Pulp prices rise by 50%: who maintains margins and who has to lower prices
When imported raw material prices spike, the brand is what determines which factories can withstand the pressure and which cannot.
When the imported pulp price increases by 50% in a year, a factory without clear positioning must absorb costs or reduce prices to retain orders. A factory with a specialized brand, proven technical reputation, and long-term customer relationships is different. They have leverage to pass part of the price increase onto customers without losing orders. A brand does not replace operational capabilities, but it is a condition for those capabilities to be valued correctly.
In 2025, Vietnam imported 638,297 tons of pulp, a 50% increase from 425,485 tons in 2024. At the same time, paper exports decreased by 23.7% due to fierce competition from external markets. These two figures put most domestic paper factories in the same situation: sharply rising input costs and a shrinking output market. The question is not who is affected. The question is who can endure better and why.
The trap of commodities in the paper industry
When a carton factory lacks a clear differentiation, customers are left with only one criterion to decide: price. This is the commodity trap, known in English as the "commodity trap." It is when a product or service is perceived as identical among suppliers. At that point, buyers only choose based on the lowest price.
In the paper and packaging industry, this trap is particularly dangerous because most factories use the same technology, the same imported materials, and the same delivery speed. At that point, the phrase "best price, on-time delivery" is no longer an advantage. It becomes the entry ticket, the minimum standard that everyone meets. No one stands out, and everyone is easily replaceable.
When the price of pulp increases by 50%, factories find themselves in a commodity trap with no options. They either absorb the entire cost increase into their profit margins or try to pass part of it onto the selling price and lose orders as customers switch to neighboring factories. This is not a theory. This is the situation hundreds of factories are facing right now.
A brand is a price lever
Marty Neumeier, the author of the foundational book on branding, The Brand Gap, defines a brand as "the perception of others about your product, service, or organization." This definition may sound abstract. However, its business implications are very specific.
B2B customers often have a clear perception of a supplier. They know what type of packaging that factory specializes in, trust the quality of its technical capabilities, and have had good collaboration experiences. Therefore, switching to another supplier is no longer a simple matter. There are hidden costs: re-certification, running new trial batches, and retraining the purchasing operation team. These costs do not appear on the price quote, but experienced buyers are aware of them.
That is why a factory with a clear brand can negotiate price adjustments when raw material costs rise without losing orders. It is not because they have a monopoly. It is because customers have specific reasons to stay, and the cost of leaving is enough to make "re-evaluating prices from scratch" unattractive.
Brands that are meaningful and differentiated help customers be willing to pay 38% more than average brands in the same industry.
Kantar BrandZ, ~2020
Specialized positioning: the path to escape pricing
No factory can escape the commodity trap by trying to do better in the same old positioning. Competing on "higher quality, lower price" is a never-ending race with no sustainable winners. The only way out is to narrow down and deepen. Choose a specific customer segment, a specific type of packaging, and then become the clearest choice in that segment.
For example, a factory specializing in food packaging that meets food safety standards, with an audited quality control process and complete technical documentation. Or a factory specializing in premium packaging for domestic cosmetics, with high-quality offset printing capabilities and structural design consulting. Both are serving different markets, with different purchasing criteria and willingness to pay different prices.
Specialized positioning, known in English as "niche positioning," does not mean rejecting orders outside the segment. It means that the message, capability profile, website, and market approach all clearly state "we excel at this." When target customers encounter that exact message, comparing prices with a generic carton factory becomes meaningless because they do not offer the same thing.
The capability profile is the first touchpoint in B2B
In B2B purchasing, the decision on the type of supplier often occurs before the first call. The purchasing manager visits the website, reads the catalog, and reviews the current client list. Then they evaluate whether this supplier should be included in the bidding list. If the website is outdated, the catalog lacks technical specifications, or there is no evidence of actual capabilities, many potential orders will disappear right at this stage. The factory will never know that it happened.
Stanford's research on web credibility shows that 75% of users assess the reliability of an organization through the quality of its website design. In the paper and packaging industry, customers are often medium and large enterprises with structured purchasing processes. Therefore, this figure has direct consequences: a weak capability profile means a meeting that never happens.
This is where B2B brands operate differently from consumer brands. There is no need for flashy advertising. What is needed is honest technical documentation, case studies with real data, and consistent branding from business cards to factory signs to sales emails. These things are not expensive but require a clear intention to execute correctly.
The green wave: opportunities are only valuable when narrated
The wave of replacing plastic packaging with paper is creating real new demand. Major retail chains like WinMart, Go, Fujimart, and AEON have actively switched to biodegradable bags. According to industry survey data, 42.9% of businesses have used paper or carton packaging. This trend continues to rise under pressure from consumers and environmental regulations.
However, market opportunities do not automatically translate into orders. A factory may have certifications for sustainable materials, water and energy-saving production processes, or products that meet biodegradable standards. But if there is no systematic way to communicate this to the market, that capability has no commercial value. Customers do not know to ask.
Conversely, a factory that can clearly tell that sustainability story, with supporting evidence in its capability profile and website, will have a distinct advantage over a factory with similar capabilities but remains silent. Corporate customers are now required to justify their environmental goals to the global supply chain. Therefore, this is no longer a bonus point but is gradually becoming a prerequisite.
References
Vietnam Pulp and Paper Association (VPPA), import-export report 2025. Mordor Intelligence, Vietnam Packaging Market Report 2025. McKinsey, The Business Value of Design, 2018. Kantar BrandZ, 2020. Marty Neumeier, The Brand Gap.
Frequently asked questions
Does a small carton printing factory need to invest in branding, or is it enough to just sell at a good price?
When all factories say 'best price, on-time delivery,' B2B customers have no way to differentiate except through price. Branding is how a factory positions its expertise, builds its capability profile, and creates reasons for customers to return without needing to bid again from scratch. This is not just about having a beautiful logo. For small factories, this is often the only way to escape the pressure of price competition every cycle.
When the price of pulp increases, can the factory raise selling prices without losing customers?
It is possible, but with conditions. Kantar's research shows that brands perceived as meaningful and distinct help customers be willing to pay more. This only occurs when three conditions are met: relationships have been built before a price crisis occurs, the factory has clear technical proof, and customers understand that switching to another supplier also has hidden costs. A sudden price increase with customers who do not know who you are will almost certainly result in lost orders.
What should a paper mill do first to build a B2B brand?
The first step is to clearly identify who you serve best: safe food packaging, premium cosmetic packaging, or bulk industrial packaging. This is more important than designing a logo. Then, build a capability profile, website, and catalog that accurately reflect that expertise. In B2B, customers assess credibility through documents before making a call. Finally, maintain consistency, repeating that message across all touchpoints until the target customers remember the factory's name associated with a specific task.