Home grown pulp to yield parallel industries

photo source jkpaper.com

Le Van Dung, deputy director   of Dung Quat economic zone management authority, last week told VIR that the province would soon grant an investment certificate to a joint venture between JK Paper and Sojitz Corporation to build a $180 million pulp factory in the zone, in Quang Ngai.

“We are in the final steps of administrative procedures for granting the investment certificate to the investor in the third quarter of this year,” said Dung.

The pulp factory, due to be located in Dung Quat economic zone, would have a total annual production capacity of around 200,000 tonnes of pulp.

In 2007, Sojitz in association with Japan’s Oji Paper Corporation proposed to build a mega pulp producing factory worth $1 billion in Quang Ngai which could produce 600,000 tonnes of pulp per year. But the scheme never made it out of the board room.

“After studying the feasibility of the investment, they [Sojitz and Oji Paper] realised that supply of raw materials in Vietnam could not ensure the stable running of such a  huge factory. So they stopped pursuing the project,” said Dung.

The newly proposed factory is just one third of the previously proposed investment, leaving investors confident that there is enough raw material for production, according to Dung.

The JK Paper-Sojitz Corporation pulp factory will help the nation reduce its reliance on imported pulp, as current pulp production in the country is far below demand. According to the Vietnam Paper and Pulp Association, Vietnam’s pulp production capacity in 2012 reached 484,300 tonnes, a 30 per cent rise from 2011. However, Vu Ngoc Bao, general secretary of the association, said this capacity could only satisfy half of the national demand.

In the first half of this year, Vietnam had to import approximately 700,000 tonnes of paper, worth $640 million, up 13 per cent from a year ago.

The rapid growth of paper demand in Vietnam prompted Hong Kong-based Lee & Man Paper Manufacturing Ltd to resume construction of a long-delayed pulp and packaging paper project in order to start production in Vietnam at the end of this year. The paper manufacturer received  investment certificates in 2007 to build two factories in Song Hau Industrial Park in Hau Giang, with the capacity to produce 150,000 tonnes of pulp and 420,000 tonnes of packaging paper.