Notes

Vietnam timber pellet production and exports<br>
In the past 7 years, Vietnam timber pellet export grows from zero to around 2.75 million tons every year, with most to Korea as well as Japan. Yet as the price advantage decrease, will it remain to grow? What's the trend of Vietnam wood pellet sector?



John Swan, an operation specialist who has been directing the layout and equipment option for brand-new pellet plants in Vietnam, evaluated the present scenario and future fad of Vietnam timber pellet export.



Vietnam wood pellet production gain from low cost

Timber pellets in Vietnam are mainly made of the byproducts of furnishings manufacturing. These sawdust has reduced wetness material as well as small size. Numerous very early wood pellet factories do not need drying out or crushing equipments. With low labor price, they can conserve a large amount of manufacturing expense.



For a long period of time, there are a great deal of container freights delivered from Korea to Vietnam and also only small quantities from Vietnam to Korea. Timber pellet manufacturers can use the excess empty container for delivery at inexpensive. The transport price is less than $10 per bunch.



Vietnam timber pellet manufacturing cost will rise

The shipping cost is mosting likely to climb. homemade wood pellet maker of cargos from Vietnam to Korea lower the excess containers. The shipping expense will rise to $20/ton from Vietnam to Japan.



The raw material price is going to climb. The furnishings manufacture in Vietnam increase from 2.1 million tons to 7.2 million lots in the past ten years, with the annual growth price of 13%. By comparison, the wood pellet export boosts from 160,000 to 2.46 million bunches, with the yearly development rate of 61%. So the demand for furniture handling waste development much greater than the supply.



To increase production, Vietnam suppliers will significantly rely upon forest residuals and logs. These products cost greater as well as require peeling off, damaging, squashing and also drying out for making pellets. So the low cost will rise up.



Vietnam wood pellet export price will increase

The majority of Vietnam's wood pellets are exported to Korea and also Japan.



In the chart below, the eco-friendly line shows the weighted price of the top 6 timber pellet vendors to Korea, and the red line reveals the rate of Vietnam timber pellets. As Vietnam domains the Korea wood pellet market, other 5 vendors only occupy less than 20% market share. We can locate that the development of Vietnam timber pellet rate pushes up the typical heavy rate.




Japan timber pellet market likewise show the rise of Vietnam wood pellet rate. The majority of Japan's timber pellets are imported from Canada and Vietnam, with Canada taking up 65% -70%. The environment-friendly line reveals the heavy cost of Canada and also Vietnam wood pellet export. The red line shows Vietnam's wood pellet export rate rebound.



The development of Vietnam timber pellet sector is limited

We can examine the development potential based upon the production strength of a certain area. It describes the complete timber pellet production split by the manufacturing area. The production area doesn't consists of the land that is not forested or is not readily available for tree harvesting.



According to stats, Vietnam timber pellet manufacturing proliferates, with the production strength from 8ton/squre kilometres to 13.4 ton/squre km. small feed processing machine has surpass the largest timber pellet production states in America, Georgia as well as north Carolina.



This action does not account for other sectors relying on forestry resources, like paper mills as well as timber items mills. Some areas have huge offered forestry area however reduced pellet manufacturing intensity. They might be prospects for brand-new timber pellet export ability.



In all locations, the very first batch of wood pellet manufacturing facilities have the most effective combination of basic material distribution expense and mill-to-port logistics, while new manufacturing facilities don't have these benefits. Their price of basic materials as well as logistic is higher than existing factories. Compared to America as well as Canada, Vietnam do not have large locations of potential forestry.



What's the future of wood pellet export in Vietnam?

With even more timber pellet plants are integrated in Vietnam, their competitors on basic materials will enhance. With the increase of manufacturing expense, the wood pellet cost will grow and approach the global market balance cost. At that time, the dimension of the Vietnam pellet export market will maintain.




There will be combination in Vietnam timber pellet sector. Superior manufacturers will certainly acquire well-built as well as well-located plants, and the less competitive plants will certainly shut.



Newly built timber pellet plants will adopt first-rate style, devices, and also operations. They will certainly make premium timber pellets with sustainable resources.



The capacity of Vietnam timber pellet producers is mosting likely to match with lasting agreements. A lot more manufacturers will certainly export wood pellets to Japan according to lasting supply arrangements, and Korea policy will certainly develop to support lasting supply contracts.


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