Paper manufacturers anticipate an input material shortage

Paper manufacturers anticipate an input material shortage as agencies are considering prohibiting scrap paper imports.

Government officials are still arguing about whether scrap paper imports should be banned.

The Ministry of Industry and Trade (MOIT) wants to import scrap paper, because it is the cheapest source of material for the domestic paper industry. 

The industry makes up 1.5 percent of GDP and earns $1 billion a year from exports.

Phan Chi Dung, former director of the Light Industry Department under MOIT, said to churn out one ton of paper, manufacturers need 3 million tons of pulp. 

And to have 3 million tons of pulp, they need 5 million tons of wood and many tons of oil and chemicals to treat the wood. So, importing scrap paper is the most feasible method for domestic paper production.

Regarding scrap paper supply, domestic sources can only satisfy 40 percent of demand, so Vietnam has to import 2 million tons of paper materials a year. 

However, it is now more difficult to import paper materials as scrap paper has been added to the list of five types of scrap subject to an import ban.

Hoang Trung Son, deputy chair of the Vietnam Paper and Pulp Association, said that scrap paper imports are a necessity, saying that other regional countries, including Thailand and Indonesia, also import scrap paper.

According to Son, Vietnam has entered a rapid growth period which is expected to last 10-15 more years. 

The paper demand in the next 10 years is expected to increase by more than 10 percent. In particular, the demand for packaging paper will increase by 15 percent per annum, reaching 10 million tons by 2025.

Therefore, scrap imports play a very important role in the paper industry, especially packaging paper, because 100 percent of materials used to make packaging paper are recycled.

The packaging market has great potential, especially when the Ministry of Natural Resources and the Environment (MONRE) called on people to stop using plastic bags, according to Viet Tri Paper’s general director Nguyen Van Hien.

Meanwhile, environment experts have called on the government to stop scrap paper imports, warning that rubbish and substandard waste may enter Vietnam through this way and cause pollution. 

Of thousands of import containers now stuck at ports, many containers contain substandard waste, which cannot satisfy the requirements to be imported to Vietnam. 

The experts cited the PM’s statement that Vietnam would not sacrifice the environment for industrial production and economic growth.

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