The nation's paper industry rapidly expanded capacity during 2010, adding eight major new production facilities with a total capacity of 430,000 tonnes per year.

Tan Mai Joint Stock Co, meanwhile, built four new paper mills in the central and southern provinces of Quang Ngai, Lam Dong, Kon Tum and Dong Nai with a total cost of 6 trillion VND (285 million USD).

A 3.35 trillion VND (159 million USD) packaging plant was opened by the Vina Kraft Paper Co in the southern province of Binh Duong, while the Sai Gon Paper Co invested around 2 trillion VND (95.2 million USD) in its My Xuan 2 plant in the southern province of Ba Ria-Vung Tau.

Bai Bang Paper, meanwhile, opened a 520 billion VND (24.7 million USD) mill during 2010 to produce newsprint, while Diana Joint Stock Co invested roughly 20 million USD in launching a tissue paper plant on a 10ha site in the northern province of Bac Ninh.

Sizeable investment in the past year is a good sign for the industry, reflecting a growth rate expected to reach 11 percent this year and reducing import, said Vietnam Pulp and Paper Association general secretary Vu Ngoc Bao.

However, paper producers continued to barely break even or even operate at losses, Bao said. Manufacturing costs rose by 30 percent last year, he noted, while producers increased product prices by only 14-20 percent.

Paper import duties have been reduced by 20 percent since September 2008, he said, and Vietnam has opened the door to foreign competitors from the US , China and Japan , increasing competition for domestic producers./.