The domestic paper industry is currently suffering due to imports driving up production costs and taxes amidst declining raw material volumes, according to the Vietnam Paper and Pulp Association.

It said that raw material imports had remained necessary for pulp production purposes while the industry continued exporting large amounts of domestic material at low prices.

To prove its points, the association revealed that annually, the industry was capable of producing more than 400,000 tonnes of pulp, meeting 20 percent of the total national demand.

Meanwhile, it added that over 2 million tonnes of wood-based materials used to make pulp had been exported.

Currently, although local demand had remained high, consumption was steady.

Global paper prices have however reduced recently, being around 10 percent cheaper than domestically, the association confirmed.

It noted that out of date technology had been a large draw back in terms of production, quality and competitiveness.

The situation is expected to deteriorate when the import tax on paper is cut by 20 percent in 2012 as part of World Trade Organisation (WTO) commitments.

To solve the problem, experts agreed comprehensive investment in technology was essential in streamlining operations to meet 70 percent of domestic demand by 2020.

A General Customs Department report revealed that the country had imported 954,000 tonnes of paper, worth 961 million USD, up 2 percent in volume and 16 percent in value.

Imports came mostly from Indonesia , Thailand and Singapore. /.