bbfactory consultation workshop_eng

ສ້າງເງືື່ ອນໄຂໃຫ້ແກື່ ການລົງທື ນໃນຂະແໜງອຸດສະຫະ

ກ າໂຮງງານແປຮູບໄມ້ປື່ ອງ ທີື່ ມີ ຢູື່ ໃຫ້ເຂ ້ ມແຂງ

ກອງປະຊຸມປຶ ກສາຫາລື

By:

Phetsoulaphonh N. Choulatida, SNV-Strategy Development Advisor

14 February 2012

Multi-stakeholder Consultation Workshop

on Bamboo Business Climate

Creating Enabling Bamboo investment

Environment & Strengthening existing bamboo

factories in Houaphanh

2 Multi-stakeholder Consultation Workshop

Overall • Houaphanh province located in the North-East of Lao PDR

• 16,500 square kilometres of land area

• Population of 285,766 people

• 76% of land area covered by forest

• Bamboo forests cover more than 500,000 hectares

• More over 20 bamboo species are mixed growth naturally

• The bamboo is classified as one item of NTFPs

• A large potential of becoming a green gold of rural incomes

• Lao economic reforms adopted in 1988 improves investment climate

• Decree No.73/PO of 2004 promotes foreign investment directly in any

business sectors in Lao PDR

• Lao economic is heavily dependent on foreign investment

Consequently, the bamboo is rarely invested and it has limited growth.


Bamboo industrial development sector in Houaphanh

Factory name

Type of Business

% of business holding

Location Value chain Type of bamboo

Contact details

Mr. Vongthone

LeXuanTeng bamboo processing company

Combination of Vietnamese and Lao capital

Ban Phoun Kang in ViengXay

Pre-processing bamboo strips and rough cut nan

Mai Kuan, Mai Hia

+856(030) 5161347 +856(020) 98364009

Mr. LeMinhChau

LeMinhChau bamboo processing conpany

100% owned by Vietnamese

Ban Deuy in ViengXay

Bamboo strips, chop stick and rough cut nan

Mai Kuan, MaiLouang, Mai Hia

+856(020) 23484603

Mr. Teng Souphaphone bamboo processing co.,Ltd

Combination of Vietnamese and Lao capital

Ban VangHai in ViengXay

Bamboo strips, chop stick and laminated panels

Mai Kuan, Mai Hia

+856(064) 312315 +856(020) 55665017

Mr. Long Sobbao paper pulp factory Co.,Ltd

100% owned by Vietnamese

Ban MuangHom in Sobbao

Paper pulp Any type of bamboo

+84 931 204 674

Note: • Paper pulp factory started operation in 2007 and closed in 2009 • Teng-Souphaphone bamboo factory started operation in 2008 and closed 2009 • LeMinhChau and Vongthone factories started their bamboo business since 2009

and 2010 respectively.


Vongthone factory (Operating)

LeMinhChau factory (Operating)

Teng-Souphaphone factory (Closed/re-operating)

Bamboo Suppliers Six villages of Phoun Neua, PhounKang,

Natarn, Ban Chad, Ban Heow, and PhounSanh

But PongXang village(surveying)

Productivity 1,200 Tons/year of rough cut nan

Job creation having 70 workers

Bamboo Suppliers Ban Kian, Ban Dan, Ban Deuy, Ban

Soi+DonKhoun, Ban Khoun, and NaHor villages

Productivity

640 Tons/year of rough cut nan

Job creation having 100 workers

Bamboo Suppliers Four village clusters namely

MuangPhanh, MuangPua, Tong and Sonephet.

Productivity

Chop-sticks: 100 Tons/month Bamboo strips: 30 Tons/month

Laminated bb panels: 50 Tons/month

Job creation want 50 workers (ethnic minority)


Bamboo harvesting to factories Bamboo harvesting group

12 villages in ViengXay district 4 villages in Sobbao district

Bamboo harvesting season

There are 3 batches: January to March, August to September;

November to December closed season from 31 May to 31

October as a Prime Ministers Orders (October 15th - 2001)

Farmer’s capability Average 200 kg or 29

culms/day/person (at least 2 persons/HH)

One culm is averaged 10 m length = 7 kg of rough cut nan

Price scheme payment Services Vongthone factory:

180 kip/kg of rough cut nan for constructing new road to the forest

200-220 kip/kg for repairing road

250 kip/kg for existing main road.

LeMinhChau factory:

170 kip/kg-180 kip/kg for constructing new road to the forest

200-250 kip/kg for repairing road

300 kip/kg for buying bamboo at

factory gate plus 30,000 kip/Ton for gasoline as premium price introduce

to truck owner

Factory’s policy Factory provides tool (knife and

saw)

5 LKIP/kg compensates for administrative work of village leader

30,000 LKIP/T

pays for loading and unloading

Benefit to government 45 LKIP/kg pays for quota

permission

expenditures of committees occur during inspection

5-10% of export tax


Attention: Vietnamese cuts bamboo from inner to outer-clump But Lao villagers do not My question is, who harvests correctly?


The crisis of factory (Vongthone & HiaHane)

Initially HiaHane ordered purchase rough cut nan 48 cm upward

Second order purchase was 65 cm upward (unable to supply for HiaHane)

One culm is 10 m length, if ordered 65 cm upward uses luxuriously materials

Bamboo price is declining from Thailand, HiaHane cannot buy from BounChanh at 6,180

LKIP/kg or 14 Bath/kg since Bounchanh bought 5,000 LKIP/kg from Vongthone. Hence,

Vongthone sold out to Vietnam at 17,000 Dong/kg or 6,400 LKIP/kg


Enabling Vongthone-LeXuanTeng factory environment

Strategy To his factory To government To community To project

Option1

Continuingly work with Mr. BounChanh-HiaHane if Rough cut nan accept from 48 cm upward like contract before (be fair on price and equally share benefit)

Export tax exemption Quota system is simplified and fast Miscellaneous levies are absent gradually or apply one stop shop Facilitate to solve conflicts

Harvesting group should be formalized Price information will update monthly Schedule themselves to cut culms after rice farming activity

Manage bamboo forest and divide to each household Aware economic calculation to villagers Set up harvesting group (committee, regulation, and saving, etc) Facilitate contract farming

Option2

Vongthone-LeXuanTeng work independently whole value chain

Option3 Still connect with Mr. BounChanh-HiaHane for Thailand market


Enabling HiaHane’s Business environment

Strategy To his shared-holder To government To project

Option1 Act as trader to buy semi and final products from Houphanh bamboo factory

No ad-hoc and tariff, it should be applied one stop shop (preferable)

• Push one stop shop policy

operation and make it applicable for bamboo

Option2 Buy Vongthone-LeXuanTeng factory for 20 years

Government will appoints 7 villages of Phoun Neua, PhounKang, Natarn, BanChad, BanHeow, PhounSanh and BanPongXang

• Manage bamboo forest and divide to each household

• Set up harvesting group

Option3

Rent/buy Teng-Souphaphone factory but not co-managerial system any more

Four villages clusters of VangHai, MuangPan, MuangPua, Tong and Sonephet will be prioritized



Option4

Move facilities to Xanakham district, Vientiane province to install with 5 factories in Xanakham

Identify villages in Xanakham where is belonging to each factory




Enabling Teng-Souphaphone factory environment

on supportive policies

Strategy To government To community To project

Option1

Grant him 5 hectares of bamboo forest land concession per village

• Identify bamboo area for

each household who register for harvesting group member

• Village tax should collect from household who access bamboo forest area for village saving fund

• Divide family labour cutting culms continuingly to factory

• Rotate household in each month cutting bamboo for factory regularly

• Set up village collector

• Coordinate with

government to facilitate factory

• Formalise harvesting group to supply bamboo rough nan to factory

• Mobilize communities cutting Maximum 10 months a year

• Educate community having commitment and saving fund

• Economic benefit return should be computed and aware to community

Option2

Allow factory import Vietnamese labours 50-100 people with no tax salary

Option3

Allocate bamboo forest area to each household for managing bamboo forest


Constraints The key constraint of the bamboo sector in Houaphanh province is under-commercialization.

Villagers Traders

• Villager is busy during farming period March – June and August – November because the main constraint is competition with other farming activities

• Trader introduces low price • Villager is not initiative, waiting

others success than follow • Villagers have low bargaining

capacity • Bamboo is lower income comparing

with other crops • Short-term income

• Villager does not rely on contract • There is insufficient raw materials

supplying to factory • Factory operates full capacity less than

four months a year because villagers are available in December, February and July. During this period of time they can cut bamboo stems feeding factories

• Lao worker is lower quality and not professional one

• Do not have permanent workers • Quota permit is time consuming • Complexity of inspection procedure is

costly which lead to higher cost of production and raw materials

• Investors are not sure about investment policy, it does not support seriously


Key interventions

• Forest management should be prioritized at villages belongs to factories and allocate bamboo forest area to each household to harvest and maintain sustainably by themselves

• Harvesting group has to formulate in order to rotate family labour cutting bamboo culms to factories continuingly

• Establish bamboo saving by collect tax fees from household who have been allocated bamboo

• Provide related information about short and long term benefit from bamboo

• Strengthen villagers on negotiation skills

• The factory could have a field animator to mobilise communities cutting bamboo

• If possible, village assembler could be formulated voluntary by local people with clear role and equally share benefit

• In long term, bamboo plantation could be started from now at factory to avoid shortage of raw materials. Since government shifts and empower private sector leads extension work

• Build trust between traders and villagers through good partnership

• Advocate traders be honest on pricing scheme development with beneficiaries

• Visit Vietnamese bamboo sector for experience exchange

• Identify role to whom will be a watchdog to follow up and support bamboo enterprise seriously

• Review policies that can be applicable and develop policy from the gaps for real use

• Develop bamboo harvesting guideline for community and factory

• reduce quota levy in order to increase price for farmer

• Perhaps, government could consider the bamboo as a commercial item independently excluding from NTFPs

• One Stop Shop is an initiative policy to assist new emergence of small enterprise for increasing incentive to investors and traders

To village level To enterprise side To government


This report looks at 7 parameters

• Bamboo natural resources

• Technology

• Market accessibility

• Management

• Governance

• Policy

• Finance and infrastructure

14 Title

www.snvworld.org/laos Creating Enabling Bamboo investment Environment

ສ້າງເງື ື່ ອນໄຂໃຫ້ແກື່ ການລົງທື ນຫຼາຍຂື ້ ນ ໃນຂະແໜງການໄມ້ປື່ ອງ

Merci beaucoup ຂ ອບໃຈ

Thank you

Dank u

bbfactory consultation workshop_eng

Documents