Vina Kraft Paper in Vietnam to Increase Kraft Paper Production by 30,000 tpy

Vina Kraft Paper plans to increase production of kraft and corrugated paper by 30,000 tonnes to 250,000 tonnes per year.

Sept. 13, 2012 (Bangkok Post) - Vina Kraft Paper Co., majority-owned by SCG Paper, is set to spend 600 million baht to debottleneck its paper mill in Vietnam to cope with increasing demand in that country.

General manager Chalokeporn Phalajivin said the planned budget just won board approval, and the company expects the new investment will help increase production of kraft and corrugated paper by 30,000 tonnes to 250,000 tonnes per year starting from mid-2013.

Some 97% of new production will be for domestic use in Vietnam and the rest for shipment to Japan, Malaysia, Cambodia, Indonesia and Thailand.

Vina Kraft Paper, a 70:30 joint venture of SCG Paper and Japan's Rengo Co Ltd, produces kraft and corrugated paper.

Demand for paper in Vietnam is estimated at 1 million tonnes a year, surging by 10% a year the past five years. Local production averages 900,000 tonnes a year.

Vina Kraft Paper's US$171-million mill is on 380,000 square metres in Binh Duong province, immediately to the north of Ho Chi Minh City.

It started manufacturing in mid-2009, producing 220,000 tonnes of kraft and corrugated paper. The mill employs 225 Vietnamese workers and 29 Thais.

Mr. Chalokeporn said Vietnam is well-suited for labour-intensive industries due to its cheap labour costs and abundant raw materials.

However, he noted it is still quite hard to recruit highly skilled labourers in Vietnam, as industrial development kicked into high gear just over a decade ago.

Vietnam needs to improve infrastructure and power facilities to serve industrial development in the future, said Mr. Chalokeporn.

Vina Kraft has a 20% share of the 16-billion-baht local paper market.

SCG began operations in Vietnam in 1992 and now has seven business units specialising in building materials, distribution, paper and chemicals, with four representative offices to help it connect with local partners and initiate local programmes. SCG's total investment in Vietnam is valued at 11 billion baht.

Mr. Chalokeporn said given the global economic uncertainties, Vina Kraft is undecided about setting up a second paper plant in Vietnam.

SOURCE: Bangkok Post