Capital shortage has been a headache for local paper manufacturers (Photo: VNA) Hanoi (VNS/VNA)- A capital shortage for local paper manufacturers could make them lose out toforeign direct investment (FDI) enterprises in their own country, according toexperts.
Currently, paper demand inthe world in general and China in particular is huge. However, domestic paperfirms have not fully taken the opportunities as most of the Chinese marketshare belongs to FDI companies.
Many FDI businessesexported 100 percent of their products to China and are expanding their markets.
For example, Vina Kraft Paper CoLtd – a joint venture between Thailand and Japan brought its second paper andpackaging factory in southern province of Binh Duong into operation lastApril, bringing its total capacity to 500,000 tonnes per year.
In addition, a paper productionplant of Lee & Man Vietnam Paper Manufacturing Ltd invested by Hong KongLee & Man Paper Group (China) in the Mekong Delta province of Hau Giang isalso under construction. The factory is set to have annual capacity of 400,000tonnes.
Experts said this has been aheadache for not only the paper industry but also others in Vietnam, especiallywith the economy integrating internationally. Domestic firms are set to facedifficulties to maintain their market shares.
Dang Van Son, Secretary Generalof theVietnam Pulp and Paper Association (VPPA), was quoted as saying by onlinenewspaper enternews.vn thatonly big scale paper plants could ensure effectiveness. However, investments byforeign enterprises in Vietnam have been increasing. Most of their plants havecapacity of 500,000 tonnes a year, which is a threat to small Vietnamese plantswith capacity of less than 10,000 tonnes.
Vietnamese papermanufactures can’t access commercial loans because of high interest rates and alack of a preferential credit programmes.
Son said another problemfor the paper industry was the reliance of Vietnamese paper producers on pulpimports, nearly 50 percent.
It is expectedthat Vietnamese manufacturers will hold 51 percent of the packaging papermarket share in 2018-20, while foreign invested enterprises hold the remaining49 percent. Many experts were worried that the market share could be reversedif Vietnamese enterprises do not overcome difficulties and devise developmentstrategies, said Prof. Vu Ngoc Bao, an expert in the industry.
To overcome the challenges, some big firmshave taken action. In May 2018, Tan Mai Group in Dong Nai province begandeveloping new pulp and paper plants, including the Tan Mai – Kon Tum Pulp& Paper Plant, worth 1.3 trillion VND. It is expected to become operationalin the first quarter of 2020.
Meanwhile, its Tan Mai – Mien Dong PaperPlant, worth 2.75 trillion VND, is scheduled to enter trial production in early2020.
However, not all enterprises can mobiliselarge capital to build large-scale paper plants.
Instead, local paper manufacturers shouldrestructure and build large and modern factories to compete with FDI firms, hesaid.
Bao suggested that the Government offerpreferential loans for the manufacturers.-VNS/VNA
Currently, paper demand inthe world in general and China in particular is huge. However, domestic paperfirms have not fully taken the opportunities as most of the Chinese marketshare belongs to FDI companies.
Many FDI businessesexported 100 percent of their products to China and are expanding their markets.
For example, Vina Kraft Paper CoLtd – a joint venture between Thailand and Japan brought its second paper andpackaging factory in southern province of Binh Duong into operation lastApril, bringing its total capacity to 500,000 tonnes per year.
In addition, a paper productionplant of Lee & Man Vietnam Paper Manufacturing Ltd invested by Hong KongLee & Man Paper Group (China) in the Mekong Delta province of Hau Giang isalso under construction. The factory is set to have annual capacity of 400,000tonnes.
Experts said this has been aheadache for not only the paper industry but also others in Vietnam, especiallywith the economy integrating internationally. Domestic firms are set to facedifficulties to maintain their market shares.
Dang Van Son, Secretary Generalof theVietnam Pulp and Paper Association (VPPA), was quoted as saying by onlinenewspaper enternews.vn thatonly big scale paper plants could ensure effectiveness. However, investments byforeign enterprises in Vietnam have been increasing. Most of their plants havecapacity of 500,000 tonnes a year, which is a threat to small Vietnamese plantswith capacity of less than 10,000 tonnes.
Vietnamese papermanufactures can’t access commercial loans because of high interest rates and alack of a preferential credit programmes.
Son said another problemfor the paper industry was the reliance of Vietnamese paper producers on pulpimports, nearly 50 percent.
It is expectedthat Vietnamese manufacturers will hold 51 percent of the packaging papermarket share in 2018-20, while foreign invested enterprises hold the remaining49 percent. Many experts were worried that the market share could be reversedif Vietnamese enterprises do not overcome difficulties and devise developmentstrategies, said Prof. Vu Ngoc Bao, an expert in the industry.
To overcome the challenges, some big firmshave taken action. In May 2018, Tan Mai Group in Dong Nai province begandeveloping new pulp and paper plants, including the Tan Mai – Kon Tum Pulp& Paper Plant, worth 1.3 trillion VND. It is expected to become operationalin the first quarter of 2020.
Meanwhile, its Tan Mai – Mien Dong PaperPlant, worth 2.75 trillion VND, is scheduled to enter trial production in early2020.
However, not all enterprises can mobiliselarge capital to build large-scale paper plants.
Instead, local paper manufacturers shouldrestructure and build large and modern factories to compete with FDI firms, hesaid.
Bao suggested that the Government offerpreferential loans for the manufacturers.-VNS/VNA
VNA
