Aug 11, 2005. /Lesprom Network/. Vietnam's appetite for paper is expanding, as paper imports in the first half this year experienced a whopping jump of 44% in volume and 77% in value over the same period last year, Thai News Service reported citing the ministry of trade. The import surge was a strong hint that the local industry has become increasingly dependent on imports and was at the whim of world prices, said local economists. The ministry said Vietnam imported 270,000 tonnes of paper worth of $166 million in the first six months this year, with Austria emerging as one of the nation's leading import sources. In June, paper imports rose 56.3% over the previous June, with imports from Austria generating a $1.4 million turnover, an increase of 268% in value. Along with Austria, Vietnam imports a variety of paper products from 20 other nations and territories, particularly Taiwan, Japan, Germany and Australia, because many types of locally produced paper are not of sufficient quality to use in such industries as garments and tobacco. An official with the Vietnam Paper Corporation's planning department told Vietnam News that local production has never kept up with increasing demand. The corporation, the country's leading domestic paper producer, said that it churned out 116,000 tonnes of paper in the first six months of this year, accounting for only 43% of its target for the year of 269,000 tonnes. An official of the corporation who asked not to be named also said that poor performance in June resulted from a one-month machinery maintenance. The corporation, which has five member companies, has never been able to produce more than 300,000 tonnes in a year, while market demand hovers at around 800,000 - 1 million tonnes. With a designed production capacity of 325,000 tonnes per year, the corporation expects a growth this year of 27.6% over 2004 and projects revenue of VND3.2 trillion ($202.5 million). Local economists said the production plan was ambitious, given that the corporation has been one of the State-owned enterprises that has performed most poorly, suffering losses last year. Over the past five years, however, the corporation has injected more than VND9 trillion ($567.0 million) into upgrading production. According to the Vietnam Paper Association, even if the sector's yearly target of 880,000 tonnes were met, Vietnam would still have to import high quality paper. The association also said that pulp producers have not yet made adequate preparations for producing and trading pulp and paper in 2006, the deadline for Vietnam to complete preparations to join the ASEAN Free Trade Area and the World Trade Organisation. It warned that the paper industry would face greater challenges and losses if it did not devise proper steps to compete effectively. Vietnam now has more than 300 paper production facilities, including 28 state-owned mills. Most of these facilities, however, have low capacities of 500 to 20,000 tonnes, and only three factories have an annual capacity in excess of 50,000 tonnes.