Notes

Vietnam timber pellet production and exports<br>
In the past 7 years, Vietnam timber pellet export expands from absolutely no to around 2.75 million heaps each year, with a lot of to Korea as well as Japan. However as the price benefit lessen, will it continue to grow? What's the fad of Vietnam wood pellet industry?



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



Vietnam timber pellet manufacturing take advantage of affordable


Wood pellets in Vietnam are generally constructed from the by-products of furnishings manufacturing. These sawdust has reduced moisture content as well as little dimension. Many very early wood pellet manufacturing facilities don't require drying or crushing equipments. With low labor price, they can conserve a lot of manufacturing cost.



For a very long time, there are a large number of container freights delivered from Korea to Vietnam as well as just small quantities from Vietnam to Korea. Timber pellet manufacturers can use the excess empty container for shipment at affordable. The transportation expense is lower than $10 per load.




Vietnam timber pellet manufacturing expense will rise

The shipping cost is mosting likely to rise. The fast growth of cargos from Vietnam to Korea reduce the excess containers. The shipping expense will certainly rise to $20/ton from Vietnam to Japan.



The raw product price is mosting likely to climb. The furniture manufacture in Vietnam increase from 2.1 million tons to 7.2 million loads in the past 10 years, with the yearly growth rate of 13%. By contrast, the wood pellet export enhances from 160,000 to 2.46 million heaps, with the yearly growth price of 61%. So richi pellet machine for furniture processing waste development much higher than the supply.



To increase production, Vietnam producers will significantly rely upon forest residuals and also logs. Richi machine set you back greater and also require peeling off, breaking, squashing and also drying out for making pellets. So the minimal price will rise.



Vietnam timber pellet export rate will certainly enhance

Most of Vietnam's wood pellets are exported to Korea as well as Japan.



In the chart below, the environment-friendly line reveals the heavy price of the leading 6 wood pellet suppliers to Korea, and the red line reveals the price of Vietnam timber pellets. As Vietnam domain names the Korea timber pellet market, various other 5 suppliers just take up less than 20% market share. We can find that the growth of Vietnam timber pellet cost raises the typical weighted price.



Japan timber pellet market likewise mirror the rise of Vietnam timber pellet rate. The majority of Japan's timber pellets are imported from Canada and Vietnam, with Canada occupying 65% -70%. The eco-friendly line reveals the heavy cost of Canada and also Vietnam timber pellet export. The red line reveals Vietnam's timber pellet export price rebound.



The growth of Vietnam wood pellet industry is restricted

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



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



This action does not represent various other sectors relying on forestry resources, like paper mills and also timber products mills. Some locations have big offered forestry location however low pellet production intensity. They may be candidates for brand-new timber pellet export ability.



In all areas, the very first batch of timber pellet factories have the very best mix of basic material shipment expense and mill-to-port logistics, while brand-new factories don't have these benefits. Their expense of basic materials and logistic is greater than existing factories. Compared to America and also Canada, Vietnam do not have huge areas of possible forestry.



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

With more wood pellet plants are built in Vietnam, their competition on basic materials will increase. With the increase of production price, the wood pellet cost will grow and also approach the international market balance price. Back then, the size of the Vietnam pellet export industry will certainly stabilize.



There will certainly be consolidation in Vietnam timber pellet sector. Superior suppliers will obtain durable and well-located plants, and also the much less affordable plants will certainly shut.



Newly constructed wood pellet plants will take on world-class layout, devices, and operations. They will make high-grade wood pellets with lasting resources.



The capacity of Vietnam timber pellet producers is going to match with long-lasting arrangements. Much more manufacturers will export wood pellets to Japan according to long-term supply arrangements, as well as Korea plan will certainly progress to sustain long-term supply arrangements.


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