Paper industry enterprises boost export
Currently, despite the favorable development trend of the paper industry in Vietnam, a weakness is the continuous trade deficit over the past several years.
Domestic paper production has nearly doubled in the past five years, reaching approximately 10 million tons/year. However, along with the general difficulties of many industries, the paper industry faces declining orders, so businesses must step up trade promotion activities.
According to data from the General Department of Customs, in 2022, Vietnam will spend nearly 2.2 billion USD on importing paper and raw materials, while exports will only reach 1.9 billion USD, with a trade deficit of about 300 million USD.
Paper industry enterprises face many difficulties from the general economic context.
Furthermore, Mr. Dang Van Son, Vice Chairman and Secretary-General of the Vietnam Pulp and Paper Association (VPPA), mentioned that since September 2022 until now, paper industry enterprises have faced significant challenges due to a decline in orders, operating at only around 50-60% of capacity. This difficulty is expected to persist until the end of 2023 as domestic and export consumption both decrease. Additionally, the Vietnamese paper industry encounters challenges related to competition, such as dependence on imported raw materials, approximately 500,000 tons of pulp annually, and raw paper exports, making it challenging to increase value-added significantly. Therefore, he forecasts that the paper export turnover in 2023 may decrease compared to the achieved result of one million tons in 2022.
The representative of VPPA also mentioned that currently, approximately 90% of paper packaging products are consumed in the domestic market. Therefore, facing the common challenges of the economy, businesses need to increase the export proportion by approaching new export markets, seeking additional methods to connect with partners, and engaging in collaborative export agreements.
In 2022, the Vietnam Paper Corporation (VINAPACO) achieved a profit of approximately 12 billion VND, equivalent to 120% of the annual plan and a tenfold increase compared to the previous year. For the year 2023, the leadership of VINAPACO acknowledges that they will continue to face numerous challenges. They anticipate that many paper manufacturing plants worldwide will become operational, potentially decreasing paper pulp prices due to weak demand.
Therefore, the company stated that it will focus on investing in projects to renovate and upgrade Bai Bang Paper Mill’s machinery and equipment systems, the project to upgrade the power boiler at the Power Plant, and Tissue Paper Company Song Duong. This initiative aims to reduce costs and enhance production and business efficiency. Particularly, VINAPACO plans to invest or enter into joint ventures with external entities to invest in equipment systems to produce wood chips for export to Japanese partners after the wood chip purchase contracts are signed.
Similarly, the Thai Nguyen Export Paper Joint Stock Company also reported difficulties due to intense competition in the export market and the increased prices of certain input materials. However, thanks to proactive solutions in terms of capital, supplies, and raw materials, the company was able to fulfill its outlined plans. In particular, to ensure product quality, the company also focuses on upgrading and maintaining machinery and equipment and renovating wastewater treatment systems to protect the environment.
In order to enhance efficiency and competitive capabilities in export, Tetra Pak’s packaging manufacturing plant in Binh Duong has invested in and applied international standards and environmental practices. This investment has helped ensure strict compliance and consistent quality in the production process of sterilized paper box shells. This serves the domestic market and promotes exports to ASEAN markets, Australia, and New Zealand.
Along with the mentioned solutions, VPPA representatives recommend that businesses explore niche markets by collaborating with the Vietnam Trade Office in countries such as the Americas and the Middle East. They also suggest engaging with consumer associations and wholesale/retail associations in respective countries to facilitate business connections. Participating in trade fairs and exhibitions is another avenue for businesses to reach potential customers effectively.
Alongside trade promotion, according to businesses, regulatory authorities should support the resolution of internal difficulties, such as encouraging investment in the production of raw materials. Currently, there is still no large-scale production of commercial paper pulp. Encouragingly, by the end of 2023, the VNT-19 Paper Pulp Plant in Quang Ngai is expected to undergo trial operations. This plant has been approved by the Quang Ngai Provincial People’s Committee with an investment plan for a designed capacity of 350,000 tons of paper pulp per year and an investment capital of approximately 10,000 billion VND. In addition, businesses also desire favorable conditions regarding interest rates for capital loans, credit, workforce training, etc., to develop the paper industry according to international standards and technologies.
According to the Hai Quan News
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