DECISION

ON APPROVAL FOR THE PLAN FOR WOODCHIP PRODUCTION MANAGEMENT IN THE PERIOD OF 2014 - 2020

THE MINISTER OF AGRICULTURE AND RURAL DEVELOPMENT

Pursuant to Decree No. 199/2013/ND-CP dated November 26, 2013 of the Government defining the functions, tasks, entitlements 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 on approval for the Project for agricultural restructuring orientated towards added value increase and sustainable development;

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

Pursuant to Decision No. 919/QD-BNN-TCLN dated May 5, 2014 of the Minister of Agriculture and Rural development on approval for the action plan for added value increase of processed wood products in the period of 2014—2020;

At the request of Director General of General Department of Forestry,

...

...

...

Article 1. Approving the Plan for woodchip production management (hereinafter referred to as the Plan) in the period of 2014 – 2020 as follows:

I. OBJECTIVES OF THE PLAN

1. General objectives: Conduct the strict management of imported woodchip production or processing, minimize the use of wood materials logged from cultivated forests to produce woodchips in order to improve the quality of wood products processed from the domestic cultivated forests and raise the income of the forest owners for poverty reduction.

2. Specific objectives

- The period of 2014 – 2015: using 70% or lower of wood materials logged from cultivated forests to produce woodchips and increase the added value by 14% over 1 m³ of wood materials in comparison with the added value in 2013.

- The period of 2016 – 2020: using 40% or lower of wood materials logged from cultivated forest to produce woodchips.  Concentrating on development of products having competitive advantage and high added value such as interior and exterior wooden furniture or fine art furniture. Increasing the added value by 54% over 1 m³ of wood materials in comparison with the added value in 2013.

II. ORIENTATION OF WOODCHIP PRODUCTION

1. General orientation

Regarding Northwest, the Red River Delta, Central highlands, the Mekong Delta and Southeast: stopping establishment of woodchip manufacturers. Gradually decrease the quantity of woodchip manufacturers in the 3 following regions: Northeast, North Central Coast and South Central Coast with the yield of 5.5 million metric tons in the period of 2014 – 2015 and 3.5 million metric tons in the period of 2016 – 2020.

...

...

...

2.1. By 2015

- Northeast: up to 2.6 million metric tons of woodchips per year.

- North Central Coast: up to 1.1 million metric tons of woodchips per year.

- South Central Coast: up to 1.8 million metric tons of woodchips per year.

2.2. By 2020

- Northeast: up to 1.5 million metric tons of woodchips per year.

- North Central Coast: up to 1.0 million metric tons of woodchips per year.

- South Central Coast: up to 1.0 million metric tons of woodchips per year.

III. MEASURES

...

...

...

- Regarding Northwest, the Red River Delta, Central highlands, the Mekong Delta and Southeast: postpone approving the projects for establishment of new woodchip manufacturers.  Recommend the existing woodchip manufacturers to invest in after-chipped processing; otherwise they must stop the production;

- Regarding Northeast, North Central Coast and South Central Coast: limit approving the projects for establishment of new woodchip manufacturers in the period of 2016 – 2020 with the consent of the Ministry of Agriculture and Rural Development.

According to the actual wood materials in the regions, the production scale of woodchips and processed products shall be adjusted properly.

2. Developing wood product processing

- Provide wood-processing investors with incentive policies in order for manufacturers of medium-density fiberboard (MDF), chipboards and pullet fuels, by 2020, to produce approximately 2.5 million metric tons of products per year and for paper mills to produce 750 thousand metric tons of paper pulp per year from approximately 6.5 million m³ of small timbers. Increase the quantity of manufacturers of laminated wood, other artificial boards and supporting materials in the wood processing.

- Construct and expand wood processing plants in the areas having convenient infrastructure. Provide incentive policies for new wood processing plants in the remote areas having various sources of wood materials from cultivated forests.

3. Regarding the market

- Stabilize the existing markets (United States, China, Japan, EU, etc.) and develop new markets such as Russia, Middle East, etc. to gradually build distribution networks of Vietnamese wood products abroad.  Organize specialized fairs to develop the domestic market.

Negotiate bilateral and multilateral agreements on trade promotion at large markets. Provide enterprises with the market information in order for they to initiatively adapt and limit negative effects from trade barriers and protective policies of export markets.

...

...

...

4. Regarding policies

The Government and the Prime Minister are requested to issue the following policies:

- Tax policy: increase the woodchip export duty from 0% to 5-10%. Impose the VAT of 10% and the enterprise income tax of 25% on the woodchip production enterprises.

- Credit policy: formulate and implement the credit policy to the forest owners that commit to cultivate new forests for trading large timbers or retain cultivated forests and extend the period of tending to trade in large timbers for at least 10 years with the following policy: the aforesaid forest owners shall put the forests in pledge to apply for loans used for afforestation. The loan shall have the same period with the cultivation period, the incentive interest shall not exceed 5% per year, and the principal and interest are paid in lump sum after harvesting.  If individuals and organizations having cultivated forests that are 5 years of age or older retain them for trading in large timbers (10 years or longer), they shall be entitled to the annual allowance of VND 200,000 per hectare.

- Enterprise-supporting policy:

+ Support the enterprises in investment in forestry and rural areas to develop wood-processing plants using woods from domestically-cultivated forests (as prescribed) to produce wood products with high quality with the following policy: the total VAT is refunded, the land rents for the new plants are exempt and 50% of material transport fares are paid;

+ Support the enterprises in investment, transfer of scientific progress and new technology for production of auxiliary materials in processing of exported woods.

5. In terms of science and technology

- Concentrate on investigation and technology transfer, especially subjects and projects for design of auxiliary products or materials.

...

...

...

- Research and apply technical progress in wood modification technology to increase the utility of small timbers derived from cultivated forests, produce high-quality materials to process valuable wood products.

6. Budget

Total budget for the Plan is VND 7,500 million, in particular:

- The budget for management and implementation of the Plan and annual periodic inspection (the period of 2015-2020) applied for wood processing plants nationwide is VND 1,000 million.

- The budget for formulation of incentive policy on deep processing of wood and wood products, the policy on management and use of material resources and improve the value of chain in the forestry production, and the policy on sustainable forest management and science-technology is VND 1,500 million.

- The budget for projects for evaluation of production of woodchips and proportion of wood products and wooden products nationwide is VND 5,000 million.

Article 2. Implementation

1. Regulatory roles of General Department of Forestry

- Collect, process, synthesize, direct, instruct, inspect and evaluate the implementation results of the Plan.

...

...

...

- Cooperate with relevant Ministries and agencies to request the Government or the Prime Minister to provide incentive policies for enterprises/deep-processed wood plants that utilize the wood materials derived from cultivated forests, gradually decrease the rate of wood material import and logging of wood derived from domestic natural forests.

- Research and propose incentive policies for the forest owners holding sustainable forest management certification relating to wood materials satisfying the requirements of international market.

2. Regulatory roles of provinces

Services of Agriculture and Rural development shall implement the Plan completely, give advices to executive committees and local governments in order for they to implement the Plan and perform the following tasks:

- Give advices on formulation of wood processing planning to the People’s Committees of provinces according to the Planning for woodworking industry by 2020 and orientated to 2030 approved by the Ministry of Agriculture and Rural development as prescribed in Decision No. 2728/QD-BNN-CB dated October 31, 2012.

- Check and restructure woodchip manufacturers in conformity with material regions according to the Plan.

- Send report on implementation results to the Ministry of Agriculture and Rural Development for consideration.

Article 3.  This Decision comes into force from the day on which it is signed.

Article 4. The Chief of the Ministry Office, Director General of General Department of Forestry, Heads of relevant units affiliated to the Ministry and Services of Agriculture and Rural development of central-affiliated cities and provinces shall implement this Decision./.

...

...

...

PP. MINISTER
DEPUTY MINISTER




Ha Cong Tuan