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Wood chips produced by Quy Nhon Paper Material Co., Ltd. |
With its advantages of low investment unit cost, simple and uncontrollable automatic production lines, good quality products, short time capital turnover, wood chip processing industry in Binh Dinh has enjoyed favourable conditions and developed well. Yet, the industry needs to make good its shortcomings.
Lack of raw materials
In the past 5 years, the wood chip processing industry of Binh Dinh has aggressively developed as evidences show via ever-increasing values of industrial production and wood chip exportation. The province has now 17 investment projects on building wood chip processing factories with total capacity of 1.2 million tonnes/year and total investment of 386 billion VND. Out of which, 11 factories has come into operation with total capacity of 885.000 tonnes/years and total investment of 203 billion VND.
The thriving growth of the wood chip processing industry offers stable output markets for artificial forest products, boosting multi-factor investment into the growing of the material forests. Since 2011, Binh Dinh has planned to develop 3 kinds of forests and paid attention to the forest protection. The province has nearly 88,133 hectares of the artificial forests, including 1,241.9 hectares of artificial special-use forests, 25,271.3 hectares of artificial protection forests, 61,385.4 hectares of artificial production forests and 234.2 hectares of artificial out-of-planed forests.
In spite of the robust growing, the wood chip processing industry faces many difficulties, particularly the shortage of raw material supply. The artificial forest products meet about 35% of the factories’ need. Besides, because there is no master plan of afforestation and scientific exploitation of the forests, the raw material supply is unstable. In reality, certain factories even close due to the lack of the raw material. The supply is expected to be scarcer as new factories in Binh Dinh and other neighbour provinces come into operation.
Necessity of a long-term vision
Government and enterprises should have a long-term vision about the wood chip processing industry so that the industry develops in stable and sustainable manner, warns strategic planners and experts. The government should be cautious about the industry development planning, avoiding neither hot nor scattered development of the raw material supply.
To ensure the stable supply of the raw material, the enterprises and the forest growers should co-operate in the afforestation. For example, the enterprises should directly sign contracts with the forest owners (individuals or organizations) in forest growing and protection under supervision of local governments. The signing and performance of the contracts between the forest growers and the processing facilities or the forest owners must obey legal regulations on economic contracts. The contracts of the raw material supply or purchase must be on the basis of agreements between the buyers and the sellers and must be certified by commune-level People’s Committees (in case the suppliers are households or individuals). This must be a condition in the contracts. Such moves enable stable supply of the raw material, causing less difficulties for the enterprises and bringing higher incomes for the forest growers.
The government should review, adjust and add policies on promotion of the artificial afforestation as way to ensure the raw material supply for the wood chip processing industry in given real conditions; issue policies on preferential loans for the household forest growers, who invest into extension of the forest growing period, enable stable supply of the raw material and enhance economic interests from the artificial afforestation; build up and implement effectively the material zone planning together with promotion of the industry in places where having favourable conditions for the material forest growing.
The provincial government is arranging the existing factories and grant no license to projects of building new factories if investors haven’t invested into the material zones. Besides, Binh Dinh will call more investments into the factories which process wood chip products like pulp, okal particle board, MDF board, visco fibre…
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