Vietnamese enterprises to intercept packaging paper trends

DHC intercepted the trend of packaging paper

Along with the forecast of the increasing demand of packaging paper, many Vietnamese enterprises now have been intercepting this trend with stronger investments.

Dong Hai Ben Tre Joint Stock Company (DHC) is one of the enterprises that have intercepted the trend of packaging paper. In terms of production capacity, DHC is one of the five largest industrial paper manufacturers in Vietnam, after Saigon Paper (Ba Ria - Vung Tau), Vina Kraft Paper (Binh Duong), Chang Yuen Paper (Binh Duong) and An Binh Paper (Binh Duong). Besides, DHC accounts for 4% domestic market share. DHC's highlighted activity is the investment in the Giao Long 2 factory. The factory will officially go into operation in early 2019, helping to increase the capacity of producing paper for packaging (kraft paper) and meet the trend in the domestic market and the great demand of southern enterprises.

The company has reduced costs and risks of fluctuations in raw material price due to self-supply of kraft paper for carton packaging production (capacity of 150,000 products / day). As a result, DHC's gross profit margin is higher than its peers. If Giao Long phase 2 runs at full capacity, it will help DHC's kraft paper production capacity increase by 3.5 times compared to the current to 840 tons / day which is about 205.000 tons of kraft paper / year.

Statistics showed that the current paper market has a state-owned enterprise which is Vietnam Paper Corporation and 300 joint-stock companies, private enterprises and FDI enterprises. Most businesses are small in size under 100.000 tons / year and under 20 enterprises with scale of over 100.000 tons / year. Thus, expanding capacity is the general trend of the paper industry enterprises today. Last September, Eastern Tan Mai Joint Stock Company was licensed to build Eastern Mai Mai Paper Factory specialized in producing packaging paper with a capacity of 150.000 tons / year.

Mr. Dang Van Son, General Secretary of Vietnam Pulp and Paper Association, said only large-capacity paper factories can ensure business efficiency and increase competitiveness. Similarly, Bao Viet Securities Joint Stock Company (BVSC) also said: “Giao Long 2 factory put into commercial production from 2019 will open a new high growth phase for DHC”. The settlement of output for Giao Long 2 is almost not worrying because the demand for packaging in Vietnam is growing.

However, there are many challenges this industry is facing, such as negative impacts on the environment and stricter management with clearer regulations on the import of waste paper. The Vietnam Pulp and Paper Association will soon conduct the construction of the Paper Industry Restructuring Project in 2020-2035 under the direction of the Ministry of Industry and Trade. Therefore, it is possible that the upcoming paper industry can stand before the stage of purification being larger in scale and more modern.

Paper Vietnam, The International Exhibition & Conference on Pulp and Paper Industry anually held in Vietnam, is an ideal place for connecting, enhancing and expanding businesses. Please come to visit Paper Vietnam 2019, which takes place from 26th – 28th June 2019 at Saigon Exhibition and Convention Center (SECC) in Ho Chi Minh City.