Local wood and handicraft processors have a huge demand for wood materials, but 80% of the timber used to make wood products is now imported. Meanwhile, despite policies to encourage local firms to plant forests to secure materials in the long term, few have invested in this program.

Currently, some 1.5-2 million cubic meters of timber is imported every year, equivalent to US$1.3 billion, versus nearly US$4 billion in wood exports.

The story of Truong Thanh

Several years ago, when the local wood industry was in a hot development phase, the Binh Duong-based Truong Thanh Furniture Corp. (TTFC) set up many wood processing factories across the country and started to think about forest planting.

The determination to plant forests so that TTFC will be fully independent of materials caught attention of a renowned Japanese investor. Thus, Truong Thanh Oji Afforestation Co. Ltd. (TTO), a US$7-million joint venture between TTFC and Japan’s Oji Paper Co., was formed late last year, with a modest initial goal to develop nearly 18,000 hectares of forest in Phu Yen.

Vo Truong Thanh, chairman of TTFC and TTO, said local businesses, including TTFC, lack technology and experiences in afforestation, not to mention their weak financial capability. Likewise, many experts admitted afforestation in Vietnam is largely limited to reforesting bare hills than developing high-yield economic forests.

“Through the joint venture, we can utilize financial resources, technology and experience in forest planting of Oji, which partly helps Truong Thanh obtain the long-term goal of afforestation, and thus become independent of materials for processing and export,” said Thanh.

Before this joint venture project was launched, TTFC had been allocated land for planting forests from several localities such as Phu Yen, Binh Binh and Daklak. However, huge capital demand and limited experience and technology posed great challenges to TTFC.

Truong Thanh is currently Vietnam’s leading wood processor and exporter. According to Thanh, the woodworking enterprise expects to plant 40,000 hectares of material forest in Phu Yen, 50,000 hectares in Daklak and 50,000 hectares in Dak Nong.

Forests not easy to plant

Local people have a habit of planting forests for different purposes, but they hardly take into account the issues of seeds, productivity, pests and fire prevention and fighting. Therefore, afforestation as a research topic has been mentioned much at workshops and meetings of the agriculture sector in recent years.

In February this year, the Ministry of Agriculture and Rural Development held a forum on afforestation in HCMC, with an aim to remove difficulties for forest planters and encourage them to adopt the methods certified by Forest Stewardship Council (FSC).

Under the Forestry Development Strategy until 2020, Vietnam needs to plant anew two million hectares of forest in order to meet the demand of timber and achieve a national forest coverage of around 47%. The capital demand is estimated at tens of trillions of dong, some 60% of which must be sourced from investors.

However, at present, potential investors, both local and foreign, find it hard to secure land for afforestation.

According to a report of the agriculture ministry, less than 200,000 hectares of production forest was developed in Vietnam last year and the pace of afforestation seemed to slow down. In the first eight months of this year, fewer than 100,000 hectares of forest was grown.

Notably, individual farmers are also planting forests for self consumption without paying attention to the economic efficiency of afforestation.

Therefore, at a meeting with the agriculture ministry in July, the HCMC Handicraft and Wood Industry Association (HAWA) suggested investors should join hands with farmers. Businesses should advance capital for farmers to develop forests and consume their products.

Seven years have passed since wood processing firms began to think about forest planting, but only a few projects have been carried out, while others are awaiting forest land handover.

SGT