VIETNAM – Domestic paper consumption is expected to hit 3 million tonnes this year, way above the local paper production capacity of 2.18 million tonnes, according to the Ministry of Industry and Trade (MoIT), which wants to cut the country’s costly dependency on paper imports.
While the Vietnamese paper industry produced 860,000 tonnes of paper in the first five months of this year – a 5% increase year on year – and exports have also risen by about 15% to reach nearly 70,000 tonnes, MoIT figures indicate that paper imports have also been up over the past few months.
For the first six months of this year, Vietnam’s paper imports rose 114% year on year to 691,000 tonnes with a total value of YS$640 million, with supply coming mainly from Indonesia, Taiwan and Singapore.
In June 2013 alone, Vietnam imported about 130,000 tonnes of paper, costing the country US$114 million.
This high import cost to Vietnam can be reduced, said MoIT, if domestic paper companies invest in new production lines.
While acknowledging that the current local economic problems have been tough on the local paper industry, the ministry said the sector still has potential for development.
The Vietnam Paper Association has rejected MoIT’s comments and said local pulp production has seen relatively high growth.
Association general secretary Vu Ngoc Bao said several domestic companies have invested in modern production lines, and pulp production last year reached 484,300 tonnes, an increase of 30% over 2011. Several foreign companies have also launched projects to produce pulp in Vietnam in the first six months of this year alone.
He acknowledged though, that this only met half of local paper demand. Bao said the industry lacks pulp and has to import it at a cost of US$900-US$1,000 per tonne.
Vietnam has ranked first in the world for exporting woodchips (used in pulp production) over the last two years. Last year, the country exported 6 million tonnes of woodchips which could produce 2.7 million tonnes of pulp for the lower price of US$110-US$120 per tonne.