Large timber forest ‘thirst’ for support policies: Businesses in Binh Dinh require assistance

"Sweating" to raise capital

Song Kon Forestry Company Limited (Vinh Thanh district) is one of the earliest large timber plantation units in Binh Dinh. Since 2012, this enterprise has planted 30 ha of large timber forest in Tay Thuan commune (Tay Son district).

According to the plan, Song Kon Forestry Company Limited will exploit small timber forests and replant large timber forests with an area of ​​nearly 287 ha from 2023 to 2025. Particularly in 2023, the company exploited and replanted large timber forests in the two communes of Dak Mang and Bok Toi (Hoai An district) with more than 89 ha. This area is expected to be exploited in 2032.

In 2024, Song Kon proceeded with its plan in two communes of Dak Mang, Bok Toi (Hoai An district) along with Vinh Quang commune (Vinh Thanh district) with an area of ​​117 ha, aiming toward exploitation in 2033. As for 2025, this enterprise plans to plant 80 ha of large timber forest in Dak Mang commune, and this area is expected to be exploited in 2034.

In search of ways so the large timber plantation area could continuously grow, Song Kon Forestry Company Limited had to put great efforts into raising capital. According to Nguyen Ngoc Dao, Chairman of Song Kon Forestry Co., Ltd., planting large timber forests demands immense funding, averaging over VND 72.6 million/ha, while the investment capital for planting large timber forests all comes from the company’s production and business capital plus borrowed capital.

“Following the Forest Protection and Development Project for the 2021-2025 period of Song Kon Forestry Company Limited, the company received approval from the People's Committee of Binh Dinh province to borrow VND 10.8 billion from a commercial bank to plant large timber forests. However, the interest rate of commercial banks is too high, so we are facing ample difficulties,” said Chairman Nguyen Ngoc Dao.

Despite facing financial struggles, Song Kon Forestry Company Limited still strives to overcome the circumstances and grow large timber forests because of the clear benefits. In the third year of plantation, trees begin to produce biomass, and in the following years, the biomass growth rate increases. It is estimated that the plantation will yield 120 tons/ha starting from its sixth year, 160 tons/ha in the seventh year, and 180 tons/ha in the eighth year.

“Even when exploiting small timber, after deducting the costs of harvesting, transporting, digging holes to replant, and buying seedlings, the forest grower will not have much money left. If the forest is maintained for 8 years, the yield will be decent, and the size of the forest trees will also meet the standards for processing, so the selling price can increase by approximately 30%, hence double the benefit for growers. One thing to note is that the forest cover would be maintained for decades so the risk of land erosion is greatly reduced,” said Chairman Dao.

Businesses “need a hand” planting large timber forest

The benefits of planting large timber forests are obvious, but it takes a long time for this type of tree to grow strong, such as acacia trees with a cycle of over 10 years, or native trees such as Afzelia xylocarpa and Pterocarpus macrocarpus with a cycle of over 70 years. The required investment capital is quite high as the care is long-term. Meanwhile, the current policy of supporting loans to develop large timber forests has not yet been put into practice.

Many units participating in planting large timber forests in Binh Dinh are currently struggling to find capital to sustain. For example, Ha Thanh Forestry Company Limited (Van Canh district) was approved by the provincial People's Committee for a large timber forest area of ​​2,500 ha, but the company has only been able to plant more than 1,112 ha.

“With a charter capital of VND 46 billion, Ha Thanh Forestry Company Limited can only borrow VND 2 - 3 billion from the State channel according to the limit, the rest must be borrowed from commercial banks with high interest rates,” said Pham Ba Nghi, Director of Ha Thanh Forestry Company Limited.

From the Central to the local level, organizations and individuals are encouraged to participate in planting large timber forests with the promise of support policies, but in reality, large timber forest planting businesses have not seen any support.

Large timber forests not only face financial difficulties, but many other risks are also of great concern, including storms and diseases. In the case of Ha Thanh Forestry Company Limited, its planted forests are currently being damaged by standing dieback disease. Forest trees from the second year have been damaged by dieback disease, and forests planted from the third or fourth year onwards have experienced a concentration of this disease.

The company has reported the situation to the higher authorities and invited specialized agencies such as the provincial Sub-Department of Forest Protection and the Provincial Sub-Department of Crop Production and Plant Protection to inspect, but there is still no effective solution to resolve the situation.

"Many businesses have considered buying insurance for large timber forests, but no insurance company currently sells them. Therefore, there needs to be insurance policies so that businesses and people can ensure capital for reproduction when natural disasters occur. There must be policies to support loans as well as land use rights so that people can feel secure in planting forests," said Le Duc Sau, Director of the Binh Dinh Sub-Department of Forest Protection.