VietNamNet Bridge - Industrial packing papers have piled up in large stocks because they have been left unsold. The industry has fallen into the most difficult period ever.
Industrial packing papers have piled up in large stocks because they have been left unsold
On February 15, the Hoang Van Thu Paper Company, representing the member companies of the industrial packing paper association, sent a petition to the Prime Minister, Ministries of Finance, Industry and Trade, and to the Chairman of the Small and Medium Enterprises’ Association, crying for help. The petition was sent after most of industrial paper companies have had to narrow the production scale and cut jobs.
Production paralyzed
According to the Vietnam Industrial Packing Paper Association, 80% of its member companies have halted production, or cut down productivity by between 40-60% since the fourth quarter of 2008. It is because the import industrial paper has become very cheap, thus bringing loss to local producers.
As the global economy has entered the recession period, foreign industrial paper producers have been bargaining papers away to clear stocks and return capital. Meanwhile, the import tax of the products remains at low levels, which have paved the way for foreign products to flood the domestic market which threatens to kill the local production.
Thanh Dung Company Ltd now has 3,000 tonnes of kraft in stocks, and 6,000 tonnes of material paper. The Dong A Company has 2,000 tonnes of kraft in stocks and 5,000 tonnes of materials, while Hoang Van Thu has 1,500 tonnes and 5,000 tonnes. The unsold products mean that several billions of VND are being buried in the products.
The Hoang Van Thu Paper Joint Stock Company in
Similarly, The Dong A Company also said that they only have one paper machine operating, while the other two have been left idle. More seriously, all the production lines of the Thanh Dung Company Ltd in Hai Duong province have stopped operation, pushing 250 workers into unemployment.
Crying for help
Industrial paper producers have called for support, saying that local production should not be ignored. They said that the quality of domestically made paper products is not inferior to imports from
They said that the association’s companies use scrap paper and used paper as input materials, which can help treat waste and protect the environment.
In order to rescue the local production, the association has called on state management agencies to give VAT incentives to the companies which use scrap paper as input materials. The VAT cut from 10% to 5% has been suggested.
The association also said that the twelve industrial paper workshops now are in very dangerous situation, especially when the electricity price will increase as of March 1.
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