The high-class (coated) packaging paper segment is the "gap" that the paper industry needs to fill and this is an opportunity for paper businesses to invest in technology and create quality products to catch up domestic and foreign demand.
Expanding production to meet rising demand for packaging paper
In Vietnam, packaging paper is currently the main paper product accounting for nearly 80% of total industry consumption. However, in 2019, Vietnam still has to import about 1.225 million tons, because domestic production only meets about 5%. This is a limitation but it also opens up opportunities for paper enterprises who have ability to invest in technology and create quality products to catch up with domestic and foreign demands.
According to the Vietnam Pulp and Paper Association (VPPA), in March 2020, all items of the paper industry including packaging paper grew from 2-5% compared to February 2020.
At present, domestic production of packaging paper is mainly surface paper (Testliner, Krafliner) and corrugated paper (Medium), used to produce corrugated carton, meeting 84% of domestic demand. Particularly high-grade coated paper such as Whitetopliner is commonly used in the field of seafood packaging printing, fruit packaging for export, most of which must be imported because very few domestic enterprises can produce.
A current situation in the paper industry, the number of businesses is large but small and weak, behind the time technology. In terms of ability, FDI enterprises have more advantages with large capital sources, modern technology investment, high productivity, and an average output of over 400,000 tons / year like Lee & Man Vietnam (420,000 tons / year). ). Lee & Man is also one of the businesses that can produce Whitetopliner paper with an average output of more than 100,000 tons / year, accounting for nearly 25% of the total packaging paper output of the whole factory.
In addition, to meet the rising demand for packaging paper, in 2020-2021, there are expected to be about 7 domestic paper packaging factories to be put into production / raising capacity.
"Fill the space" the high-class coated packaging paper segment
According to VPPA, in the next 5-10 years, the demand for packaging paper is expected to grow by 14-18% / year. Therefore, the plan to expand the production of packaging paper factories is a positive direction. However, the segment of high-class (coated) packaging paper is the "gap" that the paper industry needs to fill, instead of focusing solely on the production of conventional packaging paper.
In general, potential paper packaging enterprises will have the right investment direction, not only to meet the market demand but also to contribute to increasing the competitiveness of Vietnamese paper products.