Notes

Vietnam wood pellet production and also exports<br>
In the past 7 years, Vietnam timber pellet export expands from no to around 2.75 million lots annually, with the majority of to Korea and Japan. However as the rate benefit decrease, will it continue to grow? What's the pattern of Vietnam wood pellet sector?



John Swan, an operation professional who has been guiding the layout and also equipment selection for new pellet plants in Vietnam, evaluated the existing scenario and also future trend of Vietnam wood pellet export.



Vietnam timber pellet manufacturing take advantage of affordable

Timber pellets in Vietnam are mostly made from the by-products of furniture manufacturing. These sawdust has low moisture content and also tiny dimension. So many early wood pellet manufacturing facilities do not require drying out or crushing equipments. With reduced labor price, they can save a large amount of manufacturing cost.



For a very long time, there are a lot of container freights delivered from Korea to Vietnam and also only small quantities from Vietnam to Korea. Wood pellet suppliers can take advantage of the excess vacant container for delivery at low cost. The transport cost is lower than $10 per lot.



Vietnam timber pellet manufacturing cost will increase

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



The raw product expense is mosting likely to climb. The furnishings manufacture in Vietnam boost from 2.1 million tons to 7.2 million bunches in the past 10 years, with the annual growth rate of 13%. By comparison, the wood pellet export boosts from 160,000 to 2.46 million bunches, with the yearly growth rate of 61%. So the need for furniture handling waste growth much more than the supply.



To increase production, Vietnam suppliers will progressively count on woodland residuals and also logs. These products cost greater as well as require peeling off, cracking, crushing as well as drying for making pellets. So the low expense will rise up.




Vietnam timber pellet export rate will certainly enhance

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



In the graph below, the green line shows the heavy price of the top 6 wood pellet vendors to Korea, as well as the red line shows the price of Vietnam wood pellets. As Vietnam domains the Korea timber pellet market, various other 5 distributors only use up less than 20% market share. We can find that the growth of Vietnam wood pellet rate pushes up the average heavy price.



Japan timber pellet market additionally reflect the rise of Vietnam timber pellet rate. A lot of Japan's timber pellets are imported from Canada as well as Vietnam, with Canada using up 65% -70%. krone straw pellet machine shows the weighted rate of Canada and also Vietnam timber pellet export. The red line reveals Vietnam's timber pellet export rate rebound.



The development of Vietnam timber pellet industry is limited

We can evaluate the development possible based on the production strength of a specific area. It refers to the overall timber pellet manufacturing separated by the production area. The production location does not includes the land that is not forested or is not readily available for tree harvesting.



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



This step does not account for various other markets depending upon forestry sources, like paper mills and timber items mills. Some locations have large available forestry location but low pellet production intensity. They may be candidates for new timber pellet export capability.



In all locations, the initial batch of timber pellet manufacturing facilities have the best combination of basic material delivery expense and also mill-to-port logistics, while new manufacturing facilities don't have these benefits. Their cost of raw materials and logistic is higher than existing manufacturing facilities. Compared with America and also Canada, Vietnam don't have large areas of prospective forestry.



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

With even more wood pellet plants are constructed in Vietnam, their competition on resources will certainly raise. With the rise of production price, the wood pellet price will expand and come close to the international market stability cost. During that time, the size of the Vietnam pellet export market will maintain.



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



Recently built wood pellet plants will adopt world-class design, equipment, and operations. They will certainly make high-quality timber pellets with sustainable resources.




The ability of Vietnam wood pellet producers is mosting likely to match with lasting contracts. Extra producers will certainly export timber pellets to Japan according to long-term supply arrangements, as well as Korea policy will certainly advance to sustain lasting supply contracts.


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