Vietnam White Spirits Market Outlook to 2030

Vietnam White Spirits Market Overview

• The Vietnam White Spirits market has seen significant growth, as evidenced by the Global White Spirits market reaching a valuation of USD 7.5 billion in 2023. This growth is primarily driven by the increasing demand from the paint and coating industry, coupled with rising construction activities and expanding industrial applications. The market's upward trajectory highlights its critical role in supporting these sectors.
• The market is dominated by key players such as Shell Vietnam Ltd., Total Vietnam, Nippon Paint Vietnam, and Petrolimex. These companies stand out for their extensive distribution networks, high-quality products, and continuous innovation, particularly in producing environmentally friendly white spirits. Their leadership in the market is reinforced by their ability to meet diverse industry needs.
• Cities like Ho Chi Minh City and Binh Duong are at the forefront of the white spirits market in Vietnam, owing to their status as major industrial and economic hubs. These cities have experienced rapid urbanization and significant infrastructure development, which has fueled the demand for white spirits across various applications. This demand is particularly strong in the construction and manufacturing sectors, where white spirits are essential for numerous processes.

Vietnam White Spirits Market Segmentation

The Vietnam White Spirits Market can be segmented by various factors like Product Type, Application, and Region.

By Product Type: The market is segmented by Product Type into Type 1 (Regular), Type 2 (Low Aromatic), and Type 3 (High Aromatic). In 2023, Type 2 (Low Aromatic) is preferred for its lower environmental impact, dominating due to widespread use in environmentally sensitive applications. These applications often include areas where stringent environmental regulations are in place, making Type 2 more viable and compliant choice for many industries.

By Application: The market is further segmented by application into Paints & Coatings and Cleaning Degreasing. In 2023, Paints & Coatings dominate due to extensive use in the construction industry, driven by increased infrastructural projects and urban development. The superior solvent properties of white spirits make them ideal for creating smooth and durable finishes in paints and coatings, which are essential for both residential and commercial buildings.

By Region: The market is divided into North, South, East, and West. In 2023, the South region led the market, driven by extensive industrial activities and rapid urbanization. The region's strong economic growth, supported by significant investments in infrastructure and manufacturing, has resulted in a high demand for white spirits across various sectors.

Vietnam White Spirits Market Competitive Landscape

• In 2023, Shell Vietnam launched a new line of eco-friendly white spirits designed for industrial applications, particularly in the paints and coatings sector.The new formulations are designed to reduce VOC emissions by 20%, contributing to cleaner air quality and supporting the Vietnamese government's environmental goals.
• In 2023, Nippon Paint Vietnam enhanced its supply chain efficiency and strengthened its distribution network, particularly in key regions like Ho Chi Minh City. This strategic effort aimed to better meet the growing demand across sectors such as maritime, construction, and automotive industries, ensuring the timely delivery of high-quality protective coatings throughout the country.

Vietnam White Spirits Industry Analysis

Vietnam White Spirits Market Growth Drivers

• Growth in Industrial Applications: The industrial sector in Vietnam is experiencing robust growth, particularly in manufacturing and automotive industries, which are major consumers of white spirits for cleaning and degreasing purposes. In July 2024, Vietnam's industrial production increased by 11.2% year-on-year, with manufacturing production specifically rising by 12.6%. This marked the strongest growth since January 2024.
• Revival of Construction and Industrial Sectors: In 2023, the construction sector saw a substantial influx of foreign direct investment (FDI), with the residential construction segment capturing the largest share. Total FDI inflows into the construction industry were estimated at approximately $3.5 billion. This revival in construction, coupled with increased industrial production, has boosted the demand for white spirits, especially in applications like paints, coatings, and cleaning agents, thereby contributing to the overall growth of the market.
• Rising Demand from the Paints and Coatings Industry: The use of white spirit as a solvent in paint formulations is a significant growth driver. It enhances the application and drying properties of paints and coatings, making it highly sought after. This demand is particularly strong in the residential and construction sectors, where ongoing renovation and building projects often require high-quality, durable paint finishes.

Vietnam White Spirits Market Challenges

• Regulatory Compliance and Environmental Concerns: The white spirits market is increasingly challenged by stringent environmental regulations aimed at reducing harmful emissions. In 2021, the Vietnamese government implemented new regulations that specifically target volatile organic compound (VOC) emissions, which have significant implications for the production processes and applications of traditional white spirits. Manufacturers now face the dual challenge of complying with these regulations while maintaining their production efficiency and market competitiveness.
• Competition from Alternative Solvents: The rise in demand for eco-friendly and bio-based solvents is significantly impacting the traditional white spirits market. In Vietnam, there is a noticeable shift towards alternatives such as ethanol and propylene glycol, which are increasingly recognized for their lower environmental footprint and reduced health risks. As consumers and industries prioritize sustainability, the market is witnessing a growing availability of these alternatives, making it challenging for traditional white spirits to compete.

Vietnam White Spirits Market Government Initiatives

• National Strategy for Industrial Development (2021-2025): Under the Vietnamese government's National Strategy for Industrial Development, the manufacturing sector's contribution to GDP saw significant growth in 2023, reaching 22%. This growth directly stimulated demand for white spirits in industrial applications such as paints and coatings, contributing to a 12% increase in white spirits consumption that year.
• Environmental Protection Law (2020): The Environmental Protection Law, enacted in 2020, had a significant impact on the white spirits market by 2023. The law led to a 10% reduction in VOC emissions from the production of white spirits as companies adopted more sustainable practices to comply with stricter environmental regulations. This reduction enhanced the market's appeal to environmentally conscious industries.

Vietnam White Spirits Future Market Outlook

By 2028, the Vietnam white spirits market is expected to experience substantial growth, driven by key factors such as increasing construction activities, rising demand in the paints and coatings industry, and expanding industrial applications.

Future Trends

• Increased Use in Hospitality and Retail Sectors: By 2028, the hospitality and retail sectors in Vietnam are anticipated to see a growing demand for white spirits, particularly for cleaning and maintenance purposes. As the tourism industry expands and retail spaces proliferate, white spirits will become a preferred choice for surface cleaning, sanitization, and maintenance of commercial premises due to their effectiveness and versatility.
• Rising Adoption in Commercial Painting and Coating Services: The demand for white spirits in commercial painting and coating services is expected to grow steadily in Vietnam by 2028. As commercial infrastructure projects, including office buildings, shopping malls, and hotels, continue to increase, white spirits will be extensively used as a solvent in paints and coatings, ensuring smoother application and quicker drying times, thereby enhancing the overall efficiency of these services.