However, if we aren’t active in material areas, Vietnam paper industry will be struggling to compete with imported goods.

According to Vietnam Paper and Pulp Association, production situation of the paper industry for the first months of 2018 is quite stable, mainly due to the initiative and flexibility in production. Specifically, in the first four months of 2018, the paper industry produced 1,181,815 tons of paper of all kinds, increases 60% over the same period in 2017, thanks to the factory with a large capacity, strong operation from the fourth quarter / 2017 to the beginning of quarter II / 2018.

However, for the production and consumption in the domestic market and for export, in the first four months of 2018, Vietnam paper industry imported 465,000 tons of raw materials, an increase of 5% over the same period in 2017.

The thing is that on the market, prices of all types of paper are tending to increase, the increase has no sign of stopping because the price of pulp and chemicals used in the paper industry has increased. Moreover, from the end of 2017 till now, enterprises in the industry are competed by Chinese enterprises in buying raw materials and finished paper.

As paper production in China is being reduced by the selectivity of the project to ensure environmental protection, the supply of the paper industry is in a state of stress. Enterprises forecast that prices of raw materials and imported paper will increase in the coming time.

At present, the paper industry is in the peak stage of preparation for production to meet the demand for new school year and business activities in the last months of the year. In addition, the demand for packaging has also increased as manufacturing activity of the developed industries has created opportunities for carton industry, resulting in increased demand for raw materials.

In 2017, Vietnam imported paper and paper products at about $ 2.5 billion, of which imports from China is over $ 600 million. The Chinese enterprises purchasing raw materials and finished paper also pushed the export turnover of the industry up dramatically. In the first four months of 2018, the paper industry exported 187,056 tons of paper, increasing 400% over the same period of 2017 (only 47,350 tons in the first 4 months of 2017).

According to the paper enterprises, most of the reasons are because enterprises have not been able to take advantage of the pulp as there is not enough pulp production line from raw material wood. To meet the current demand, most enterprises have to export raw materials to other countries and re-import the pulp. In addition, the source of raw wood, though supplemented with plantation types, is still inadequate, and has to be "shared" with the wood processing industry.

According to representatives of Tan Mai Group, investing in paper factories is an effort of paper enterprises to compete with foreign ones in the domestic market. However, this also depends on the financial capacity of each enterprise. For example, in Tan Mai, in 2018 and 2019, the enterprise is promoting and will promote the investment in a packaging paper factory with a capacity of 200,000 tons per year in Long Thanh (Dong Nai) and pulp factory in Kon Tum after the factory project in Quang Ngai was canceled due to ground problems.

Tan Mai is managing, caring and planting in many areas such as Dak Lak, Dak Nong, Lam Dong, South East, Quang Ngai and Kon Tum with a total area of ​​31,105ha. In 2017, Tan Mai planted 542.36 ha and the goal in 2018 is to plant additionally 1,187 ha.

Although self-reliant in production, business and afforestation, enterprises still know that developing the wood material and production areas need the support from policy and technology in production to ensure supplying high quality products and protecting environment. Besides, the cooperation between the people and enterprises, and enterprises themselves in the industry must be linked together to be able to compete with foreign ones

Because the paper of the foreign brands has superior quality than the paper produced in the country that it is selected by consumers. In addition, paper brands in countries such as Thailand, Indonesia, Japan are imported into Vietnam more and more, putting domestic paper industry under pressure. If not be invested soon, Vietnam paper industry will be difficult to develop and compete with foreign enterprises.

Source:  DNSG