1. Introduction
The demand for wood pellets in the world market is increasing sharply. The main reason is the Russia-Ukraine conflict that has caused the loss of gas supply from Russia to EU countries. The demand for quantity and price per unit of product has increased, which is a driving force to expand domestic production. However, domestic production is not as favorable as expected. Although the input materials for wood pellet production are more diverse than wood chips, including by-products of the wood industry, the wood pellet industry is having to compete for raw materials with other parts of the wood industry, especially raw materials for wood chips. The high export price of wood chips has led to an increase in the price of wood input materials. Wood pellet production companies with long-term contracts signed with importers, especially Japanese importers with non-adjustable output prices, are under pressure to increase raw material prices.
In addition, the Vietnamese Government has recently taken steps to consider applying export tax on wood pellets (currently at 0%). These factors are directly affecting the production and business situation of the parties participating in the current wood pellet supply chain.
2. Wood pellet export ports
Wood pellets are mainly cleared through seaports near provinces and cities with developed wood processing industries such as Binh Dinh, Ho Chi Minh City and Dong Nai.
Quy Nhon and Cat Lai ports are the ports with the largest export volume of wood pellets. The total export volume through these two ports accounts for 60-70% of the total export turnover of wood pellets in the country.
Quy Nhon and Cat Lai ports have the largest export volume of wood pellets, showing that the main source of raw materials for wood pellets is from by-products of the wood industry, where there are developed wood processing centers. Of these two ports, exports through Quy Nhon port have more raw materials for wood pellets from planted forests than wood pellets exported through Cat Lai port, because Quy Nhon area and neighboring areas such as Phu Yen and Quang Ngai currently have relatively large areas of planted forests.
3. Wood pellet exporting enterprises
The number of enterprises participating in wood pellet exports increased sharply in 2021.
Data from the General Department of Customs is calculated by the research team of wood associations and Forest Trends. The number of enterprises participating in exports has increased rapidly since 2021. In the first 6 months of 2022, the number of exporting enterprises increased sharply. The rapid increase in the number of enterprises participating in exports shows the attractiveness of this industry in the recent past.
4. Wood pellet production facilities
The number of wood pellet production facilities is much larger than that of exporting enterprises. According to information shared by a number of export enterprises, Vietnam currently has over 300 wood pellet production facilities. These facilities do not directly participate in the export stage but only participate in production. The output products of these facilities are the input source for export companies.
Most export companies have production factories. However, the amount of wood pellets produced by these factories is smaller than the amount exported. This means that export companies often have both production and trading activities.
In general, wood pellet production facilities are scattered in many different places. Some areas have a relatively long supply chain from input materials to export, so controlling the supply chain is not easy.
Note: The information in this article is for reference only and may change depending on the manufacturer and source of raw materials. For the most accurate information, you should consult experts, wood pellet suppliers or contact Overc.vn to answer your questions and problems related to wood pellets and wood chips.
Source:
- Goviet org
- Overc Team synthesise, analyse and write articles.
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OVERC was established in Vietnam, which has 17 FTA (Free Trade Agreement).
Vietnam is one of the countries with the most FTAs in the world.
Our main activities are manufacturing and distributing Wood Pellets and Wood Waste. Our wood pellet products, which are made from Acacia veneer residual 100% or wood waste (logs, sawdust, wood chips, wood shavings,…), have been exported to many countries around the world such as Japan, Korea, EU, etc.
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