Vietnam:
What's happening in the pulp and paper sector?
Vietnam's paper industry is booming.
In 1995, paper production stood at 220,000 tonnes. In 2007, the
Vietnam Paper Association aims to produce more than one million
tonnes of paper. Demand far exceeds supply and in 2006, Vietnam
imported 709,000 tonnes of paper products. A large proportion
of paper produced is for packaging - a result of Vietnam's expanding
export economy.
At present, Vietnam's pulp industry
supplies only 37 per cent of domestic demand and Vietnam also
has to import pulp to keep its paper mills running. In 2007, the
industry anticipates importing 232,000 tonnes of pulp.
This could be about to change. According
to a 2006 Ministry of Industry paper industry plan,Vietnam's pulp
and paper sector needs US$6 billion of investment by 2020. Some
of this investment has already started and about 750,000 tonnes
of new capacity is currently planned or under construction.
In May 2006, construction began on the
130,000 tonnes a year An Hao Pulp Factory in Tuyen Quang province,
in the north of Vietnam. Japan's Marubeni Corp won a US$130 million
contract to build the mill. A paper mill is planned in a second
phase of the project. The government has approved an area of 380,000
hectares forest land to supply the mill.
In the south of Vietnam, construction
is under way on the Phuong Nam Pulp Mill in Long An province.
Phuong Nam will produce 100,000 tonnes of kenaf pulp a year. Financing
to the tune of US$70 million comes from the French bank Société
Générale for imports of equipment and services. Petrovietnam Finance
Company and the Transport, Communication, Development and Investment
Company are also funding the project. Austria's Andritz is supplying
machinery with backing from the Austrian, German and Swedish export
credit agencies.
In August 2006, the Saigon Export-Import
Company announced plans to invest US$150 million in a 115,000
tonnes a year pulp mill in Nui Thanh district, in the central
province of Quang Nam. To supply the raw material for the mill,
Quang Nam authorities have allocated 30,000 hectares of land for
acacia and eucalyptus plantations.
In November 2006, the Vietnam Paper
Corporation announced plans to invest almost US$300 million in
an expansion of the Bai Bang Paper Company in Phu Tho province.
Vinapaco plans to build a 250,000 tonnes a year pulp production
line at the Bai Bang site. A further US$100 million will be spent
on "material forest zones", otherwise known as industrial
tree plantations, covering a total of 160,000 hectares in five
provinces.
In January 2007, Hong Kong-based Lee
& Man Paper Manufacturing announced plans to build a 320,000
tonnes a year containerboard paper mill and a 150,000 tonnes a
year pulp mill in Vietnam. Lee & Man is reported to be also
interested in investing in plantation projects in Vietnam.
These pulp mill projects (with the exception
of Phuong Nam, which is to be supplied by farmer-planted kenaf)
will mean more industrial tree plantations, more biodiversity
loss, more dried up streams, lowered water tables and less land
for agriculture and rural communities.
Recently, William Sunderlin and Huynh
Thu Ba, researchers at the Centre for International Forestry Research,
asked themselves two research questions about Vietnam: how forests
help alleviate poverty; and whether the plans for large scale
tree planting are consistent with the government's goal of eliminating
poverty. They concluded that their questions could not be answered,
because "there has not yet been any primary empirical research
directed specifically at answering these questions".
Yet, even without this research, the
development of industrial tree plantations to feed the pulp industry
is heavily subsidised by the Vietnamese government as well as
by bilateral and multilateral aid agencies. While the benefits
of these subsidies go to the pulp and paper industry and to exporting
industries, the impacts are felt by rural people.
In August 2006, the Ministry of Agriculture
and Rural Development (MARD) announced that it would be conducting
"concentrated afforestation" on 258,000 hectares of
land in the Central Highlands. In February 2007, the MARD announced
plans to establish 2.4 million hectares of plantations over the
next five years in the northern mountainous region. According
to the Vice Minister for Agriculture and Rural Development, Hua
Duc Nhi, the plantations are intended to provide raw material
for the pulp industry, which will produce 700,000 tonnes of pulp
a year in the northern region of Vietnam, once the plantations
are established.
The German government is supporting
a project to establish plantations in five northern provinces
in Vietnam. The Asian Development Bank has approved a US$45 million
loan for an "afforestation" project in the central highlands.
The World Bank is funding a Forest Sector Development Project
in four central coastal provinces. The project aims to establish
66,000 hectares of plantations.
Meanwhile, the government's flagship
tree planting project, the Five Million Hectare Reforestation
Programme (5MHRP) seems to be imploding. The 5MHRP started in
1998, and aimed to plant one million hectares of industrial tree
plantations to feed the pulp and paper industry. "In Vietnam,
they make plans which are inappropriate and then they cancel them,"a
World Bank forestry specialist explained to Keith Barney, a Canadian
academic, in 2003. The Bank's expert described the 5MHRP as "not
realistic". Two years later, Hua Duc Nhi, MARD Vice Minister
for Agriculture and Rural Development acknowledged that tree planting
was "way behind schedule". Government surveys found
that the quality of plantations was poor and the supply of wood
was small. The target has now been reduced to three million hectares.
In January 2007, Education Nature Vietnam
reported that, "Government audits have revealed that between
1998 and 2005, a total of 35 billion VND (US$2.25 million) was
misappropriated from a forestation fund nationwide and put to
private use by provincial authorities."
By Chris Lang, email: http://chrislang.org,
www.chrislang.blogspot.com
