VietNamNet Bridge – Vietnam spends a great deal of money every year to treat scrap paper and to import scrap paper for domestic pulp and paper production. The huge domestic resource of scrap paper is being wasted, and it is also causing major environmental problems.

Saigon Paper JSC said it needs 1.4 tons of scrap paper or 2.2-4.4 tons of wood in order to make one ton of pulp.

The use of scrap paper to make pulp results in the waste of 24 trees in natural forest (2.2-4.4 tons of wood). It eats up a large volume of oxygen and power also. Water and crude oil are used used in large amounts, and emissions are high.

In general, making pulp from scrap paper with high technologies can cut production costs and help protect the environment.  

Experts said that scrap paper supply in Vietnam is abundant. However, Vietnam still has to import scrap paper, about 30-45 percent of the total amount needed every year.

The domestic scrap paper sources still cannot be fully exploited. A large amount of scrap paper is thrown away and turned into garbage, which Vietnam has to spend money to treat.

The Paper Industry Journal quoted sources as reporting that less than 30 percent of used papers have been recalled in Vietnam since 2000, a very modest proportion compared with 87 percent in the US, 74 percent in Japan and over 60 percent in Taiwan, South Korea, Thailand and Malaysia.

The sources said that if the recalled used-paper proportion increased by twofold, Vietnam would not have to import scrap paper.

Analysts believe that Vietnamese enterprises are not collecting scrap paper from domestic sources because of the lack of regulations and standards for the recycling industry in Vietnam, the lack of a perfect legal framework on waste material collection for recycling and the lack of policies on encouraging waste collection.

Under current laws, enterprises can get a VAT refund if they can show the input VAT invoices to taxation agencies.

It is obvious that enterprises cannot show invoices if they collect paper from petty scrap dealers.

Therefore, enterprises would rather import scrap paper to enjoy the import tariff of zero percent and get VAT refunds than buy scrap paper from domestic sources and pay the VAT.

Cao Tien Vi, general director of the Saigon Paper JSC, admitted that the company prefers importing scrap paper to domestic sources, because the company can put the imports into production immediately, while it will have to spend time on classifying domestic scrap paper before putting it into production.

Vi said the company imports 30 percent of scrap paper needed to make finished products, but is considering raising the proportion to 50 percent.