Decision No. 5115/QD-BNN-TCLN Approves the Management Plan for Wood Pulp Production Phase 2014-2020

Pursuant to …;

Approving the management plan for wood chip production during the period 2014-2020

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THE MINISTER OF AGRICULTURE AND RURAL DEVELOPMENT

BASED ON THE DECREE NO. 199/2013/NĐ-CP OF NOVEMBER 26, 2013 OF THE GOVERNMENT PROVIDING FOR THE FUNCTIONS, TASKS, POWERS, AND ORGANIZATIONAL STRUCTURE OF THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT;

Pursuant to Decision No. 899/QD-TTg dated June 10, 2013 of the Prime Minister approving the restructuring program for the agricultural sector towards increasing added value and sustainable development;

Pursuant to Decision No. 1565/QD-BNN-TCLN dated July 8, 2013 of the Minister of Agriculture and Rural Development on the approval of the restructuring program for the forestry sector;

Pursuant to Decision No. 919/QD-BNN-TCLN dated May 5, 2014 of the Minister of Agriculture and Rural Development on the approval of the Action Plan to Increase Added Value of Wood Products through Processing during the period 2014-2020;

Considering the proposal of the General Director of the Forest Protection Department,

DECISION:

Article 1. Approving the Management Plan for Wood Chip Production during the period 2014-2020, including the following main contents:

I. OBJECTIVES OF THE PLAN

1. General Objective: Strictly managing the production and processing of wood chips for export, minimizing the maximum use of raw materials from planted forests for wood chip production, thereby enhancing the value of processed products from domestic planted forest timber, increasing income for people growing forests, contributing to poverty reduction.

2. Specific objectives

- For the period 2014-2015: using no more than 70% of the volume of raw timber harvested from planted forests for wood chip production, increasing added value per 1 cubic meter of raw timber by about 14% compared to 2013.

- For the period 2016-2020: using no more than 40% of the volume of raw timber harvested from planted forests for wood chip production. Focusing on developing competitive and high-value-added products such as indoor furniture, outdoor furniture, and fine wooden handicrafts. Increasing added value per 1 cubic meter of raw timber by about 54% compared to 2013.

II. DIRECTION FOR WOOD CHIP PRODUCTION

1. General direction

For the regions: Northwest, Red River Delta, Central Highlands, Mekong Delta, and Southeast: not to develop wood chip production facilities. Gradually reducing wood chip production facilities in three regions: Northeast, North Central, and South Central with a production volume of approximately 5.5 million tons during the period 2014-2015 and 3.5 million tons during the period 2016-2020.

2. Specific directions

2.1. By 2015

- Northeast region: producing wood chips up to approximately 2.6 million tons/year.

- North Central region: producing wood chips up to approximately 1.1 million tons/year.

- South Central region: producing wood chips up to approximately 1.8 million tons/year.

2.2. By 2020

- Northeast region: producing wood chips up to approximately 1.5 million tons/year.

- North Central region: producing wood chips up to approximately 1.0 million tons/year.

- South Central region: producing wood chips up to approximately 1.0 million tons/year.

III. IMPLEMENTATION MEASURES

1. Reorganizing and modernizing to improve the efficiency of wood chip production facilities

- For the regions: Northwest, Red River Delta, Central Highlands, Southeast, and Mekong Delta: temporarily suspending the approval of new projects to build wood chip production facilities. Encouraging existing wood chip production facilities to invest in post-chip processing; if this cannot be achieved, they must cease production.

- For the regions: Northeast, North Central, and South Central: limiting the approval of new investments in wood chip production facilities, only considering projects that invest in post-chip processing from 2016-2020, but must have the agreement of the Ministry of Agriculture and Rural Development.

Based on the actual situation of raw materials in the locality, adjust the scale of wood chip production and suitable processed products.

2. Developing wood product processing

- Encouraging and supporting investors in wood processing, aiming for 2020: wood fiberboard, particleboard, and wood pellet fuel production facilities operating with a production volume of approximately 2.5 million tons/year, promoting paper mills to reach approximately 750 thousand tons of pulp/year, consuming approximately 6.5 million cubic meters of small-sized wood. Developing additional facilities for solid wood composite and other artificial boards and supportive materials in wood processing.

- Building and expanding wood processing facilities in areas with favorable infrastructure. Attracting and encouraging investment in new wood product processing facilities in remote areas rich in planted forest raw materials.

3. Regarding the market

- Maintaining stable existing markets (USA, China, Japan, EU...) and developing new markets such as Russia, Middle East... Gradually establishing distribution networks for Vietnamese wood products abroad. Organizing specialized trade fairs, developing the domestic market.

- Initiating negotiations to sign bilateral and multilateral trade promotion agreements targeting major markets. Supporting information on market trends to guide enterprises to proactively adapt and mitigate adverse impacts due to trade barriers and protectionist policies of export markets.

- Strengthening inspection and supervision to create fair competition for wood products that have been announced regarding quality, labeling, and stabilizing the domestic market.

4. Regarding policy

Proposing the Government, Prime Minister to issue some policies:

- Tax policy: Increasing the export tax on wood chips from the current 0% to 5-10%. Applying a VAT rate of 10% and a corporate income tax rate of 25% for wood chip production enterprises.

- Credit policy: Establishing credit policies for forest owners who commit to planting new commercial forests or maintaining existing planted forests for at least 10 years with a mechanism: allowing forest owners to mortgage their forests to borrow funds for planting and caring for at least one forest cycle, with preferential interest rates not exceeding 5% per year, repaying principal and interest once after harvesting. For individuals and organizations with planted forests aged five years or older, if maintained for commercial purposes (over 10 years), additional protection fees will be supported (200,000 VND/ha/year).

- Support policies for enterprises:

+ Encouraging enterprises to invest in forestry and rural areas to develop facilities using domestic planted forest wood (as prescribed) to produce high-value wood products for domestic consumption and export within the first five years of production, with a mechanism: refunding the entire VAT, exempting land rental fees when building factories, and supporting 50% of transportation costs for raw materials;

+ Support investment, transfer of scientific and technological progress, and new technology for the production of auxiliary raw materials, serving wood processing and export.

5. On science and technology

- Focus on researching and transferring science and technology, especially projects and topics related to product design and auxiliary materials.

- Establish research centers and product design models from state science and technology funds.

- Study and apply technical advancements in wood modification to enhance the utilization of small-sized plantation timber, creating high-quality raw materials for the production of valuable wooden products.

6. On capital implementation

The total estimated capital for implementing the Plan is 7,500 million VND, specifically:

- Funding for management work, organization of implementation of the Plan, and annual inspections (from 2015 to 2020) of wood processing facilities and wood products nationwide: 1,000 million VND.

- Funding for policy development and support for deep wood processing and wood products; policies for managing and utilizing raw material sources and enhancing value chains in forestry production; sustainable forest management policies and science and technology: 1,500 million VND.

- Priority projects for evaluating the current status of wood chip production and the structure of wood and wood product outputs nationwide: 5,000 million VND.

Article 2. Implementation

1. For the Forestry General Department

- Organize the collection, processing, and synthesis of information, organize guidance, inspection, and evaluation of the Plan's implementation results.

- Coordinate with relevant ministries and sectors, provincial Departments of Agriculture and Rural Development to guide the implementation of the Plan, direct, inspect, and supervise during the implementation process.

- Coordinate with relevant ministries and sectors to advise and submit to the Government.

2. For localities

Provincial Departments of Agriculture and Rural Development implement and thoroughly disseminate the contents of the Plan. They provide advice to the Party committees and local authorities on specific directives for organizing the Plan's implementation, while also carrying out the following tasks:

- Advise the People's Committee of the province to develop its own wood processing plan based on the Wood Processing Industry Plan until 2020 and orientation until 2030 approved by the Ministry through Decision No. 2728/QD-BNN-CB dated October 31, 2012.

- Organize reviews and reorganization of wood chip production facilities in conjunction with raw material regions according to the direction specified in the Plan.

- Report the implementation results to the Department of Agriculture and Rural Development for timely monitoring and guidance.

Article 3. This Decision shall take effect from the date of signing.

Article 4. The Head of the Ministry's Office, the Director-General of the Forestry General Department, the Heads of relevant units under the Ministry, and the Provincial Departments of Agriculture and Rural Development of centrally governed cities are responsible for enforcing this Decision./.