Vietnam’s paper industry grows despite epidemic

09:28 | 06/04/2020 Industry

(VEN) - While different industries are strongly affected by the Covid-19 epidemic, the paper industry is still relatively “safe”. Although it encountered difficulties in the import of raw and auxiliary materials, production and exports are actually growing.  

vietnams paper industry grows despite epidemic
Businesses need to keep eye on the epidemic and market developments to maintain production

According to the Vietnam Pulp and Paper Association (VPPA), in the first two months of 2020, paper production reached 687,570 tonnes, up 11.8 percent from the same period in 2019, paper sales hit 837,855 tonnes, up 9.8 percent, paper imports were 327,474 tonnes, up 11.9 percent, and exports reached 167,684 tonnes, up 26.3 percent. The price of domestically made paper products in February 2020 is almost unchanged compared to the previous month.

A VPPA representative said that in February 2020, the Covid-19 epidemic had both positive and negative impacts on the paper industry. Imports from China account for a small percentage of the industry’s imports so the epidemic just slightly affected the industry’s raw materials.

However, paper enterprises import about 75 percent of additives, chemicals and auxiliary products they need from China and the outbreak caused them to shift to purchasing those materials from the Republic of Korea (RoK) and India. Since the epidemic expanded in the RoK, they have mainly imported additives, chemicals and auxiliary products from India. On the other hand, China is short of packaging paper, and Vietnamese paper enterprises are increasing packaging paper exports to China.

In January and February 2020, the paper industry experienced a high growth in all of its segments. While packaging paper exports to China increased 25 percent, domestic sales of packaging paper dropped due to falling demand for farm produce, seafood, garment, electronics and other industries as a consequence of the Covid-19 outbreak. Meanwhile, online sales of packaging paper have increased.

According to the VPPA, if the Covid-19 epidemic lasts long, paper production, foreign trade, labor force, investment, and machinery and equipment will eventually be affected, and many Chinese specialists won’t be able to go to Vietnam for the industry’s investment projects.

Poor foreign trade and domestic sales as a consequence of the economic downturn will likely increase inventories and cause pressure on enterprises, especially packaging paper producers that account for more than 80 percent of the industry’s production capacity.

Economists say Vietnamese paper mills should keep eye on epidemic prevention and market developments to maintain production and make their product price more reasonable, and ensure sufficient domestic supply of paper products.

According to the Vietnam Pulp and Paper Association (VPPA), in March 2020, all segments of paper industry production grew 2-5 percent compared to February 2020, including packaging paper, printing paper, writing paper, tissue paper specifically designed for mask production, and paper for medical use.

Duc Anh