Paper Packaging Companies: Competition And Opportunities

Opportunities for paper packaging company

With great properties such as compactness, impact resistance, low cost, fast decomposition, and recyclability, paper packaging is less harmful to the environment than plastic packaging and presents high aesthetics thanks to modern printing technology. It is the widely known truth that paper packaging does not have to worry about being replaced.
 
The paper packaging industry still has plenty of room for growth, especially when Vietnam joined the TPP (Trans-Pacific Partnership), which entails the growing demand for this type of packaging in the industries such as leather, footwear, textiles, seafood, etc. to grow in export turnover.

Currently, the competition in the paper packaging industry is quite fierce since there are a huge number of enterprises and the paper packaging products are not highly distinctive. Foreign-invested enterprises with solid capital investment foundations are having an edge over the domestic companies.
 
Currently, about 40% of raw materials for paper packaging are industrial paper, which is still imported due to a lack of domestic supply. However, with projects registering to invest in the industrial paper industry, if done on schedule, by the beginning of 2018, we will be able to produce more than enough paper needed for paper packaging production.
 
In addition, after Vietnam joins the TPP, industrial paper imported from Japan may also be exempted from 0% tax instead of the current import tax rate of 10% - 15%, creating favorable conditions for paper packaging enterprises thanks to the abundant raw materials supply and reasonable selling prices.
   

Competition of paper packaging company

The number of businesses involved in the final production of paper packaging is quite high at around more than 200 suppliers. Competition among these enterprises is quite fierce, especially between domestic enterprises and foreign-invested ones.
 
Large FDI enterprises in the paper packaging industry come from many countries with developed packaging industry, these enterprises execute only stage 2 or both stages, producing industrial paper for their internal needs.
 
If manufacturers only cater for producing paper packaging, but they do not take control of the industrial paper, the profit margin is relatively low. 
 
For semi-finished industrial paper, the competition in this segment is lower due to the small number of enterprises participating in the market and the supply is not enough to meet the demand due to the relatively large production capital. Currently, according to the Vietnam Pulp and Paper Association, Vietnam still has to import about 40% of industrial paper needs. Enterprises are operating mainly with small-scale capacity and there are very few enterprises producing a capacity of over 100,000 tons/year.


Paper import sources are quite abundant and there is no dominant import market. Paper packaging is the main import product of the paper industry (accounting for more than 60%), so it is possible to use import data from the paper industry as a whole to refer to paper packaging.
 
The paper import markets of Vietnam are plentiful, and no market has a dominant share (over 30%). China, Indonesia, Thailand, Taiwan, South Korea, and Japan are the main import markets of the paper industry and paper import from China accounts for the largest proportion, only 20% of total import turnover.
 
Production enterprises are concentrated mainly in the South. Due to the strong development of the processing industry, especially in the southern key economic region (Ba Ria Vung Tau - Dong Nai - Binh Duong - Ho Chi Minh City) and to reduce transportation costs, manufacturing enterprises The packaging is also mainly focused.
 

Read more: Vietnam packaging manufacturing on the rise
 

Khang Thanh – The packaging company in Vietnam specializes in producing paper bags, rigid box, labels, hangtag, books, calendar, POSM and so on. Contact us to support your brand with the right packaging:

KHANG THANH CO., LTD - ​HOUSE OF PACKAGING
Tel: (+84) 77 8878 222 ​
Email: info@khangthanh.com