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| Paper industry enterprises face many difficulties from the general economic context. Photo: H.Diu |
Currently, although the paper industry in Vietnam has a favorable development trend, the weakness is the continuous trade deficit for many years. According to data from the General Department of Customs, in 2022, Vietnam spent nearly US$2.2 billion on importing paper and materials, while exports only reached US$1.9 billion, with a trade deficit of about US$300 million.
Moreover, Dang Van Son, Vice President and General Secretary of the Vietnam Pulp and Paper Association (VPPA) said that since September 2022, paper industry enterprises have faced many difficulties due to a decrease in orders, only working at about 50-60% capacity. This difficulty is expected to last until the end of 2023 when both domestic consumption and export decline. Moreover, Vietnam’s paper industry still faces many difficulties in competition such as dependence on imported raw materials and accessories with about 500,000 tons of pulp per year, raw export, so it is difficult to increase added value. According to this forecast, paper export turnover in 2023 may decrease compared to the result of 1 million tons of paper achieved in 2022.
The representative of VPPA also said that currently, about 90% of paper packaging products are made for consumption in the domestic market, so, facing the general difficulties of the economy, businesses must increase the export rate by approaching new export markets, and finding more ways to connect partners, sign export dynamic contracts.
At Vietnam Paper Corporation (VINAPACO), in 2022, this business will earn about VND 12 billion in profit, equaling 120% of the year plan and increasing 10 times compared to the previous year. In 2023, VINAPACO’s management determined that it would continue to face many challenges. It is expected that many paper factories in the world will come into operation while weak demand will cause pulp prices to decrease.
Therefore, this enterprise said that it will focus on investing in projects to renovate and upgrade the machinery and equipment systems of Bai Bang Paper Factory, the project to renovate the dynamic boiler at the Power Plant and the Song Duong Tissue paper Company to reduce costs and improve production and business efficiency.
Especially, VINAPACO will make an investment or joint venture with external units to invest in chip production equipment systems for export to Japanese partners after the woodchip sales contract is signed.
Similarly, Thai Nguyen Export Paper Joint Stock Company also said that it faced many difficulties due to fierce competition in the export market, high prices of some input materials.
But thanks to proactive solutions to capital, materials and input materials, the business still completed the set plans. In particular, to ensure product quality, the Company also focuses on investing in upgrading and maintaining machinery and equipment, and renovating the wastewater treatment system and protecting the environment.
Also to improve efficiency and competitiveness when exporting, Tetra Pak’s packaging factory in Binh Duong has invested in applying international and environmental standards, helping products to comply with strict standards and consistent quality in the production of sterilized paper boxes, not only serving the domestic market but also promoting exports to markets in ASEAN, Australia and New Zealand.
Along with the above solutions, the VPPA representative recommends that businesses need to approach niche markets by working with the Vietnam Trade Office in countries such as the Americas, the Middle East and through consumer goods associations, wholesale and retail associations in the host country. Businesses can also participate in trade fairs to effectively reach customers.
Along with trade promotion, according to businesses and management agencies, it is necessary to assist in removing internal difficulties such as encouraging investment in the production of raw materials and auxiliary materials, because there are currently no enterprises producing commercial pulp with a standard large tissue.
The good news is that by the end of 2023, the VNT-19 pulp mill in Quang Ngai will be put into trial operation. This factory is approved by the People’s Committee of Quang Ngai province with a capacity of 350,000 tons of pulp per year and an investment capital of about VND 10,000 billion. In addition, businesses also want to create favorable conditions in terms of loan interest rates, credit, human resource training, etc. to develop the paper industry according to international standards and technologies.