Notes

Vietnam wood pellet production as well as exports<br>
In the past 7 years, Vietnam timber pellet export expands from no to around 2.75 million tons yearly, with most to Korea and also Japan. But as the cost advantage lessen, will it remain to grow? What's the trend of Vietnam wood pellet sector?



John Swan, a procedure expert that has actually been directing the style and also devices selection for new pellet plants in Vietnam, evaluated the current scenario and future fad of Vietnam wood pellet export.



Vietnam wood pellet manufacturing benefits from low cost

Timber pellets in Vietnam are primarily made of the by-products of furnishings manufacturing. These sawdust has reduced moisture content and also small dimension. Many very early timber pellet factories do not require drying out or squashing equipments. With low labor cost, they can conserve a large amount of production expense.



For a long period of time, there are a multitude of container cargos delivered from Korea to Vietnam and also only small quantities from Vietnam to Korea. Wood pellet makers can use the excess empty container for shipment at inexpensive. The transport price is less than $10 per load.



Vietnam wood pellet production cost will certainly climb

The shipping cost is mosting likely to climb. The quick development of cargos from Vietnam to Korea reduce the excess containers. The delivery cost will certainly rise to $20/ton from Vietnam to Japan.



The raw product price is going to climb. The furnishings manufacture in Vietnam rise from 2.1 million lots to 7.2 million heaps in the past one decade, with the yearly development price of 13%. By comparison, the timber pellet export enhances from 160,000 to 2.46 million tons, with the annual growth rate of 61%. So the need for furniture handling waste development a lot greater than the supply.



To broaden production, Vietnam manufacturers will progressively rely upon woodland residuals as well as logs. These materials cost higher as well as require peeling, chipping, crushing as well as drying for making pellets. So the marginal cost will certainly rise.



Vietnam wood pellet export rate will boost

A lot of Vietnam's timber pellets are exported to Korea as well as Japan.



In the chart below, the environment-friendly line reveals the weighted rate of the leading 6 wood pellet providers to Korea, as well as the red line reveals the price of Vietnam wood pellets. As poultry feed machine price domains the Korea timber pellet market, other 5 providers only use up less than 20% market share. We can locate that the growth of Vietnam wood pellet rate rises the ordinary heavy cost.




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



The development of Vietnam wood pellet sector is limited

We can assess the growth possible based upon the manufacturing strength of a specific location. It refers to the total wood pellet production divided by the production location. The manufacturing area does not consists of the land that is not forested or is not offered for tree harvesting.



According to statistics, Vietnam wood pellet manufacturing proliferates, with the manufacturing strength from 8ton/squre km to 13.4 ton/squre kilometres. It has surpass the largest timber pellet production states in America, Georgia and also north Carolina.



This step doesn't make up other sectors depending upon forestry resources, like paper mills and also wood products mills. Some locations have big readily available forestry location but low pellet manufacturing strength. They might be prospects for brand-new wood pellet export capacity.




In all areas, the very first batch of wood pellet manufacturing facilities have the best mix of raw material distribution expense and mill-to-port logistics, while brand-new manufacturing facilities do not have these advantages. Their price of basic materials as well as logistic is higher than existing factories. Compared to America and also Canada, Vietnam don't have big areas of prospective forestry.



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

With more wood pellet plants are built in Vietnam, their competition on basic materials will certainly raise. With the rise of production expense, the wood pellet price will expand and also approach the global market equilibrium rate. During that time, the dimension of the Vietnam pellet export sector will certainly support.



There will certainly be combination in Vietnam timber pellet market. Preponderant producers will obtain strong and also well-located plants, as well as the much less competitive plants will close.



Freshly constructed wood pellet plants will embrace world-class layout, devices, and procedures. richi pellet machine will certainly make high-quality timber pellets with sustainable sources.



The capability of Vietnam wood pellet manufacturers is going to match with long-term arrangements. richi pellet mill will export timber pellets to Japan according to lasting supply contracts, and also Korea policy will progress to support long-lasting supply agreements.


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