From the beginning of 2021 until now, Vietnam’s export of paper and paper products has always been at a high level compared to the same period in 2020, this is the result of the increased production capacity of the paper industry, along with the consumption demand of paper and paper products in the country as well as the world increased, especially packaging paper.
According to the assessment, Vietnam’s packaging paper exports will continue to increase in the coming time thanks to the following factors:
Firstly, the production capacity of packaging paper increases
According to statistics from the Vietnam Pulp and Paper Association (VPPA), between the end of 2020 and the beginning of 2021, there will be 8 industrial packaging paper factories put into operation with a total design capacity of about 1.4 million tons/year.
Accordingly, by the end of 2020 with a capacity of about 800,000 tons by enterprises: Marubeni Group 450,000 tons/year, Khoi Nguyen Paper One Member Limited Company 120,000 tons/year, Phat Dat Paper Production and Trading Company Limited 100,000 tons/year. Annually, Global General Trading Production Co., Ltd. 80,000 tons/year and Tan Huy Kiet Trading Co., Ltd. 50,000 tons/year.
These paper production lines will operate at close to their designed capacity in 2021 and will add more than 700,000 tons of paper to the market.
In 2021, it is expected that a number of other lines will be put into operation with a total design capacity of about 600,000 tons/year; in which, Miza Joint Stock Company will operate the line 120,000 tons/year, Hung Ha Paper Company Limited 100,000 tons/year, Hoang Van Thu Paper Joint Stock Company 100,000 tons/year, Viet Tri Paper Joint Stock Company 150,000 tons/year, other units about 100,000 tons/year.
Second, the demand for packaging paper increases
Paper packaging consumption in Vietnam is expected to increase by 12% in the period 2021-2025 thanks to the continuing urbanization rate. SSI Securities Joint Stock Company (SSI) forecasts that the urbanization rate in the country will reach 40% in 2024 compared to 37% in 2019.
The paper packaging segment also benefits from the rapid growth of Vietnamese e-commerce. According to the Department of E-commerce and Digital Economy, Vietnam’s e-commerce will grow impressively in 2020 with an increase of 18%, a market size of US$11.8 billion, estimated to account for 5.5% of the total retail sales of goods and service revenue nationwide. Vietnam is the only country in Southeast Asia with double-digit e-commerce growth. In addition, Vietnam’s total export prong maintained its growth momentum, which will boost demand for paper packaging in the future.
Third, many other supporting factors such as production shifting trends, advantages from free trade agreements, and very positive export prospects.
In addition, VPPA also pointed out positive factors affecting the growth of paper packaging in Vietnam such as the trend of shifting production to the still ongoing paper industry; Free trade agreements with tax advantages, creating favorable conditions for Vietnam to boost the export of many goods, thereby boosting the demand for paper packaging from the agriculture, fisheries, and aquaculture industries, apparel and leather goods, telephones and electronics… Domestic retail consumption is also forecast to increase strongly; the restriction of plastic waste, plastic bags and increasing encouragement of the use of alternative paper packaging are showing signs of extensive and strong development in Vietnam by 2021; In addition, consumption of packaging paper in the world and in Asia is forecasted to grow again over 3.5%. Many countries and regions will issue orders to restrict or even ban the use of plastic bags, especially in major economies that will do this strongly in the period 2021-2022.
Notably, the export of packaging paper to the Chinese market in 2021 has a higher prospect than in 2020, as China is forecasted to have a supply shortage of more than 5 million tons and possibly higher when the import ban The revocation paper is officially effective from January 1, 2021. Paper prices are higher due to pressure on domestic prices and especially environmental and energy costs (environmental tightening policy has been implemented since October 2020).
The Ministry of Commerce of China (MOC) is investigating whether to impose anti-dumping duties on unbleached Kraft packaging paper imported from the EU, Japan and the US (specifically, this paper has HS code of 48042100. and 48043100, mainly made of unbleached wood pulp, or may also be made of other materials such as recovered paper and bamboo fibres, of a basic weight not exceeding 115 g/m² and which may be used used for packaging for cement, chemicals and dry goods. The tariffs are in effect for 5 years, but will remain in place during the review process, which will end in April 2022) will create opportunities for Vietnam to boost the export of packaging paper to the Chinese market in the coming time.