Notes

Vietnam wood pellet production and exports
Vietnam wood pellet manufacturing and also exports
In the past 7 years, Vietnam wood pellet export grows from zero to around 2.75 million loads annually, with the majority of to Korea and Japan. But as the cost advantage diminish, will it remain to expand? What's the pattern of Vietnam timber pellet sector?

John Swan, an operation professional that has actually been directing the layout and equipment option for new pellet plants in Vietnam, assessed the present situation as well as future trend of Vietnam timber pellet export.

Vietnam wood pellet manufacturing gain from affordable
Timber pellets in Vietnam are mainly made of the spin-offs of furnishings manufacturing. These sawdust has low dampness material and little dimension. Many early wood pellet manufacturing facilities do not require drying out or crushing makers. With reduced labor expense, they can save a large amount of production expense.

For a long time, there are a multitude of container freights shipped from Korea to Vietnam and only small quantities from Vietnam to Korea. Timber pellet makers can use the excess vacant container for shipment at low cost. The transportation expense is less than $10 per ton.

Vietnam timber pellet manufacturing expense will certainly climb
The delivery expense is mosting likely to rise. The quick growth of cargos from Vietnam to Korea reduce the excess containers. The delivery price will rise to $20/ton from Vietnam to Japan.

The raw material price is going to rise. The furnishings manufacture in Vietnam boost from 2.1 million bunches to 7.2 million lots in the past one decade, with the yearly growth price of 13%. By comparison, the timber pellet export enhances from 160,000 to 2.46 million lots, with the yearly development price of 61%. So the need for furnishings processing waste development much more than the supply.


To broaden manufacturing, Vietnam manufacturers will progressively rely upon woodland residuals as well as logs. These materials cost greater and also require peeling, damaging, crushing and drying out for making pellets. So the marginal expense will rise up.

Vietnam wood pellet export price will boost
Most of Vietnam's wood pellets are exported to Korea and Japan.

In the graph below, the environment-friendly line shows the heavy cost of the top 6 wood pellet suppliers to Korea, and the red line shows the cost of Vietnam wood pellets. As Vietnam domain names the Korea timber pellet market, various other 5 providers just take up less than 20% market share. We can locate that the development of Vietnam wood pellet cost rises the average heavy cost.

fish feed making machine low price of Vietnam wood pellet cost. Most of Japan's wood pellets are imported from Canada and Vietnam, with Canada occupying 65% -70%. The green line reveals the weighted rate of Canada and also Vietnam timber pellet export. The red line reveals Vietnam's wood pellet export cost rebound.

The growth of Vietnam wood pellet industry is limited
We can examine the growth potential based upon the production strength of a specific location. It refers to the overall timber pellet manufacturing split by the manufacturing location. The manufacturing area doesn't consists of the land that is not forested or is not available for tree harvesting.


According to data, Vietnam wood pellet production proliferates, with the manufacturing strength from 8ton/squre kilometres to 13.4 ton/squre kilometres. It has go beyond the biggest timber pellet manufacturing states in America, Georgia as well as north Carolina.

This step doesn't account for various other industries relying on forestry sources, like paper mills and also timber items mills. Some areas have big available forestry location however reduced pellet production intensity. cattle feed pellet mill might be candidates for brand-new timber pellet export capability.

In all areas, the very first batch of wood pellet manufacturing facilities have the most effective combination of basic material shipment expense as well as mill-to-port logistics, while brand-new factories do not have these advantages. Their expense of raw materials and also logistic is greater than existing factories. Compared to America and also Canada, Vietnam don't have huge locations of possible forestry.

What's the future of timber pellet export in Vietnam?
With more timber pellet plants are built in Vietnam, their competition on resources will certainly increase. With the rise of production price, the wood pellet cost will certainly expand and approach the worldwide market balance rate. Back then, the size of the Vietnam pellet export industry will certainly stabilize.

There will be debt consolidation in Vietnam wood pellet market. Superior producers will get sturdy as well as well-located plants, as well as the much less competitive plants will certainly close.

Freshly built wood pellet plants will embrace world-class design, tools, as well as procedures. They will make top notch timber pellets with lasting sources.

The capability of Vietnam wood pellet producers is going to match with long-term agreements. Extra producers will export timber pellets to Japan according to lasting supply arrangements, and also Korea policy will certainly advance to support lasting supply arrangements.


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