Project: “Research on improving the economic efficiency of plantation timber value chains, meeting legal timber requirements and sustainable forest management”

January 6, 2025 by

GENERAL INFORMATION:

Funding institution: Project level of Ministry of Agriculture and Rural Development

Project lead organization: Vietnamese Academy of Forest Sciences

Project implementation organization: Forestry Economic Research Center

Project leader: Dr Nguyen Gia Kiem

Implementation time: 2022-2024

RESEARCH OBJECTIVES AND CONTENTS:

Target:

  • Assess the current situation and analyze the economic efficiency of plantation timber value chains.
  • Proposing solutions to improve the economic efficiency of plantation timber value chains, meet legal timber requirements and promote sustainable forest management.
  • Upgrade software and build a database system for the management and monitoring of the value chain and traceability of legally planted forest timber.

Research contents:

  • Content 1: Assessment and analysis of the current situation and characteristics of plantation timber value chains.
  • Content 2: Analysis of the economic efficiency of plantation timber value chains
  • Content 3: Compliance with regulations on legal timber of plantation timber value chains and promotion of sustainable forest management
  • Content 4: Upgrading software and building a database system for the management and monitoring of the value chain and traceability of legally planted forest timber.
  • Content 5: Proposing solutions to improve the economic efficiency of plantation timber value chains, meet legal timber requirements and promote sustainable forest management

RESULTS SUMMARY:

  1. The project has assessed and analyzed the current situation and characteristics of 7 value chains, including: Chips value chains, Wood pellets, MDF boards, Peeled veneer, Joined planks, Interior furniture, Exterior furniture. From the product characteristics of each value chain, the topic of grouping value chains for analysis and comparison, including: Group 1 value chains are chains with forest certificates, with high economic efficiency, and Group 2 are chains without forest certificates, chains with low economic efficiency.

2- The economic efficiency of value chains is evaluated through the Net Profit (NPr) indicator. The results of analysis at all stages and the whole chain when using 1 ton of raw wood for the production of chips, wood pellets, MDF boards and 1m3 of wood with a minimum diameter of 10cm for the production of Peeled veneer, Joined planks, Interior furniture and Exterior furniture show that,  Group 1 value chains are more economically efficient than group 2 value chains, specifically as follows:

– Chip value chain: with the total NPr of Group 1 chain reaching 295 thousand VND, the ability to make a profit with 1 VND of revenue will bring 0.1 VND of profit. For Group 2, NPr of the whole chain reaching 192 thousand VND.

– Wood pellets value chain: The total NPr of Group 1 chain reached 393 thousand VND, 1 VND of revenue will bring 0.12 VND of profit. Group 2 has net profit of 271 thousand VND, 1 VND of revenue will bring 0.09 VND of profit.

– MDF board value chain: The total NPr of the chain is 336 thousand VND, 1 VND of revenue will bring 0.1 VND of profit.

– Peeled veneer value chain: The total NPr of the Group 1 chain reached 376 thousand VND, 1 VND of revenue will bring 0.08 VND of profit. Group 2 has net profit of 257 thousand VND, 1 VND of revenue will bring 0.06 VND of profit.

– Joined planks Value chain: NPr of the total production chain from acacia wood reached 410 thousand VND. The group of value chains produced from pine wood has NPr of 437 thousand VND. 1 VND of revenue will bring from 0.09 VND to 0.11 VND of profit.

– Interior furniture value chain: Total NPr of Group 1 chain reached 1,191 thousand VND. Group 2 has net profit of 878 thousand VND. 1 VND of revenue will bring from 0.09 VND to 0.11 VND of profit.

– Exterior furniture value chain: Group 1 reached 1,474 thousand VND. Group 2 has total net profit of VND 940 thousand. 1 VND of revenue will bring from 0.1 VND to 0.13 VND of profit.

  1. Value chains all face difficulties in the management of supply chains and traceability of planted forest timber for timber from forests of households. Meanwhile, the timber of afforestation organizations has a full documments proving its origin, favorable in processing and trade. Product value chains with forest certificates and export product chains well meet the regulations on legal timber and timber traceability.
  2. The project has upgraded and perfected the system of traceability of legally planted forest timber (iTwood System), organized 15 training courses for 541 trainees to participate in representing local forest protection agencies, representatives of commune People’s Committees, and actors participating in the value chain, including: forest planting organizations, forest owner households, logging and processing establishments. The project has built 4 pilot models of iTwood system application in 4 regions of the Northeast, North Central, South Central and Southeast regions. The results of the 4 models include: registering 7,530.8 hectares of planted forests, with the participation of 2,040 households registering directly, 1,005 households participating in the form of “authorization”, 226 logging and transportation facilities and 107 wood processing establishments registering to participate to create a value chain within the scope of operation of 19 accounts decentralized management (number of provinces, districts and communes).
  3. On the basis of analyzing the current situation, assessing the advantages and difficulties of each value chain and the results of the application of the pilot model, the project proposes groups of solutions for common development for the 7 value chains and separate groups of solutions for the development of each chain. In particular, focusing on solutions to digitize databases and apply information technology in the management and monitoring of value chains and traceability of legally planted forest timber (application of the iTwood system in value chains).

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