Could Vietnam become a regional tissue exporter? Advances in infrastructure and production technology key to realising potential. Report by Bruce Janda, Senior Consultant, ResourceWise.
Vietnam possesses the potential to emerge as a significant tissue exporter within the regional market due to its strategic geographical location and growing production capabilities. Its tissue mills – primarily concentrated around major economic hubs such as Hanoi and Ho Chi Minh City – are positioned to serve neighbouring markets effectively. Leveraging its proximity to countries spanning from Australia to Taiwan and extending to eastern India, Vietnam could capitalise on regional trade opportunities and cement its role within the tissue industry.
Investments in infrastructure and advancements in production technologies are key to realizing this potential. A thorough analysis of Vietnam’s trade patterns, production capacities, and economic indicators, such as population growth, GDP per capita, inflation trends, and unemployment rates, can provide valuable insights into the country’s readiness to scale its tissue exports. Strategic initiatives to boost fibre integration and enhance pulp production could further strengthen Vietnam’s competitiveness in the global tissue market.
Figure 1 shows a map of Vietnam with tissue mill locations, mainly clustered around Hanoi and Ho Chi Minh City. The map highlights the region from northern Australia to Taiwan and eastern India as potential areas for tissue trade.
Figure 2 shows Vietnam’s space population and GDP per capita trend over the past 17 years. GDP per capita is expressed as PPP, or purchasing power parity, to understand better the average individual income available for spending relative to global norms. Vietnam’s total population was estimated to be 105,750,975 in 2024. It has grown at approximately 0.89% recently, putting it in the upper half of global country growth rates. The population is not evenly dispersed and instead is clustered along the coasts and river deltas, creating one of the highest population densities in the world. At the same time, about 47% of the country’s area is considered forested.
The blue line in Figure 2 shows the evolution of GDP per capita (PPP), which has been increasing significantly faster than the population, at about 8.12% in 2022. This ranks at about 24th among nations in the world and provides a reasonable expectation for further development of domestic tissue consumption.
Vietnam has enjoyed relatively positive inflation and unemployment rates since 2015, as seen in the trends in Figure 3. Current inflation has increased to about 3.5%, but it is still manageable. This provides a good climate for developing consumer tissue demand.
Figure 4 shows Vietnam’s tissue import trend over this study. A significant increase was shown in 2020, probably due to pandemic supply issues. Indonesia is providing the majority of tissue imports now with some growth from China. Figure 5 shows Vietnam’s tissue exports. Note that the scales on the Y axis for import or export tons are different due to the import spike in 2020. Exports have grown steadily since 2010. However, exports have only exceeded imports since about 2021.
Vietnam has begun to improve its tissue machine fleet and increased capacity throughout the study. Figure 6 shows that 16 machines were added and two were removed for a net increase of 14 tissue machines. The country’s tissue sites integration status is shown in Figure 7. 55% of the tissue mills use recycled fibre that is at least partially produced on site. Some 3% of the tissue sites includes both virgin and recycled integrated fibre, while only 1% of sites have on-site integrated virgin fibre.
Vietnam produces pulp for the market, as shown in Figure 8. This consists of bamboo and Acacia fibre. Acacia is the same tropical hardwood that comprises most of Indonesia’s pulp and paper exports. Although Acacia is not considered as soft a tissue fibre as eucalyptus, it is generally regarded as a good fibre for tissue production. The other component of Vietnam’s market pulp is bamboo. Bamboo fibres typically resemble hardwood, though some species can match softwood in strength. Indonesia has faced far more criticism for deforestation and forest ecology management, but Vietnam is not exempt from criticism. Perhaps a profitable and sustainable forest products industry could help enhance its reputation and provide raw material for tissue expansion and increased exports?
Vietnam’s tissue capacity by finished product form is shown in Figure 9. The stacked bars on the chart show the fibre description and amounts used for each product. Consumer bath is the largest category, with commercial bath tissue in second place. The majority of the consumer bath tissue is made using recycled eight fibre, but some amount of bleached non-wood fibre and imported eucalyptus is included. Consumer and commercial facial tissue are the next most common categories, with consumer towel and napkin following far behind.
A comparison of regional tissue producers and the United States was made to benchmark Vietnam’s tissue machine quality. Figure 10 shows this by plotting the average technical age of each country’s machines against average tissue machine line speed, with bubble size representing total capacity.
Vietnam and Indonesia have the newest tissue machine fleets, averaging 15 years in technical age, while Japan, Taiwan, and Thailand exceed 30 years. The United States also falls in this category but has wider and faster machines than most. A second quality comparison will be provided in Figure 12 to analyse tissue machine viability.
Figure 11 compares average tissue production costs among various countries, including Vietnam. Each bar’s height shows the cash cost per ton, while its width reflects tissue capacity. The coloured segments illustrate different cost components like raw materials, pulp, chemicals, energy, labour, overhead, and credits.
The Philippines, Indonesia, Malaysia, Vietnam, and Thailand are low-cost producers, but their cost structures vary. Indonesia has high fibre costs but low energy expenses. Australia, Japan, the United States, and Taiwan have higher production costs, with Japan, Malaysia, and Taiwan experiencing particularly high energy costs.
Figure 12 illustrates the relative average viability of the comparison country set of tissue machines. This FisherSolve algorithm employs estimated capital requirements, cash production costs, machine size, technical age, grade risk in the local economy, internal company risk, manufacturing competitiveness of the area, tons per unit trim, and export destination charges. Indonesia and Vietnam hold the most viable positions in Southeast Asia. Meanwhile, Malaysia, the Philippines, Taiwan, and Japan have significantly lower viability scores for their tissue capacity. This indicates that they would be at risk if either Indonesia or Vietnam were to expand their capacity.
Figure 13 compares the energy usage for tissue production in energy consumption units as GJ/FMT. Vietnam is relatively efficient in energy usage, but the carbon content of that energy is high, as shown in Figure 14. The United States uses the most energy per ton globally due to low energy costs and product design variables. Some differences can be seen in the bar segments near the top for the United States, Australia, and Taiwan due to their access to natural gas. Vietnam and the other countries use the number 2 fuel oil.
Vietnam’s tissue production sector stands out for its relatively efficient energy usage, as shown in Figure 13. However, this efficiency comes at an environmental cost due to the high carbon content of its energy sources, further detailed in Figure 14. The reliance on number 2 fuel oil, shared by Vietnam and neighbouring countries, contrasts sharply with the cleaner energy sources accessed by nations like the United States, Australia, and Taiwan, which benefit from natural gas availability.
Figure 14 illustrates Scope 1 (on-site fuel) and Scope 2 (electricity) carbon emissions per the ton of finished tissue produced. The data indicates that Vietnam’s emissions are average, due to low electric grid carbon (Scope 2) balancing out high carbon emissions (Scope 1) from fuel oil burned onsite. Vietnam has the highest amount of electrical energy produced on-site. Perhaps the increased fuel oil is used for electrical generation. Indonesia demonstrates very low scope one emissions and relatively high scope two emissions, suggesting that some onsite process steam comes from renewable energy generated as a byproduct of the newer pulp mills. This is a potential opportunity for Vietnam to integrate tissue and fibre production and reduce costs and carbon emissions. As Vietnam continues to expand its tissue-making capacity, addressing these energy and environmental challenges will be critical to ensuring its long-term viability and growth.
Vietnam’s tissue industry
Vietnam is emerging as a low-cost and viable producer of tissue products in Southeast Asia. Key points include:
Production Costs: Vietnam, along with Indonesia, Malaysia, the Philippines, and Thailand, is classified as a low-cost tissue producer. However, cost structures vary among these nations.
Viability: Vietnam and Indonesia are the most viable in terms of tissue machine competitiveness, with other countries, such as Malaysia and Taiwan, facing higher risks if Vietnam or Indonesia expand their capacity.
Energy Efficiency: Vietnam shows relative efficiency in energy usage (measured in GJ/FMT) but relies heavily on number 2 fuel oil, resulting in high carbon content in its energy mix compared to nations like the United States and Australia, which utilise cleaner natural gas.
Carbon Emissions: Vietnam’s carbon emissions are balanced between Scope 1 (onsite fuel) and Scope 2 (electricity from the grid). Integrating tissue and fibre production has the potential to reduce costs and emissions.
Despite its strengths, Vietnam faces challenges with environmental impacts, high carbon content in energy sources, and the need for strategic innovation to maintain its competitive edge.
A detailed understanding of tissue producers and their individual machines is crucial for analysing the competitive landscape. This article presents an overview of the current tissue industry in Vietnam. Fluctuations in fibre prices, exchange rates, and environmental regulations create both opportunities and challenges for industry participants. Moreover, changes in ownership and consolidations are expected to persist among tissue mills in Vietnam, while investments in tissue-making capacity from neighbouring countries may impact imports and exports.
