Vietnam Paper output grows stronger each year


Vietnam Paper output grows stronger each year

Vietnam’s GDP growth rate has increased continuously year-on-year since the Asian economic crisis. GDP growth reached 4.8% in 1999, 6.7% in 2000 and could even rise to 7.2% in 2001. As for the paper industry, average growth of 12% is expected this year with small and medium-sized mills growing faster than the larger units. Local producers are managing to keep up with domestic demand for newsprint, writing/printing paper and some low quality grades, but Vietnam must import large quantities of kraftliner, coated products and cement bag paper.

Turning to investments, the government’s crackdown on environmental issues may have put many mills off investing in new pulp projects. As a result, companies will be forced to rely on imported market pulp and recovered paper. Viet-Tri, for example, will have to sustain its output of kraftliner and coated wrapping paper by importing raw material. Tan-Mai is in the same boat, anticipating a shortage when its new 20,000 tonne/yr DIP line eventually starts up. Other companies affected by the new policy include Toyo International, which needs to source materials for its tissue production and Cau-Duong with its proposed 10,000 tonnes/yr of tissue output.

Vietnam still has two long term pulp and paper projects in the pipeline due for completion by 2005. Firstly, Vietnam Paper Corporation (Vinapimex) plans to build a 130,000 tonne/yr bleached kraft pulp mill in Kontum. The company lacks the capital to buy the land for the mill and plantation areas, and the plant’s startup has been postponed from 2002 to 2005, or later. Vinapimex also aims to increase packaging capacity at the Thanh Hoa mill by 50,000 tonnes/yr, but this project has been delayed as well. The investment at Thanh Hoa was originally scheduled to proceed one or two years after the startup of the Kontum pulp line.

The second large project is at the Bai-Bang mill. The company has signed contracts with Voith Paper and China’s Sinochem to rebuild PMs 1 and 2. The mill plans to boost paper capacity from 55,000 tonnes/yr to 100,000 tonnes/yr. The site’s pulp capacity is also set to rise from 48,000 tonnes/yr to 61,000 tonnes/yr. The $50 million upgrade was originally due for completion in late 1999, but is now expected to take place at the end of 2001.


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