|A worker operates a paper producing line at Bai Bang Paper Company. The industry currently faces a domestic production surplus, made worse by fierce competition from imported products. — VNA/VNS Photo Hoang Hung
HA NOI (VNS)— The paper industry currently faces a domestic production surplus, made worse by fierce competition with imported products.
Last year's paper exports to 18 countries, mostly to the US, Taiwan and Japan, were estimated at US$425 million, one-third of the value of paper imports for domestic use, according to Viet Nam Pulp and Paper Association (VPPA) Secretary General Vu Ngoc Bao.
Although domestic production of pulp jumped remarkably from 345,000 tonnes in 2010 to 484,300 tonnes in 2012, this satisfied only half of the local demand.
Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Products Association (Vietfores) said that wood chip exports have also increased sharply over the last decade.
In 2001, the country exported 400,000 tonnes of wood chips; the figure had soared to 5.4 million tonnes one decade later. Viet Nam is currently the largest wood chip exporter in the world.
But this fact has caused worry rather than joy. Increasing exports put more pressure on the paper industry, which has been crying about material shortages for years.
While raw material imports remained necessary for pulp production purposes, the industry continued exporting large amounts of domestic material at low prices. For example, China purchased wood chips at the low price of $110-120 per tonne and used them to produce and resell pulp for around $900-1,000 per tonne.
To deal with the shortage of materials, Viet Nam has concentrated on recycling used paper. The country is collecting 70 per cent of waste paper for recycling.
Nearly 100 per cent of packaging paper, 90 per cent of tissues and 60 per cent of newspapers in Viet Nam are now made from recycled paper.
In 2013, the paper industry may well find it difficult to locate outlets for its products as the economic recession has led to stockpiles of paper. According to statistics from the Ministry of Industry and Trade, the amount of paper in stock increased by 33.7 per cent in the first two months of this year compared to the same period two years ago.
General director of the Viet Nam Paper Corporation Vu Thanh Binh said most member companies have seen production, sales and profits plunge.
Due to the decline in paper consumption, some domestic producers have had to reduce or even stop their operations to minimise their stock holdings, according to VPPA Secretary General Bao.
The Ministry predicted that total paper output will reach 2.18 million tonnes in 2013, 17.7 per cent more than last year. — VNS