terms of the workforce is Ohio

with 74,500 workers Texas comes in third with an estimate of 71,400 Indiana and Michigan

each estimated 16 plastic workers for every 1000 non-farm workers Additionally, shipments

by the US plastics industry generate more than 400 billion USD annually In 2021, the market

Picture 3: Market size of plastics and plastic pellets manufacturing industry in the US 2012 - 2022

(Unit: USD)

for producing plastic and plastic granules was estimated to be valued at 74 billion USD,

having slightly recovered from 2020 and the financial harm brought on by COVID-19 That

all shows the importance and necessity of the plastic industry in the US

The plastic industry's rapid development coexists with the issue of plastic waste The US is

likewise looking for a solution to this issue as a contemporary country leading green

consumer trends And as a result of this pressure, the bioplastics sector was established and

has continued to expand Of the more than 367 million tons of plastic produced annually, the

bioplastics market still accounts for less than one percent (according to World plastics

production 2020 and Plastics Europe 2021) The market for bioplastics, however, is still

expanding in contrast to the minor reduction in the global output of conventional plastic

Bioplastics market growth is mainly driven by increasing demand and the emergence of more

complex product applications Due to the rising demand for bio-based packaging in the food

and consumer products sectors, the US bioplastics market is among those that are anticipated

to expand significantly over the course of the projected year Bio bags and bioplastics have

higher tensile strength and are environmentally friendly so it is consequently anticipated that

the demand for bioplastics would grow over time This is also an advantage for APH when

producing bioplastic products is the way that APH wants to develop strongly in the US

market

b Attractiveness

About the market, the plastics market demand in the US was valued at USD 86,02 billion in

2021 The existence of the well-establish automotive, electronics, aerospace and defense

industries is what accounts for the high market share Besides, population growth is

correlated with rapid urbanization and industrialization has encouraged an increase in

spending on construction to satisfy expanding infrastructure needs which has led to an

increase in demand for builders’ ware of plastics Those elements play a significant role in

creating a wealth of chances for plastic companies that want to operate in the US

Regarding resources, the US is one of the leading countries in modern technology where

businesses can learn about advanced production technology that promotes the growth of the

plastic industry One of the US’s advanced technologies for the plastic industry is

nanotechnology It is in use to reinforce existing plastics Besides, it is “additive

manufacturing” also known as 3D printing, is used by numerous industries to quickly

develop minor designs It enables companies to make design changes before putting the

products on the market Next is “end-to-end tracking” Throughout a product's life cycle,

blockchain technology is perfect for ensuring the quality of the raw ingredients and finished

goods In addition, this technology can show the correct dosage; monitor and report on the

part production process; even deliver real-time data such as time, cost, waste, and standards

compliance Another technology that can solve the environmental problem, when plastic

waste is currently a global concern, is biopolymers also known as organic polymers While

ordinary polymers are made of synthetic compounds, making them very strong and

lightweight but at the expense of not being easily biodegradable, organic polymers do not

have that issue It is easily broken down into organic compounds that the environment is able

to absorb The US has become a target market for numerous plastic manufacturing companies

thanks to advancements in modern plastic production technology

Plastic is very important to the US economy According to the 2020 Size & Impact Report

from the Plastics Industry Association (PLASTICS), in 2019 the plastic industry in the US

accounted for USD 432 billion in goods and 1,003,000 in jobs Due to the industry's rapid

growth, employment in the sector rose as well, reaching an estimated 1.5 million people and

USD 549 billion in shipments (based on the most recent data from the prior year) The

increase in natural gas is one of the key factors contributing to the development of the

plastics industry in the US Access to affordable, reliable natural gas is ensuring profitability

and minimizes risk for the industry as a whole In many parts of the US, gas is vital to the

functioning of many industries And according to SPI, over the coming years, the plastics

market will continue to grow rapidly both domestically and globally, driven mostly by

greater use in transportation, healthcare, packing, and other industries The cost in the US for

the plastics sector has decreased due to the country's low cost of natural gas and oil in

comparison to other locations, making it a more competitive player in the global plastics

market

There is no denying the growth of the plastics industry in the US, but beyond the gains to the

economy, plastics also have a negative influence on the ecosystem and the environment in

which people live After California and Oregon, this is the third city in the US to impose a

ban on environmentally hazardous goods Therefore, in 2020, the US recently made progress

in reducing plastic waste when New York city’s rule prohibiting the use of single-use plastic

bags goes into force on March 1 Currently, the New York City government is also increasing

the propaganda for the new campaign, including using the keyword #BYOBagNY (using

eco-friendly bags) on social networks despite the fact that many shops have posted warnings

regarding the shift in consumer shopping habits

Besides, a recent executive order on the launch of a new program was also signed by

President Joe Biden that encouraged research and application of biotechnology This is

regarded as a reliable step for bio-based products to enter the biggest and most competitive

market in the world According to this law, the US government will enhance support for and

encourage enterprises to create product lines with biological origins to create job

opportunities for US workers Infrastructure development for the bioplastics sector, along