Vietnam’s paper industry rapidly expanded capacity during 2010, adding eight major new production facilities with a total capacity of 430,000 tonnes per year.
Tan Mai Joint Stock Co, meanwhile, built four new paper mills in the central and southern provinces of Quang Ngai, Lam Dong, Kon Tum and Dong Nai with a total cost of VND6 trillion (US$285 million).
A VND3.35 trillion ($159 million) packaging plant was opened by the Vina Kraft Paper Co in the southern province of Binh Duong, while the Sai Gon Paper Co invested around VND2 trillion ($95.2 million) in its My Xuan 2 plant in the southern province of Ba Ria-Vung Tau.
Bai Bang Paper, meanwhile, opened a VND520 billion ($24.7 million) mill during 2010 to produce newsprint, while Diana Joint Stock Co invested roughly $20 million in launching a tissue paper plant on a 10ha site in the northern province of Bac Ninh.
Sizeable investment in the past year is a good sign for the industry, reflecting a growth rate expected to reach 11 per cent this year and reducing import, said Viet Nam Pulp and Paper Association general secretary Vu Ngoc Bao.
However, paper producers continued to barely break even or even operate at losses, Bao said. Manufacturing costs rose by 30 per cent last year, he noted, while producers increased product prices by only 14-20 per cent.
Paper import duties have been reduced by 20 per cent since September 2008, he said, and Viet Nam has opened the door to foreign competitors from the US, China and Japan, increasing competition for domestic producers.
Also the paper production was a significant source of water pollution, with both major producers and smaller firms often using outdated equipment with high waste generation. Mills needed an average of 30-100 cubic metres of water for one tonne of paper produced, polluting nearby rivers and canals.
