Nghe An Wood Processing Factory - a bright spot attracting investment

(Baonghean) - With a total investment of 300 million USD, Nghe An Wood Processing Factory in Nghia Dan Industrial Park is the largest and most modern forestry processing project in Nghe An province. The official operation of the Factory and the issuance of a mechanism for purchasing and developing raw material areas have created new opportunities for forest growers in the Western region of the province.

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Panorama of Nghe An Wood Processing Factory. Photo: Sy Minh

Large scale investment, modern technology

Coming to Nghia Dan today, witnessing the industrial park planning area (IP) a few years ago, which was still wild and barren, has now grown into a majestic wood processing factory, an industrial highlight in the Western Nghe An region. Over 40 hectares of factory planning have been completely built by the investor with functional subdivisions: factory, warehouse, office area, cafeteria, flower garden system, trees, ornamental plants... Visiting the factory feels like entering a park, that is the general comment of many people who have had the opportunity to come here.

Nghe An Wood Processing Factory under May Forestry Joint Stock Company has a total investment of 300 million USD (excluding investment capital for sustainable raw material development areas). This is the largest and most modern wood panel and MDF processing project in Southeast Asia, divided into 2 phases. Phase 1 with a total investment of more than 100 million USD, includes a wood panel processing line with a capacity of 12,000m³/year and MDF fiberboard processing line with capacity of 130,000m³/year. Phase 2 with a total investment of 200 million USD will increase the total capacity of the wood bar factory to 40,000m³/year and MDF Wood Factory reaches 400,000m³/year.

Regarding technology, the factory's equipment is selected by the investor from top European suppliers with continuous shaping and compression equipment from Dieffenbacher (Germany); wood fiberboard production technology equipment from Metso (Sweden); chip chipping, cleaning and chip storage technology from Hombak/CMC (Germany); product sanding technology from Steinemann (Germany); product cutting technology to final size from Anthon (Germany).

With the advantage of using the most modern technology in Europe, the wood processing stages are completely automated from the input of raw materials to the finished product stage. Moreover, by applying high technology, it is possible to utilize all the trunks, branches and roots to process wood. The remaining parts such as sawdust and wood bark will be utilized as fuel to create energy, contributing to reducing costs for businesses and not polluting the environment; the products of the factory meet international quality standards, and are competitive enough in demanding markets such as the US, Japan, and the EU thanks to the investor's selection of the best technology and equipment suppliers in the world.

Engineers operate the MDF wood processing line. Photo by Sy Minh

Investing in sustainable development of raw material areas

It can be affirmed that the investment project of Nghe An Wood Processing Factory under May Forestry Joint Stock Company is not only the largest in scale and modern in technology, but also a well-implemented project in sustainable investment and development of raw material areas. Therefore, Nghe An province has identified this as one of the key and strategic projects of the province to exploit the potential and strengths of the West in terms of forest land and forest economy. To ensure a sustainable source of raw materials for the factory when it comes into operation, the Provincial People's Committee has approved the planning of the raw material area of ​​more than 50,000 hectares in 6 districts of Western Nghe An. Accordingly, May Forestry Joint Stock Company has proactively received over 11,000 hectares to organize methodical production, the remaining area has signed joint venture contracts with forestry units and households to invest in seeds, fertilizers, and plant protection products to organize production.

Within the scope of the raw material planning area, currently, in order to effectively manage and organize the production of forest planting and raw material purchasing in the planned area to ensure raw materials for Nghe An Wood Processing Factory, May Forestry Joint Stock Company has established 2 affiliated raw material development joint stock companies, including the Northeast Raw Material Development Investment Joint Stock Company to manage investment and purchase raw materials from Yen Thanh, Do Luong, Tan Ky districts, Hoang Mai town; Phu Quy Raw Material Development Joint Stock Company to organize investment and purchase raw materials in Quy Chau, Quy Hop and Nghia Dan districts.

At the same time, May Forestry Joint Stock Company will coordinate to purchase raw materials in Con Cuong, Anh Son and Thanh Chuong districts to form a widespread raw material area in a systematic and sustainable manner. Regarding the mechanism for developing raw material areas, on April 1, 2016, the company issued Official Letter No. 90/CV/2016/MF JSC to the Department of Agriculture and Rural Development and the People's Committees of the districts on "Policy on purchasing raw wood materials and organizing forest planting on planned land to serve the Nghe An MDF Wood Processing Factory", clearly demonstrating the synchronization, rationality and harmony of interests between forest growers and people in the raw material area. That is the investment policy, lending interest support for forest planting applied according to the investment rate as prescribed by the Government in Decision No. 147/2007/QD-TTg including the policy of seedlings (planting and replanting) 1,820 trees/ha, organic microbial fertilizer 332 kg/ha, termite killer 3 kg/ha... with the condition that forest planting households commit to reselling 100% of wood materials to investors when harvested according to the market mechanism at the time of sale.

In addition to the policy of investing in planting new raw material forests, the superiority of the purchasing mechanism, price compensation, transportation subsidy, and flexible payment mechanism issued by the Nghe An MDF Wood Processing Factory has truly harmonized interests, creating favorable conditions to support forest growers in order to closely link the factory and the raw material area. Accordingly, the factory stipulates support for raw material purchase price compensation from 80 km or more at 3%, and 120 km or more at 5% of the purchase price at the factory gate. This support amount must be paid by Party B (the purchasing party) to forest growers who sell wood in accordance with the purpose of increasing income for forest growers in remote areas.

Workers work on the wood panel processing line. Photo: PV

Mr. Nguyen Tho Canh - General Director of TH Raw Material Development Consulting Joint Stock Company affirmed: "With the initial investment mechanism for seeds, fertilizers, termite killers without interest until harvest and supporting agricultural investment for people, it has basically solved the capital problem of people in the Western region in the condition of having production materials but lacking initial investment capital. At the same time, the company also ensures the commitment to purchase all raw materials at market prices, ensuring peace of mind for people in the raw material area".

Obviously, with the synchronization and flexibility in the investment mechanism for planting new raw materials, purchasing mechanism, payment mechanism... of Nghe An Wood Processing Factory, it has created trust and motivation for the development of raw material forests of the people, establishing a sustainable partnership between the factory and the people of the raw material area in the Western region of the province.

PV Group