Notes

Vietnam wood pellet manufacturing and exports<br>
In the past 7 years, Vietnam wood pellet export grows from zero to around 2.75 million tons yearly, with most to Korea and also Japan. However as the price benefit diminish, will it continue to grow? What's the pattern of Vietnam wood pellet industry?



John Swan, an operation professional that has been directing the design and also tools choice for brand-new pellet plants in Vietnam, examined the present circumstance as well as future trend of Vietnam timber pellet export.




Vietnam wood pellet manufacturing take advantage of low cost

Wood pellets in Vietnam are primarily made from the by-products of furniture manufacturing. These sawdust has reduced moisture material and also small size. So many very early timber pellet factories do not need drying out or squashing equipments. With low labor expense, they can conserve a lot of production expense.



For a long time, there are a lot of container cargos delivered from Korea to Vietnam as well as only small quantities from Vietnam to Korea. Wood pellet makers can utilize the excess vacant container for delivery at low cost. The transport expense is less than $10 per lot.



Vietnam wood pellet production cost will climb

The delivery cost is mosting likely to increase. The rapid growth of freights from Vietnam to Korea decrease the excess containers. The delivery price will certainly rise to $20/ton from Vietnam to Japan.



The raw material cost is mosting likely to climb. chicken litter pellets processing machine in Vietnam rise from 2.1 million tons to 7.2 million lots in the past 10 years, with the yearly growth rate of 13%. By comparison, the wood pellet export boosts from 160,000 to 2.46 million bunches, with the yearly growth price of 61%. So the need for furnishings handling waste development a lot greater than the supply.



To increase manufacturing, Vietnam producers will significantly count on woodland residuals as well as logs. These materials cost greater and also need peeling off, cracking, squashing and also drying for making pellets. So the limited price will certainly rise.



Vietnam timber pellet export rate will certainly boost

A lot of Vietnam's wood pellets are exported to Korea and Japan.



In the chart below, the environment-friendly line reveals the weighted rate of the leading 6 wood pellet distributors to Korea, and the red line shows the cost of Vietnam timber pellets. As Vietnam domain names the Korea timber pellet market, other 5 vendors just take up less than 20% market share. We can locate that the growth of Vietnam wood pellet price rises the average heavy rate.



Japan timber pellet market likewise show the surge of Vietnam wood pellet price. Most of Japan's wood pellets are imported from Canada and Vietnam, with Canada occupying 65% -70%. The green line reveals the weighted price of Canada as well as Vietnam timber pellet export. The red line shows Vietnam's wood pellet export rate rebound.




The growth of Vietnam timber pellet market is limited

We can examine the growth potential based upon the manufacturing strength of a certain area. It refers to the total wood pellet production divided by the production area. The production area doesn't consists of the land that is not forested or is not available for tree harvesting.



According to stats, Vietnam timber pellet production grows rapidly, with the production strength from 8ton/squre kilometres to 13.4 ton/squre km. home made pellet machine has exceed the largest wood pellet manufacturing states in America, Georgia and north Carolina.



This action does not account for various other markets depending on forestry resources, like paper mills and wood products mills. Some locations have large offered forestry area however reduced pellet production strength. They might be candidates for brand-new timber pellet export capability.



In all areas, the first set of timber pellet factories have the very best mix of raw material shipment cost and mill-to-port logistics, while new manufacturing facilities do not have these advantages. Their cost of resources and also logistic is more than existing factories. Compared with America and also Canada, Vietnam don't have huge areas of potential forestry.



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

With more wood pellet plants are built in Vietnam, their competition on resources will boost. With the rise of manufacturing price, the wood pellet rate will grow and also come close to the international market equilibrium price. Back then, the size of the Vietnam pellet export field will maintain.



There will be combination in Vietnam timber pellet industry. Preponderant suppliers will get strong and well-located plants, as well as the much less competitive plants will shut.



Newly developed wood pellet plants will take on first-rate layout, tools, and also procedures. They will make premium wood pellets with sustainable sources.



The capability of Vietnam timber pellet producers is mosting likely to match with long-term agreements. Extra manufacturers will certainly export wood pellets to Japan according to long-term supply contracts, and Korea policy will certainly advance to sustain long-term supply agreements.


Read More: https://gaininggroundsummit.com/hardwood-pellet-mill/