Notes

Vietnam timber pellet manufacturing as well as exports<br>
In the past 7 years, Vietnam timber pellet export expands from absolutely no to around 2.75 million tons each year, with the majority of to Korea and Japan. Yet as the rate benefit lessen, will it continue to grow? What's the trend of Vietnam wood pellet market?



John Swan, an operation expert who has been directing the layout and tools option for new pellet plants in Vietnam, analyzed the present scenario and also future pattern of Vietnam wood pellet export.



Vietnam wood pellet manufacturing gain from inexpensive

Timber pellets in Vietnam are mainly constructed from the byproducts of furnishings manufacturing. These sawdust has low wetness web content and also small dimension. So many very early timber pellet factories do not require drying or squashing equipments. With low labor expense, they can conserve a good deal of manufacturing price.



For a long period of time, there are a lot of container cargos delivered from Korea to Vietnam and only small quantities from Vietnam to Korea. Wood pellet makers can take advantage of the excess empty container for shipment at affordable. The transport cost is lower than $10 per bunch.



Vietnam wood pellet manufacturing expense will rise

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



The raw material expense is going to climb. The furniture manufacture in Vietnam rise from 2.1 million loads to 7.2 million bunches in the past ten years, with the yearly growth price of 13%. By hops pelletizer machine for sale , the timber pellet export raises from 160,000 to 2.46 million loads, with the annual development rate of 61%. So the demand for furnishings handling waste development much higher than the supply.



To expand manufacturing, Vietnam makers will progressively rely upon forest residuals as well as logs. These products set you back higher as well as need peeling, breaking, squashing and also drying out for making pellets. So the marginal price will rise.



Vietnam timber pellet export cost will raise

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



In the chart below, the green line shows the weighted cost of the leading 6 timber pellet providers to Korea, and the red line shows the cost of Vietnam wood pellets. As Vietnam domain names the Korea wood pellet market, other 5 suppliers only occupy less than 20% market share. We can find that the growth of Vietnam wood pellet price raises the ordinary heavy price.



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



The development of Vietnam wood pellet market is restricted

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




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



This measure doesn't represent various other industries depending on forestry resources, like paper mills and timber items mills. Richi machine have big offered forestry location but reduced pellet manufacturing strength. They might be prospects for new wood pellet export capability.



In all areas, the first set of wood pellet manufacturing facilities have the best combination of raw material distribution cost and mill-to-port logistics, while new factories do not have these advantages. Their price of basic materials and also logistic is higher than existing factories. Compared with America and Canada, Vietnam do not have big areas of possible forestry.



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

With more wood pellet plants are built in Vietnam, their competitors on basic materials will certainly raise. With the increase of manufacturing price, the wood pellet cost will grow and also approach the international market stability cost. Back then, the dimension of the Vietnam pellet export industry will certainly support.



There will certainly be loan consolidation in Vietnam timber pellet sector. Preponderant makers will certainly obtain well-built as well as well-located plants, and also the less affordable plants will close.



Newly constructed timber pellet plants will certainly adopt world-class style, tools, and also procedures. They will make high-grade timber pellets with sustainable sources.



The capability of Vietnam timber pellet manufacturers is going to match with lasting contracts. Extra producers will export wood pellets to Japan according to long-lasting supply arrangements, as well as Korea plan will advance to sustain long-term supply arrangements.



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