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Domestic investors put more money into paper
Vietnamese enterprises are building more paper production plants while their foreign counterparts have been forced to shut down such projects due to financial difficulties.
Industry insiders had expected large-scale foreign paper production projects to save the domestic market from having to import large quantities of paper every year. However, due to financial difficulties caused by the global financial crisis, the progress of foreign projects has been much lower than expected.
According to statistics from the Viet Nam Paper and Pulp Association, this year the country will have to import roughly 1.62 million tonnes of its total demand of 2.7 million tonnes of paper, up 21 per cent over last year.
Hong Kong’s Lee & Man Paper project in the southern Hau Giang Province was expected to produce 420,000 tonnes of paper and 330,000 tonnes of pulp. However, the project remains unfinished and work is behind schedule. Lee & Man’s representative, Vu Ngoc Bao, said that construction on the projects would resume in September at the earliest due to financial difficulties.
In contrast to struggling foreign paper projects, Vietnamese enterprises are accelerating their investment in the paper industry.
"The Tan Mai group is set to break ground on a VND1.95 trillion (US$109 million) project in central Quang Ngai Province sometime during the fourth quarter and has three other major projects in the works," said Tan Mai general director Tran Duc Thinh.
Thinh said the four Tan Mai projects were expected to go operational by next year as the group had purchased the complete production line of the Gaspesi Paper Company in Canada.
When the projects go operation, Tan Mai will provide 460,000 tonnes of pulp and 350,000 tonnes of paper to the domestic market annually.
Vu Ngoc Bao, general secretary of the Viet Nam Paper and Pulp Association, said that in addition to the Tan Mai project, construction at 15 other domestic paper production projects was going as planned. Bao expected that all the projects would be completed by early 2010.
The Government has encouraged investment in the paper industry. In a meeting with paper authorities in March, Prime Minister Nguyen Tan Dung urged the industry to rapidly implement paper production projects and to buy cheap imported equipment in the wake of the global economic slowdown.
VNS
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