Notes

Vietnam wood pellet manufacturing and exports<br>
In the past 7 years, Vietnam wood pellet export grows from no to around 2.75 million lots each year, with many to Korea as well as Japan. But as cattle pellet machine lessen, will it continue to expand? What's the fad of Vietnam wood pellet sector?



John Swan, an operation expert who has actually been guiding the layout and equipment option for new pellet plants in Vietnam, analyzed the current circumstance and also future pattern of Vietnam wood pellet export.



Vietnam timber pellet manufacturing benefits from low cost

Wood pellets in Vietnam are mostly made of the by-products of furnishings manufacturing. These sawdust has low wetness material as well as small size. A lot of early timber pellet manufacturing facilities don't require drying or crushing makers. With reduced labor expense, they can conserve a good deal of production cost.




For a long time, there are a great deal of container freights 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 delivery at inexpensive. The transportation expense is less than $10 per ton.



Vietnam timber pellet production cost will rise

The shipping cost is mosting likely to rise. The quick growth of freights from Vietnam to Korea minimize the excess containers. The shipping expense will rise to $20/ton from Vietnam to Japan.



The raw material expense is mosting likely to climb. The furniture manufacture in Vietnam boost from 2.1 million loads to 7.2 million heaps in the past one decade, with the annual growth rate of 13%. By contrast, the wood pellet export boosts from 160,000 to 2.46 million tons, with the yearly development price of 61%. So the demand for furnishings handling waste growth a lot higher than the supply.



To increase production, Vietnam suppliers will progressively depend on forest residuals as well as logs. These products cost greater and also require peeling, damaging, crushing and also drying for making pellets. So the limited price will rise.



Vietnam timber pellet export price will enhance

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



In the chart below, the eco-friendly line shows the weighted price of the top 6 wood pellet vendors to Korea, and also the red line shows the price of Vietnam timber pellets. As pellet crumbler , other 5 providers only take up less than 20% market share. We can find that the growth of Vietnam timber pellet cost rises the average weighted cost.



Japan timber pellet market likewise show the rise of Vietnam wood pellet rate. The majority of Japan's wood pellets are imported from Canada as well as Vietnam, with Canada occupying 65% -70%. The environment-friendly line reveals the heavy price of Canada as well as Vietnam timber pellet export. The red line reveals Vietnam's wood pellet export price rebound.



The development of Vietnam wood pellet sector is limited

We can evaluate the growth prospective based on the manufacturing strength of a certain location. It refers to the overall wood pellet manufacturing divided by the production area. The production location doesn't includes the land that is not forested or is not available for tree harvesting.



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



This measure doesn't make up various other markets depending on forestry sources, like paper mills and timber items mills. Some areas have huge offered forestry area but low pellet manufacturing intensity. They may be prospects for new wood pellet export capacity.




In all locations, the first batch of timber pellet factories have the very best combination of resources delivery price and mill-to-port logistics, while new factories don't have these advantages. Their expense of raw materials as well as logistic is greater than existing manufacturing facilities. Compared to America as well as Canada, Vietnam do not have big areas of potential forestry.



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

With more wood pellet plants are constructed in Vietnam, their competition on raw materials will certainly enhance. With the increase of production price, the timber pellet rate will expand as well as come close to the international market balance price. During that time, the dimension of the Vietnam pellet export sector will maintain.



There will certainly be combination in Vietnam timber pellet sector. Superior producers will certainly acquire strong and well-located plants, as well as the much less affordable plants will certainly shut.



Recently built timber pellet plants will certainly embrace first-rate style, devices, and procedures. They will make premium wood pellets with sustainable sources.



The capacity of Vietnam wood pellet producers is mosting likely to match with lasting arrangements. More manufacturers will certainly export timber pellets to Japan according to lasting supply arrangements, and also Korea plan will progress to support long-lasting supply arrangements.


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