A paper production company earns 1.5 trillion dongs in profit
The Vietnam Paper and Pulp Association chairman said that the profit from paper pulp production is high, but Vietnam has to import and only has two manufacturing companies.
On March 28th, Minh Vi Exhibition Company, the Chemical Department, the Vietnam Paper and Pulp Association, the Vietnam Ink and Paint Association, and the Ho Chi Minh City Plastic and Rubber Association… organized a seminar to connect values towards sustainable development; announced 4 international trade fairs specializing in paint, paper, rubber, and plastic will take place at the Saigon Exhibition and Convention Center from June 14 to June 16.
Mr. Dang Van Son, Vice Chairman of the Vietnam Pulp and Paper Association, said that the paper industry had developed remarkably in the past five years, with nearly 10 million tons per year, making it one of the largest manufacturing capacities in Southeast Asia and Asia.
From September 2022 until now, the paper industry has faced many difficulties due to decreased orders, causing production enterprises to operate at only 50-60% capacity. It is forecasted that 2023 will be even more challenging as domestic consumption and exports are expected to decrease.
Moreover, the paper industry faces disadvantageous competition with foreign-invested enterprises at home due to the need to borrow from commercial banks at high medium-term interest rates.
At the same time, one of the most critical raw materials in paper packaging production is waste paper. Still, Vietnam has no policy to encourage investment and recycling collection.
The leaders of the Vietnam Pulp and Paper Association share information
Another major challenge for the Vietnamese paper industry, according to Mr. Son, is that companies are exporting raw materials, so they do not have a competitive advantage.
In particular, wood chips – the raw material for paper and pulp production in Vietnam, are abundant. Companies export wood chips at low prices each year while importing pulp at much higher prices.
For example, in 2022, Vietnam exported 15 million tons of dry wood chips for 2,000,000 VND/ton while importing 500,000 tons of pulp for 20,000,000 VND/ton, including VAT.
This shows that the profits from pulp production are high, but Vietnam has to import and only has two pulp-producing companies.
Especially this year, pulp producers have made enormous profits due to the high raw materials prices in the US and Europe. Therefore, a pulp-producing company has earned a profit of 1,500 billion VND.
According to Mr. Son, two tons of dry wood chips can produce one million tons of pulp. The profits would be very high if 15 million tons of wood chips were used to produce 7 million tons of pulp.
“The enterprises suffer losses when only doing outsourcing while having the advantage of abundant raw materials,” Mr. Son said.
In the face of these challenges, Mr. Son proposed that the paper industry urge the government to quickly encourage investment in paper pulp production to take advantage of the abundant raw materials.
There should be policies to encourage investment in domestic paper waste recycling. In particular, the role of the government is needed to solve the problem, reduce the import of waste from foreign countries, and give enterprises a competitive advantage.
In addition, businesses are advised to limit investment in common packaging paper because the supply has exceeded demand, and is currently seeking export opportunities to other countries.
“Vietnam imports $2 billion worth of high-end paper each year. Therefore, investment in high-end paper production should be encouraged,” he said.
With over 13 years of operation in the paper packaging industry and built a reputation for its brand in the market, Hoang Vuong Paper Packaging Company is proud to be a private packaging enterprise in Vietnam that has accompanied many large domestic brands and internationally.
- Address: 10/6C 10th Street, Binh Hung Hoa A Ward, Binh Tan District, Ho Chi Minh City
- Phone number: 0908.863.965 (Mr. Le Hong Son)
- Phone: 028.62696129 – 028.22481926
- Fax: 08.62696032
- E-mail: email@example.com
- Website: www.hopcungcaocap.vn
- Fanpage: Hoang Vuong Paper Packaging Co., Ltd