Given Vietnam’s rapid urbanization due to consistently strong economic growth over the past several years, solid waste has become a growing concern of virtually every Vietnamese city. In a recent national survey conducted by the Ministry of Natural Resources and Environment (MONRE), nearly 70 percent of Vietnamese municipalities identified solid waste management as one of their top environmental priorities. Important challenges in improving solid waste management include a lack of funding and equipment, lack of public awareness, inconsistent urban planning, and an insufficient legal framework. Further, technical capability for hazardous waste treatment is lacking.

Market Demand

Vietnam’s waste amounts to over 15 million metric tons each year, with municipal waste from households, restaurants, markets, and businesses sources accounting for over 80 percent of the total. For the most part, municipal waste is concentrated in urban areas, while industrial waste- concentrated in economic zones, industrial parks, and urban areas- accounts for much of the remainder. Hazardous waste from industries and hazardous healthcare waste from hospitals, while much smaller in terms of quantities, are also burning issues because they pose high health and environmental risks if not properly handled and disposed.

Given a growing population, rapid urbanization and increased consumption, municipal waste generation is expanding considerably. With this growth, it is anticipated that waste generation will increase to over 23 million metric tons by 2010, and that the types of waste produced will continue to undergo a change from more degradable to less degradable and more hazardous.

Industries are the second significant source of solid waste. Growth in hazardous-waste-intensive industries such as chemical products and electronic products is expected to increase the proportion of hazardous waste generated in Vietnam. There is an urgent need to establish industrial hazardous waste management systems, including both factory-based handling, treatment, and disposal systems, and centralized hazardous waste treatment facilities. Provincial government plans do exist for the development of several centralized facilities in the country, such as for the Le Minh Xuan industrial zone in Ho Chi Minh City and industrial zones in the heavily industrialized province of Dong Nai.

Waste handling in Vietnam, including collection, treatment and disposal 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 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, including landfills, has become a priority of the government. Due to the lack of financial resources the government is constructing most sanitary landfills with ODA funding.

Hazardous waste handling remains weak. Industrial hazardous waste treatment systems are largely inadequate. Given the lack of treatment facilities and limited incentives for safe disposal, many industries use a variety of unsafe methods of treatment and disposal, including allowing URENCOs to collect and dispose the hazardous waste with municipal waste, store hazardous waste onsite, sell to recyclers, or even dump indiscriminately.

Hazardous healthcare waste treatment capacity is expanding but is hindered by poor technical capacity. Vietnam has built 43 modern medical waste incinerators since 1997, bringing its total capacity for incineration of hazardous healthcare waste generated up by roughly 50 percent.

Recycling and reuse industries in Vietnam are driven by an informal network of waste pickers at landfills, informal waste collectors, and waste buyers. The market for recyclables has a large potential for expansion. Thirty two percent of the municipal waste currently placed in disposal sites in urban areas in Vietnam (2.1 million metric tons per year) consists of commercially recyclable materials such as paper, plastic, metal, and glass. It is estimated that approximately 20 percent of the municipal waste in Hanoi is recycled. According to World Bank consultants, there is potential to recycle at least two times this amount. For municipal waste, the government should consider subsidizing recycling and treatment facilities, as this will build up municipal capacity to recycle wastes, according to industry insiders. Ministry of Natural Resources and Environment (MONRE) Decision 03/2004, allowing for the import of waste as materials for domestic production, has facilitated the local recycling business to tap recyclable materials from the Southeast Asian region.

Although there have been no national studies on the amount of recycling of industrial waste currently taking place in Vietnam, individual case studies suggest that industrial waste recycling is widespread. At least 80% of non-hazardous industrial waste from steel, mechanical, chemicals/fertilizers, pulp and paper, textiles and food-processing industries is recyclable and the potential savings are high.

Market Data

Vietnam’s market for environmental and pollution control equipment and services was estimated to be over $600 million in 2008, with an annual growth rate of 10% - 15% over the next five years. Out of this total, the market for solid waste management is expected to be approximately US$ 100 million. The above figures are unofficial estimates based on total Official Development Assistance (ODA) funding of environmental projects underway and in the pipeline, as well as projects undertaken by urban and industrial entities. With regard to investment in the sector, the World Bank, MONRE and the Canadian International Development Agency (CIDA) estimate investment levels required to meet the 2010 and 2020 solid waste management targets.

• Projected investment needed for municipal waste management assumes that (1) municipal waste generation will be 21 million tons in 2010 and 42 million tons in 2020; (2) 30% of solid waste will be separated at the source, and 90% will be collected in 2010 and 2020; (3) average capital investment for treatment will be about $94.1/ton, based on investment trends from 1999-2003.
• Projected investment needed for industrial waste management assumes that (1) industrial waste generation will be 2.76 million tons in 2010 and 9.66 million tons in 2020; (2) 100% of new enterprises will have waste treatment facilities by 2010; (3) the overall industrial waste treatment rate will be 80% by 2010; (4) 20% of collected waste will be reused/recycled by 2010 and 30% by 2020; (5) average capital investment for treatment is about $29.4/ton.
• Projected investment needed for medical waste management assumes that (1) medical waste generation will be 19,000 tons in 2010 and 22,000 tons in 2020; (2) 100% of medical waste is targeted for treatment by 2010; (3) average capital investment for treatment is about $823.5/ton.

 Best Prospects

Given that ODA is the major source of financing for most of Vietnam’s environmental projects in general, and solid waste projects in particular, the best sale prospects for marketing imported products and services are associated with ODA funded projects. The two largest donors in this field are the World Bank (WB) and Asian Development Bank (ADB). The ADB leads the group of multilateral donors with a commitment of US$1.35 billion for all portfolios in Vietnam in 2008. The ADB is followed by the WB which has committed US$1.1 billion in 2008. Whether funded multilaterally or bilaterally, projects funded by ODA offer numerous opportunities for foreign equipment suppliers, engineering and consulting firms.

Local production of environmental equipment does not meet market demand, especially the requirements of ODA funded projects. Vietnam has to import several waste treatment equipment and technologies including landfill equipment, incinerators, and composting technologies. To date, most incinerators have been imported from Belgium, Austria, Switzerland, U.K., Spain, and South Africa. Existing incineration facilities are used to treat medical waste, not industrial waste. Composting technologies are mainly imported from Spain, Holland, and the United States. Currently, Vietnam lacks the capability to produce lab equipment that could be used to analyze hazardous/toxic compound samples

Key Suppliers

ODA projects funded by World Bank or the Asian Development Bank in Vietnam’s larger cities, including Hai Phong, Da Nang, Quang Ninh, and Ho Chi Minh, offer significant opportunities for U.S. companies to participate in the international competitive bidding process to supply consulting or equipment for solid waste projects. A number of countries also apply portions of their bilateral development assistance programs to the environmental sector. Typically, companies from the donor countries have a distinct advantage in gaining work on these projects. Over the last three years in this sector, Denmark, the Netherlands, Japan, and France have been the most active countries in financing bilateral aid projects or co-financing multilateral projects. Companies from these countries typically win these contracts.

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Excerpts from Vietnam: Solid Waste Management, December 2008, U.S. Commercial Service http://www.export.gov