Mr. Hoang Trung Son, General Director of Dong Tien Paper Company, and Chairman of Vietnam Pulp and Paper Association (VPPA)
Vietnam’s economy and development goals: 20 years of rapid growth
Vietnam has experienced two decades of remarkable development, becoming one of the most dynamic economies in Asia.
GDP growth
GDP size has increased more than eight times in 20 years.
Average growth of 6 – 7% annually, which is amongst the highest in Asia.
Vietnam’s GDP scale (2005–2025)
Expected GDP 2025 – $510bn
Vietnam has experienced a strong recovery after the Covid-19 pandemic: from 2020 – 2025 (CAGR +8.03%).
Vietnam’s national target for the next decade: annual GDP growth of 10% or more.
Southeast Asia’s tissue and towel markets: Vietnam’s strong growth
Vietnam’s GDP has risen to 32nd place in the world and fourth in the ASEAN region. HSBC Bank has raised its forecast for Vietnam’s GDP growth in 2025 to 7.9% (previously it was forecast at 6.6%).
Experts forecast Vietnam’s GDP growth in 2025 to be between 8.2-8.5%.
Vietnam tourism: recovery and prospects
Before the pandemic, Vietnam recorded a peak of 18.0m international visitors (2019). Recovery after the pandemic in 2023 was 12.6m international visitors. In 2024, the country then returned to peak levels, recording 17.6 million international visitors in 2024.
The target for 2023 is aimed at 20 million international visitors.
International tourist arrivals are forecast to grow steadily at 6 – 8% per year in 2025 – 2030.
E-commerce: a driver for digital growth
Large market – 2024 revenue was $24–28bn.
(VECOM / PaymentsCMI / Mordor Intelligence)
Rapid Growth – growing >20% per year over the past 10 years. Top five in Southeast Asia.
2030 Target – Forecast to reach around $60–65bn.
(VECOM / PaymentsCMI / Mordor Intelligence)
Key drivers: a young population, high internet speeds, and smartphone penetration
National goals on digital transformation and green transformation include:
1/ Digital transformation
1.1. Target 2030
Total factor productivity (TFP) contributes over 55% to GDP growth;
Digital economy accounts for at least 30% of GDP; over 40% of enterprises have innovation activities;
International position: Top three in Southeast Asia, Top 50 globally in digital competitiveness.
Investment in science and technology: spending on R&D reaches 2% of GDP; socialisation accounts for > 60%; annual state budget spending on science and technology – digital transformation ≥ 3%.
1.2. Target 2045
Digital economy ≥ 50% of GDP
Top 30 globally in innovation and digital transformation.
2/ Green transformation
Implemented in parallel with digital transformation (ESG practice); Currently, there are 2,166 enterprises under Decision 13/2024/QD-TTg issued by the Prime Minister that must conduct greenhouse gas inventories, of which the Paper and Pulp industry alone has 80 enterprises.
Digital transformation and green transformation with Vietnam’s paper industry: current status of Vietnam’s paper industry on dual transformation
- High energy consumption, but with great savings potential;
- Large waste generation (wastewater, exhaust gas, paper sludge);
- Automation of many factories is not yet synchronised;
- Pressure to reduce emissions and cut production costs is increasing.
Over the past five years, the VPPA has implemented many programmes and initiatives aimed at sustainable development and emission reduction such as promoting circular economy, orienting sustainable investment, training to improve technology innovation capacity, inventory and reduction of greenhouse gas emissions.
For the Vietnamese tissue and paper industries to develop sustainably it is necessary to join the hands and efforts of all association members and related parties to create strong steps forward in Green and Digital transformation.
Digital transformation in paper mills
- Monitoring energy, performance, maintenance, quality and environment using IoT (Internet of Things)
- Digitalising production and operations
- Optimising with AI and data analytics
- Proactive maintenance and equipment management
- Supply chain management and green logistics
- Water circulation and smart processing
- Optimising steam and heat energy
Digital Twin:
- Digital line simulation
- Connecting ERP – MES – SCADA – IoT
-> Comprehensive optimisation
Current status of GHG emissions in Vietnam’s paper industry
Total GHG emissions of enterprises in the paper industry (1,000 tons)
Emission reduction solutions for the Vietnamese paper industry
Solar energy – Energy efficiency – Biomass – Residue heat recovery – Thermal energy storage
Tissue paper in Vietnam by 2025 (Unit: 1,000 tons)
Production: increase by about 9.0% per year from 2021-2023. In 2024 this decreased sharply due to many factories being closed. However, after 2025 it recovered to almost the same level as in 2023.
It is expected that in 2026 it will skyrocket to more than 850,000tpy.
Domestic consumption: not affected by Covid-19 and has maintained good growth momentum so far, with average tissue consumption reaching 4.2kg per person (estimated 2025).
Exports: rapid growth, with an average compound annual growth rate (CAGR) of 26%/year, reflecting the steady expansion of the export market.
Imports: fastest growth, with an average CAGR of up to 60% per year, as imports in 2024 increase by more than 2.1 times compared to 2023, mainly from Indonesia and China.
Main production materials (virgin pulp)
Consumption – Production – Import and Export of Pulp (Unit: 1,000 tons)
Pulp supply in 2025
Consumption: nearly 650,000tpy (9M/2025), higher than the whole year of 2024 and up to more than 20% compared to the whole year of 2022.
Domestic production: 178,000tpy (9M/2025), meeting 27% of demand – the rest must be imported.
Import: more than 500,000tpy, US (24%), Indonesia (30%), Brazil (25%) -> 79% of total imports.
The growth driver of Vietnam’s pulp consumption is mainly tissue paper and, in the future, high-quality coated paper.
Wood chip exports 2020-2024
Wood chip exports totalled 18.3m tons during the period, equivalent to a value of 2.7bn.
Why is Vietnam’s tissue market growing rapidly?
High income, strong urbanisation
This change is evident in cities with improved living standards and is influenced by global consumption trends.
Consumers tend to use high-quality tissue and paper towels.
Healthier consumers
Especially after the Covid-19 pandemic and recent global health issues, Vietnamese people are increasingly paying attention to personal health care, which has led to increased use of toilet paper.
Online shopping and supermarkets
Expanding access to tissue products to consumers thanks to improved delivery services, shoppers are invited and easily find a variety of quality products.
Tourism and hotels, restaurants
The increase in domestic and international tourists in Vietnam, along with the government and businesses’ efforts to improve the quality of hotels and restaurants, has contributed to the increase in demand for tissue paper, especially in the AfH sector.
Market trends and developments
Higher quality products and changing tastes.
Higher incomes are helping consumers choose higher quality tissue paper (100% from virgin pulp).
Brands are responding by launching a diverse product line, in line with customer trends and desires.
Moving more towards green consumption and production: consumers are increasingly concerned about the environment and green production – but are not (yet) ready to pay more.
This also causes more difficulties and pressure for manufacturers because the cost of green conversion is not small.
Improve delivery and supply chain
Currently, the distribution channel of tissue paper in Vietnam is still largely traditional, so it is not effective; it is necessary to build smart warehouses and distribution systems, apply digital transformation, etc., to help deliver goods quickly and save costs.
Vietnam – key export centre
5x Expanding production scale
Vietnam’s tissue paper output has increased five times since 2007. Expected average growth of over 10% per year in the next decade.
12.6t Sales value
In 2024, the Vietnamese tissue paper market is forecast to reach VND12.6 trillion in revenue.
660M+ ASEAN community
The ASEAN region has more than 660 million people. This means there is a large common market for tissue paper products.
With its central location in ASEAN, combined with rapidly increasing production capacity, Vietnam is expected to play a key role in the region’s tissue paper market and become an ideal location for export activities.
However, Vietnam needs to quickly invest in developing pulp production from wood chips and integrating pulp and paper production to improve competitiveness.
Opportunities, challenges, and development orientations: Vietnam’s tissue paper sector
The Vietnamese government is determined to innovate institutions, remove barriers for businesses, and attach importance to the role of the private economy with the expectation of sustainable GDP growth, averaging over 10% in the next decade;
Tourism and e-commerce are growing strongly with GDP, and, accordingly, the demand for packaging paper and toilet paper is expected to grow by double digits;
Green/circular economy, the digital transformation and AI are considered inevitable trends of the country, in which the paper industry is a natural fit for the circular economy, and has been making efforts for dual transformation;
The workforce is quite young with increasingly high knowledge and skills, but the cost is still low;
Infrastructure (especially transportation and energy) is receiving strong investment from the government to meet the country’s development needs, helping to reduce the currently very high logistics costs and energy security.
Great opportunities for investment in pulp production and the pulp-paper integration model to take advantage of wood chip sources and replace imported pulp products, contributing to enhancing sustainable competitive advantages.
The world economy is entering a fragile and challenging BANI (Brittle, Anxious, Non-linear, and Incomprehensible) era, with rapid, unexpected, and unpredictable fluctuations; especially the US MAGA policy and geopolitical competition;
Vietnam is being competed against by strong developments in terms of scale, technology, and production integration of China’s paper industry, as well as Indonesia’s Asia Pulp & Paper (APP) and also India’s, which is expected to grow in the years to come;
Investment in tissue paper production in Vietnam is booming, mostly on a small and medium scale, without pulp-paper integration. This will soon lead to the risk of oversupply, along with a lack of sustainable competitiveness;
Requirements on CBAM, ESG, carbon emission reduction, supply chain transparency, etc, to enter major export markets such as the EU, the US … are increasingly strict;
Transportation and logistics costs in Vietnam are currently much higher than in other countries in the region;
Mobilising investment capital is still difficult because most Vietnamese paper enterprises have not yet IPO and the view that they must have collateral, as well as concerns about risks of the Commercial Banking system;
Development orientation
To continue to grow strongly and become the leading paper exporter in the region, Vietnam needs to focus on the following factors:
- improve technology and supply chain
- invest in building and perfecting the supply chain to quickly bring products to consumers at the lowest cost. Improve technology, apply integrated models in pulp and paper production to reduce costs and improve product quality.
- green transformation and innovation
Vietnam has set national goals on innovation, green transformation, and digital transformation by 2030 and a vision to 2045. Vietnamese tissue paper manufacturers need to promote activities in line with national orientation.
Improve consumer understanding
It is necessary to help consumers improve their understanding of the quality, types, and advantages of specialised tissue paper to change consumer behaviour.
Close cooperation with countries in the region
Vietnam’s accession to the AEC is a great opportunity for tissue paper exports thanks to trade agreements, close cooperation with countries in the region is key to maintaining and expanding export activities.
Conclusion
With the above opportunities and challenges, the Vietnamese paper industry in general and the tissue paper sector in particular are forecast to grow strongly and sustainably in the next decade.
Vietnam is making efforts to transform green and digitally, towards sustainable development and innovation, including the paper industry.
What will be the next step for Vietnam’s tissue and paper industries? What can Vietnam – and the regional tissue paper markets – do to promote sustainable growth?
