By Thai Hang - The Saigon Times Daily

HCMC – Paper producers said that they would increase their prices 15% to account for rising raw material prices, including pulp, recycled paper and timber.

Cao Tien Vi, Saigon Paper Co.’s director, said that most of the company’s products would increase 15% in price this week. 

Vi said that input costs – minus raw materials – had increased considerably in late February, as had imported pulp and recycled paper,  forcing manufacturers to raise their prices. 

In addition, power, water and transportation costs increased as well. Vi said that power, which accounts for 10% of total cost, had climbed 6% over the last two months.

The fluctuating Forex exchange also contributed to price hikes.

After the latest price hike on April 1, one of the country’s largest paper producers, Tan Mai Paper Co., added VND1.2 million per ton to scrolled newsprint from about VND17 million per ton. Tan Mai Paper said it would raise prices 17%.

Vu Ngoc Bao, Vietnam Pulp and Paper Association’s secretary general, said that the firmer U.S. dollar against Vietnam dong was also a factor. The exchange rate rose about 13% compared to 2008, when paper prices were only US$400 per ton.

Bao explained that the 30% price hike was due to limited world pulp supplies.
He added that local recycled paper could satisfy 80% of demand. 

However, he said that the industry should double its paper and pulp output in the years to come to balance import rates.

World paper futures of NBSK and BHKP pulp on April 30 listed at US$964 and US$862 per ton respectively. 

According to the Vietnam Pulp and Paper Association, Vietnam will need to import approximately US$1.6 billion worth of paper, pulp and other materials in 2010 to meet the local demand.