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Domestic paper producers attempting to raise prices
Imported paper products have been flooding Vietnam, while prices have been decreasing. However, domestic producers are still attempting to raise the sale prices of their products, reasoning higher input material prices.
Imports dominating domestic market
After a price increase in April 2009, imported paper prices suddenly turned back and started decreasing. Currently, a gram of ‘Double A’ A4 paper is now selling at 58-59,000 dong, a decrease of 3,000-4,000 dong per kilogramme. Similarly, ‘IK plus’ and ‘A one’ paper prices have decreased to 52-54,000 dong per gram.
K.T, a paper importer in HCM City, said that the prices of imported products are tending to decrease on the domestic market as imports have been abundant. In fact, import prices have increased by $100 per tonne over the beginning of the year to $800 per tonne. However, the new price is still lower than the peak price of $1,000 per tonne.
Statistics released by the Vietnam Paper Association (VPA) showed that some 380,000 tonnes of paper of different kinds were imported into Vietnam in the first five months of the year.
Meanwhile, the prices of domestic products have been going the opposite way. According to the business director of a notebook production company, the latest price quotation from Tan Mai Paper Corporation shows that printing and writing paper has the price of 16.2 million dong per tonne (not including VAT), which means the sharp increase of one million dong per tonne.
“The price proves to be overly high. We can purchase foreign-made paper of the same kind at 15.1-15.2 million dong only (including VAT),” he said.
He added that if it used domestically-made products, the company would have to raise the sale prices of notebooks for students by 3-5 percent at least.
Some newspaper offices have received new price quotations for newsprint imported from Indonesia at 11.85 million dong per tonne (including 3 percent import tax and other expenses, a decrease of 2.1 million dong per tonne in comparison with April). Meanwhile, domestic paper producers are still selling at 14.2 million dong per tonne (not including tax).
Still raising prices despite slow sales
Deputy General Director of a paper plant has confirmed that his company’s sales are unsatisfactory. In the first five months of the year, output was just 60 percent of the same period last year and sales decreased by 25 percent. However, he said that the company still has to raise sale prices because of higher input material prices.
Domestic products now not only have to compete with imports, but also with products from small workshops which have more competitive prices.
In fact, in an effort to prevent sales from further decreasing, some producers have begun to offer discounts, though no wholesale price decreases have been announced. Discounts of 1 million dong per tonne have been introduced for loyal clients and enterprises which have committed to long-term purchases.
However, Han Vinh Quang, Chairman of the Sub-association No 2 of VPA, said that this is just a temporary solution which aims to help boost sales. The thing that domestic producers have to do to improve the situation is to renovate technology in order to make production costs lower.
The Vietnam Paper Association said that the sales of domestic producers are down by 25 percent from last year while many paper plants are running at just 60-70 percent capacity.
VietNamNet, TT
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