Paper trail Vietnam pulp industry challenge

09:05 | 19/04/2019 Industry

(VEN) - Vietnam should treat recyclable paper as an important source of raw material for the paper manufacturing industry, rather than as waste. This was one of the solutions put forth at a recent Hanoi seminar on ways to promote sustainable development of the Vietnamese paper industry. 

paper trail vietnam pulp industry challenge
The paper sector has achieved a rapid growth rate

Dependence on imports

According to the Vietnam Pulp and Paper Association (VPPA), the Vietnamese paper sector grew an average 10-12 percent annually in recent years, with the packaging segment growing 15-17 percent per year. Packaging production facilities with annual capacity of 400,000-500,000 tonnes have been put into operation. Some companies plan to invest in projects with annual capacity amounting to one million tonnes. The paper industry contributes about 1.5 percent to Vietnam’s gross domestic product and its annual export value has exceeded US$1 billion.

However, the imbalance of production structure and capacity is one of many challenges facing the industry. Specifically, the state still lacks appropriate policies to stimulate paper industry development; domestic products have to compete fiercely with foreign products in both home and export markets; input costs keep increasing; and the expansion of digital communications has led to a decline in the demand for printing paper. Due to these difficulties, domestic paper companies are hard pressed to expand production and enhance competitiveness.

A VPPA report shows that in 2018, the domestic paper sector exported 641,000 tonnes, double the 2017 figure, but it also had to import more than 1.4 million tonnes.

According to VPPA Vice President Hoang Trung Son, the Vietnamese paper market still has many gaps, especially in the segment of high-grade packaging products. Its competitiveness is also lower compare with the paper markets of other countries in the region due to small-scale production and outdated technology and equipment. “The domestic paper sector is not protected because the import tax applied to most kinds of paper is zero percent. The recovered (waste) paper market still depends heavily on the situation and policies of China,” Son said.

Green industry

To help the paper sector overcome these difficulties, in Son’s opinion, the state should consider paper production and recycling as a green and environment-friendly industry because its material resources are renewable by planting forest trees; 100 percent of used products can be recycled; and waste from paper production can be treated thoroughly to protect the environment. “Appropriate state policies are needed to encourage the collection and recycling of waste paper. A law on recycling and efficient use of natural resources should be promulgated as soon as possible. Recovered paper should be considered as material for production,” Son said.

The paper sector still lacks a strategy to promote its development while investment projects are not under state management, leading to the imbalance of product structure and production capacity.

Therefore, VPPA highlighted the need to build a development strategy for the Vietnamese paper sector in the 2020-2025 period, with a vision towards 2045. At the same time, foreign investment is required in high technology projects, especially those manufacturing products that cannot be made domestically.

In 2019, paper and board sales are forecast to grow about 12 percent; the export of paper and paper products to

grow 35 percent and reach US$1.45 billion.

Lan Anh