Dec 15, 2005. /Lesprom Network/. Vietnam's paper industry hopes to attract foreign direct investment (FDI) into pulp production in the coming years in order to improve the competitiveness of Vietnamese paper products, according to chairman of Vietnam Paper Association (VPA) Phan Quy Ky. Mr. Ky said an international firm from the US, Thai Martin Group and Phoenix Pulp & Paper Public Co. Ltd. of Thailand, and Ballarpur Industries Co. Ltd. of India have this year come to Vietnam many times to seek business opportunities in pulp production. Since 2001 the national paper industry has not received any FDI project, while total domestic investment has reached merely $205.2 million. Of which, only $15.2 million of the total domestic capital have been invested into pulp production. This was a gloomy year for investment in the industry. Vietnam is now home to two operating pulp production lines, Bai Bang and Viet Tri Paper Companies, with total annual capacity of 64 000 tonnes. Many pulp projects are implemented currently in the country such as Thanh Hoa pulp project by Vietnam Paper Corp., a 100 000-tonne-per-year pulp project by Phuong Nam Pulp Co. in Long An province, 12 000-tonne-a-year Hai Ha pulp project by Haiphong Paper Joint Stock Co., and a 60 000-tonne-per-annum project by Saigon Paper Co. Ltd. Other projects, including Quang Nam, An Hoa (in Tuyen Quang province) and Hiep Phuoc pulp plants, are also waiting for investment licenses. Local paper production still depends on foreign pulp, making its price less competitive. The industry had to import 140 000 tonnes of white pulp last year, and expects to import 235 000 tonnes of white pulp this year. The association said the industry would face severe shortage of pulp between now and 2010. Meanwhile, the local paper output now surpasses the demand. The annual paper consumption stands at 150 000 tonnes, while the total production volume is 260 000 tonnes per year. Enterprises face an average loss of VND 500 000 ($31.5) for each tonne of paper sold. The association is worried about the industry's survival when the import tax on paper will be cut from 20% to 5% under the AFTA agreement at the beginning of next year.