Pioneering enterprise in large timber plantation strategy in Nghe An

Despite many opinions, it is the foresight that has helped the Company stand firm in the integration period and have pioneering developments in planting raw material forests in Nghe An.

Raw material forest of Song Hieu Forestry and Agriculture Company Limited. Photo: PV

Ahead of its time

Now, after nearly 15 years, looking back, Mr. Nguyen Ngoc Hoang - General Director of the Company still remembers the atmosphere at that time. There were many opinions coming in and out expressing doubts about the new direction. But the Board of Directors of the Company at that time believed that, although production and business were effective, they "could not sleep on it", were satisfied with what they had, but had to calculate the direction for long-term sustainable development.

The policy of “Planting large timber forests” was born in such a not-so-peaceful context. However, this was not an idealistic decision but a completely serious one, based on an analysis of the development trends of the forestry sector and the wood processing industry.

Seed production by cutting technique at Dong Hop Forestry Farm, Song Hieu Forestry and Agriculture Company Limited. Photo: Hong Son

Previously, Song Hieu Agricultural Forestry Company Limited mainly exploited natural forests and during the peak period of natural forests, we exploited 200,000 - 300,000 m³ of wood per year. However, the Board of Directors determined that the wood would run out. The government would limit exploitation and we would have to find a new business direction to replace it. If we did not change right away, the Company would be passive in the future, and at that time, we would "die".

Mr. Nguyen Ngoc Hoang - General Director of Song Hieu Forestry and Agriculture Company Limited

Determined to do it, it had to be done methodically. At that time, the Company's staff traveled all the way to Phu Tho to learn and come back to set up a large timber plantation project. The problem was that all the investment capital for large timber plantation had to be borrowed, while the exploitation cycle was very long, so the pressure to pay interest was very high.

According to General Director Nguyen Ngoc Hoang, the key here is that the management and policy formulation must be correct and accurate. On the one hand, it is necessary to plant according to a rolling strategy, including large areas of timber forests that are 10-12 years old, and areas of raw material forests that are only planted for 7-8 years and then exploited for short-term use to support the long-term.

Mr. Nguyen Ngoc Hoang (standing) - General Director of Song Hieu Forestry and Agriculture Company Limited, talks with the company's technical staff. Photo: Nhat Le

On the other hand, to ensure productivity, it is necessary to strictly manage the input. The company has cooperated with the Vietnam Forestry Seed Science Institute to produce seeds, then hired them to transfer technology. The care and protection processes must strictly follow the technical procedures issued by the Ministry of Agriculture and Rural Development.

As for newly exploited large timber forest areas of 10-12 hectares, it is necessary to choose areas with suitable forest conditions with a slope of less than 25º and use machinery to dig holes to plant trees to ensure deep holes, strong roots... The number of trees per hectare of forest land must also ensure a reasonable density, around 1,300 - 1,600 trees/ha.

Economic efficiency is many times higher

Time has proven that the above strategy of Song Hieu Agricultural Forestry Company Limited is completely correct. The area of ​​large timber forests 10-12 years old gives an output of 30,000-35,000 m³.

The raw material source not only provides enough for the operations of Song Hieu Agricultural and Forestry Processing Enterprise (a unit under the Company) and Tan Viet Trung Artificial Board Joint Stock Company in Nam Cam Industrial Park (a joint venture company), but also sells to other wood processing factories in the province that are lacking large wood to make planks.

Workers of Song Hieu Forestry and Agriculture Company Limited exploit raw wood. Photo: Hong Son

The company's leaders said that the efficiency of growing large timber forests is 1.6 - 2.5 times higher when compared to raw acacia forests that are only planted for 4 - 5 years. For acacia forests with a 10 - 12 year exploitation cycle, the yield is 180 tons/ha, even up to 240 tons/ha; if raw material forests are planted and exploited for 4 - 5 years, the yield is only 70 - 80 tons/ha.

That is about productivity, and when processing finished products, the larger the size of raw wood, the higher the efficiency because the loss coefficient is smaller. Currently, to create 1m³ of sawn timber, if the wood is 10 - 12 years old, the coefficient only takes 1.7 - 1.8 times, but if the wood is 4 - 5 years old, the coefficient is higher, meaning that more input materials are needed. Therefore, raw materials from large timber forests create a difference in price, bringing a great competitive advantage to the Company's products in the market.

Operating the MDF artificial board production line. Photo: Hong Son

With a correct strategic vision that is a decade ahead, up to now, Song Hieu Agricultural Forestry Company Limited is a rare enterprise in the forestry sector in Nghe An that is doing business effectively and is preparing documents to receive a Certificate of Merit from the Prime Minister in implementing Resolution No. 30 - NQ/TW dated March 12, 2014 of the Politburo and Decree 118/2014/ND - CP dated December 17, 2014 of the Government on arrangement, innovation and development, improving the operational efficiency of agricultural and forestry companies.

Discussing the upcoming orientation, General Director Nguyen Ngoc Hoang said: The company is planning to convert an additional 1,494 hectares of raw forest land to large timber plantation; at the same time, changing the production line of wood bars at Song Hieu Agricultural and Forestry Processing Enterprise from heat drying to steam drying using German technology.

The advantage of the new technology is that the wood products have guaranteed moisture, are even, retain more natural wood color, and do not warp or burn like the old technology. The company will also invest in mechanizing the exploitation of raw materials to increase labor productivity, and is also researching investment in the province's high-tech forestry zone.

The total forestry land area managed by the Company is 32,000 hectares spread across 21 communes and towns of 4 districts: Nghia Dan, Quy Hop, Quy Chau, Que Phong and Thai Hoa town with 6 affiliated forestry farms.

The area of ​​natural forest land has 21,798 hectares that are protected; the remaining 7,800 hectares are planted forests with two main species of trees: Acacia mangium and Acacia hybrid. Of which, the Company has up to 3,000 hectares of large timber forests with an exploitation cycle of up to 10-12 years; the remaining 4,800 hectares are planted forests with an exploitation cycle of 7-8 years.

Raw material forest of Song Hieu Forestry and Agriculture Company Limited. Photo: Hong Son

However, one of the concerns of the Company's leaders is that the expansion of large-scale timber plantation areas among the people is facing difficulties, although the market demand is very large and the province is having a strategy to plant large-scale timber forests.

According to General Director Nguyen Ngoc Hoang, first of all, it is necessary to propagate so that people can see the real effectiveness of planting large timber forests; at the same time, the State management agency must implement the planning stage well, have both short-term and long-term support policies to create conditions for people because the exploitation cycle when planting large timber forests is very long, must create livelihoods and income for people during that time to make them feel secure.