Vietnam is still pondering whether to import scrap paper

In late 2017, China stated it will stop importing 24 types of scrap materials for domestic recycling. The move immediately caused the world’s scrap material market to panic, because China consumes more than 50 percent of total scrap material in the world.

Fearing that scrap imports would head for Vietnam instead of China, the government of Vietnam decided to tighten scrap imports. This has hurt domestic paper manufacturers, because scrap paper, an important material to make pulp, is also among the materials subject to an import ban.

There are two types of pulp – primary and recycled – used to make paper. About 300 enterprises in Vietnam can make pulp with total output of 200,000 tons per annum, which is not enough for paper plants.

In 2017, Vietnam had to import 1.5 million tons of scrap paper to serve domestic paper manufacturing. In general, making paper from recycled pulp is a growing trend in the world because it is less costly and more friendly to the environment than primary pulp.

A report in 2017 from RISI and VPPA showed that the world needed 59 percent of recycled pulp.

According to MOIT (Ministry of Industry and Trade), paper demand has been increasing. MOIT’s Phan Chi Dung estimated that Vietnam needs 4.7 million tons of paper in 2018.

The shortage of pulp supply is expected to increase the paper production cost. 

Meanwhile, the price of input material for paper recycling globally is decreasing because of the supply increase after China stopped importing scrap paper, thus bringing great opportunities to foreign enterprises.

Hoang Trung Son, general director of the Dong Tien Paper & Packaging company, said the Indian paper industry has had big benefits over the last two years. And so will Indonesia. The country has exported paper to Vietnam at 10-20 percent lower prices, thanks to low-cost input materials.

Analysts say that Vietnam should think about how to control scrap imports to be sure that rubbish cannot enter the Vietnamese territory, while scrap paper can be imported to serve the domestic paper industry.

To restrict scrap imports, some countries in the world apply a policy on classifying paper, not only for more effective recycling, but also for export. 

Europe, for example, in 2017 collected 57 million tons of scrap paper, of which 48.6 million tons were recycled and the remaining were exported.

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Thanh Lich