Vietnam Slated to Have 1.4 million mtpy of New P&B capacity by the End of 2020

The country’s total P&B production was approximately 3.7 million last year, according to Beth Lis, Fastmarkets RISI’s Vice President for Asian Paper.

Almost 90% of the new capacity is in the packaging paper and board sector, mostly recycled containerboard, according to the VPPA.

Both foreign and local investors are eyeing Vietnam as a fast-growing industrial hub in Southeast Asia, where demand for packaging material is expected to balloon.

The momentum is likely to build with a landmark free trade deal that Vietnam signed with the European Union (EU) on June 30.

The agreement, once approved by the European Parliament, will eventually eliminate tariffs on 99% of the goods traded between the two sides for up to seven years, and will certainly boost Vietnam's exports to the EU, already its second-largest export market after the US.

The expansion projects also include new tissue machines. Malaysia’s NTPM Holdings, though not listed by the VPPA, recently fired up a 22,000-mtpy tissue machine at its mill in Binh Duong province, and an identical one will soon follow.

Vietnamese producer Xuan Mai Paper has begun infrastructure work for the first tissue machine at an existing mill in Ho Chi Minh city, with startup scheduled for April 2020.

Andritz has been signed up to provide the new 20,000-mtpy tissue machine, which will have a trim width of 2.85 m and a design speed of 1,300 m/min, and a deinked pulp (DIP) line. The tissue to be produced there will be able to use either DIP or market wood pulp as furnish.

A company contact told Fastmarkets RISI that they plan to sell about 90 percent of the production in the form of parent rolls. Most will be exported to overseas markets, especially to Japan.

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