High input costs have adversely affected the competitiveness of the domestic paper industry, said an official from Vietnam Paper Corp (Vinapimex).
While imported pulp accounted for 60–65% of the production cost of enterprises producing paper from imports, bamboo and wood made up 25–30% of the production cost of paper produced from locally available materials.
Though factories have produced paper pulp to their full capacity, low rate on investment has affected the sector’s efforts at reducing costs. The corporation is upgrading equipment and investing in new pulp factories with modern technology, the official said.
In the past five years, the corporation has injected more than nine trillion dong (U$573 million) into upgrading production, bringing the total designed capacity to 325,000 tonnes of paper a year. However, the domestic paper industry has met only 70% of the demand.
In the first eight months of 2004, the paper industry produced 166,988 tonnes of paper, of which 100,676 tonnes accounted for printing and writing material, 23,213 tonnes of newsprint and 33,500 tonnes of industrial packaging paper, for a total revenue of nearly 1.8 trillion dong.
Bai Bang Paper Co, a member of the corporation, doubled its capacity producing 54,053 tonnes of paper in the first eight months of 2004, meeting 63.6% of the yearly target. Viet Tri Paper Co has also so far this year produced 26,123 tonnes of paper fulfilling 81.6% of the yearly target.
The corporation is planning to earn 2.9 trillion dong this year, and 3.3 trillion dong for 2005 from producing 291,500 tonnes of paper, the official said.
To meet this target, companies have to raise competitiveness in the domestic market.
The state has to provide support by giving priority to projects for producing pulp locally to reduce imports, and regarding policies and procedures to improve investments the official said.