Scrap import tightening causes material shortage for businesses

SGGP
Many businesses including those in packing, paper and plastics fields have been short of material for production and in the danger of shutdown after the Government tightened scrap import.

Xuan Mai paper plant (Photo: SGGP)

Xuan Mai paper plant (Photo: SGGP)

They have many times sent documents to authorized agencies, proposing them to solve administrative procedures difficulties to import scrap as a material source for production without respond.
Chairman of Vietnam Plastics Association Ho Duc Lam said that about 5,000 containers worth US$10,000 each are stuck at ports. Businesses have to pay US$50-100 demurrage charge a day, suffered production stagnancy and behind schedule goods delivery. These all distressed them and put them in the danger of bankruptcy.
Secretary general of Vietnam Pulp and Paper Association Dang Van Son said that the import tightening has much damaged paper industry because businesses now have to import 100 percent of scrap paper to have materials for production.
Mr. Tran Van Nguyen, director of Hoang Nguyen Plastics Company in Binh Tan district, said that the company has signed goods supply contracts for the entire 2018. Currently the company has been short of goods for delivery because of material shortage while domestic recycled plastics could not be used because of low quality.
Import licenses of some packing and paper firms have been out of date for over three months but authorized agencies have yet to relicense them, severely affecting production.
The import tightening has come after many containers were found contain waste not in line with import registration regulations.
Businesses said that they agreed with the Government’s policy of not changing environment for economic development but they proposed to have solutions for genuine enterprises to continue importing scrap as materials for production.
In fact, plastics is one of the highest growth industries in Vietnam. The industry grows 15-20 percent a year for the last ten years but imports up to 80 percent of materials.
Vietnam Pulp and Paper Association said that 70 percent of Vietnam’s paper output is made from scrap. Of these, nearly 40 percent is supplied domestically and the remaining amount must be imported.
The country is expected to collect 1.4 million tons of scrap paper domestically, import 2.19 million tons this year. The import volume is predicted to approximate 9,000 tons by 2025.
Expert said that the government’s sudden scrap import tightening would put businesses in the defensive and send their production to a stagnancy.
Therefore, they proposed the Government to review and adjust standards on scrap import to ensure material source for production and less harm the environment. Besides there should be policies to assist and encourage businesses to invest in environmentally friendly production technologies.

By LAC PHONG – Translated by Hai Mien

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