The rising cost of paper materials caused by a fall in supply is presenting a challenge for the printing and paper industry, experts said at a conference held on August 30 in HCM City.

Ngo Anh Tuan, chairman of the HCM City Printing Association, said the printing industry continues to grow steadily but faces major challenges, such as an undersupply of paper materials.

Many paper manufacturers and suppliers around the world are closing or limiting their supply, he said.

To My Chau, general director of the Phung Vinh Hung Paper Joint Stock Company, said that China, which supplies around a fourth of the world’s paper materials, is lowering its paper and packaging supply due to the country’s policies that have cracked down on polluting factories.

As a result of the policies, the number of paper manufacturers in China has fallen by around 80 per cent.

This situation, coupled with the steadily rising demand for paper, has resulted in a spike in paper prices, making it more difficult for the printing industry to access paper materials.

The price of a 58 gram per sq.m paper as of May was VND24 million (US$1,030) per tonne, which was 30 per cent higher than the beginning of the year.

In addition, price of paper for newspaper printing is now 15-20 per cent higher than it was in February.

Chau said that China is also limiting imports of recycled paper, which is crucial for manufacturing packaging paper, while falling demand for newspapers and magazines mean that manufacturers are switching from such paper materials.

Meanwhile, Vu Truc Phuc, general secretary of HCM City Printing Association, said that small- to medium-sized firms in the printing and packaging industry are struggling with rising paper prices, making it harder for them to fulfill certain contracts and lowering their profits.

Nguyen Van Huu, chairman of the Long An Printing Joint Stock Company, said that small firms are facing difficulties buying expensive advanced machinery due to limited budgets.

Opportunities

Tuan said that, due to the US–China trade war, which is placing large tariffs on Chinese exports to the US, American and European firms doing business with the Chinese side may start to look for partnerships in Viet Nam.

Vietnamese firms should study these potential markets and obtain international certifications so that they can qualify for exports soon, he said, adding that the number of printing firms and packaging manufacturers with international certification in Viet Nam is still minimal.

Chau said that because of the US trade war, China may begin to export more paper materials to nearby countries like Viet Nam, increasing supply in the country.

“Vietnamese firms should be proactive and take advantage of the potential opportunities by looking to foreign markets for exporting,” Chau said.

The conference was a part of the 2018 Viet Nam PrintPack & FoodTech international exhibition that ends on September 1. — VNS