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Paper industry shows signs of recovery
Unlike the gloomy atmosphere in the last months of 2008, the paper industry has shown signs of recovery since the beginning of the second quarter of 2008.
Vu Ngoc Bao, Secretary General of the Vietnam Paper and Pulp Association (VPPA), said that the demand for newsprint, writing paper, packaging and tissue paper have increased by 10, 14, 11 and 23 percent, respectively.
Paper production in 2008 could have grown by over 16% over 2007 (in the first eight months of 2008, the industry grew by 16 percent over 2007) if the global economic crisis had not happened, and the import tax on paper imports sourced from ASEAN had not been slashed from 5 to 3 percent. Moreover, trade fraud in paper imports also made production decrease by 1.4 percent, while imports increased by 5.8 percent.
After a lot of difficulties, the paper industry has begun recovering. Paper production in the first quarter of 2009 increased by 11 percent over the fourth quarter of 2008, but this was just equal to 56 percent of that of the first quarter of 2008.
Paper consumption increased sharply in early April, but sales have decreased since April 16, 2009 as people expect the value added tax to decrease by 50 percent as of May 1, 2009.
According to VPPA, the paper industry showed signs of recovery in mid April, but the recovery is unstable. Bao said that at this moment, the world’s economic recovery is tenuous, while input material prices for paper production fluctuate.
Meanwhile, local paper plants are running at just 80-85 percent of the capacity of the same period last year. However, the positive signs of the industry show that the production and consumption in 2009 will be higher than in 2008, by at least 10 percent.
Analysts, though thinking that it is too early to affirm that the paper industry has overcome its crisis, say that paper enterprises are resilient.
Paper companies have been maintaining normal production despite the big economic difficulties. The sale prices of paper products have decreased two to three times while writing paper prices have decreased two times in the past 20 days.
Bao from VPPA said that the lesson which could be drawn from the struggling in the economic downturn is that besides taking full advantage of the government’s support policies, enterprises should rely on their inner strength.
VietNamNet, DTCK
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