Although it is not one of the key industries, products of the paper industry such as pulp, printing paper, and tissue are essential products. In recent years, the paper industry in Vietnam has experienced strong growth through the application of advanced technology, and strict compliance with requirements for environmentally friendly products.
The strong development of digital media has led to a decrease in the demand for newsprint, but also brought about strong growth in the segment of packaging paper and paper boxes. In addition, in recent years, Vietnam’s high export growth has also led to a sharp increase in the demand for packaging paper, especially for industries with a high proportion of exports including textiles, footwear, seafood, components, and electronic equipment.
Statistics shows that, in recent years, Vietnam's paper industry has had an average growth rate of about 10-12%/year. That of packaging paper in particular is about 15-17%/year with large capacity investment projects. With a strong increase in demand and diverse roles in the economy, the paper industry contributes about 1.5% of GDP, and its export turnover reaches over 1 billion USD.
According to the Vietnam Pulp and Paper Association (VPPA), in 2019, domestic consumption of paper packaging was estimated at 4.2 million tons. In the last 3 years, Vietnam's paper export has always achieved an impressive growth rate of over 200%/year. In the first 7 months of 2020, the total output of paper production is estimated at more than 2.79 million tons, up 12.2%.
Due to the impact of the Covid-19 epidemic and social distancing measures, socio-economic activities were disrupted, affecting the consumption of the economy in general and the paper industry in particular.
The total export turnover of paper in the first seven months of 2020 reached 933.2 thousand tons, up 100.6%, compared to the same period in 2019. Exports of packaging paper and tissue paper grew strongly, while printing and writing paper grew fell.
Currently, Vietnam exports packaging paper to 33 countries and 5 continents, of which Asia accounts for the largest proportion (98.9%), followed by Africa (0.5%), Australia (0.4%), Europe America and Europe accounted for 0.2%.
The total volume of imported paper in the first 7 months of 2020 reached more than 1.11 million tons, down 1.5% over the same period in 2019.
It can be seen that Vietnam’s paper industry is currently considered as an industry with many opportunities and room for development. Survey results show that Vietnam's average paper consumption is currently very low, reaching 50.7kg/person/year, compared with the world's average consumption of 70kg/person/year. Therefore, the demand for paper of all kinds in Vietnam is still quite large. There still exist many gaps in Vietnam's paper market, especially in the segment of high-grade packaging paper products (coated).
In addition, participation in many free trade agreements, especially the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to bring great export opportunities for Vietnam's paper and packaging industry. Moreover, Vietnam is one of countries that benefit from supply chain shifts from China and some other countries. New development and investment in expansion of commodity production facilities in Vietnam will boost consumption growth for the paper industry, especially packaging paper for canning for export goods.
The promotion of public investment and capital disbursement as well as the Government's policies to stimulate domestic consumption will lead to growth in consumption of packaging, printing, writing and tissue paper. This is also a great advantage for the development of the paper industry in the coming time.
Last but not least, Vietnam has an abundant source of wood chips - raw materials for pulp production and low labor costs. This will also create more positive advantages for the paper industry to experience a strong and sustainable development in the future.
Compiled by VietnamCredit