BIZ-MANUFACTURING: VIENTIANE- Nation doubles export of finished timber products

The export of finished wood products increased by 107 percent in 2018 after the government banned the export of unfinished timber and promoted value-adding through the production of finished goods.

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Prime Minister Thongloun Sisoulith issued Executive Order No. 15 in 2016, imposing the ban and promoting the production of finished wood products for export.

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The order also demanded action to regulate timber businesses, furniture plants and sawmills along with efforts to inspect the supply chain to address illegal logging.

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Exports of finished wood products in terms of both volume and value increased significantly last year compared to 2017, according to the latest report from the Ministry of Industry and Commerce.

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The value of exports exceeded US$40.335 million (more than 345.6 billion kip), an increase of 107 percent against 2017.

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Some 64,109 cubic metres of finished wood products were exported last year, an increase of 44.38 percent compared to the year before.

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Given that the volume of exports increased by 44.38 percent while the price more than doubled meant a great deal of value had been added to locally-made products, officials say.

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This has been possible thanks to improvements in the operation and production of timber manufacturing plants. As of December 19, 2018, there were 1,113 manufacturing plants, and 141 small family-run wood processing plants in operation.

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Many of them have upgraded their operations by installing modern equipment, giving their staff professional training, improving safety, and providing a hygienic working environment.

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Some plants have been cooperating with the Japan International Cooperation Agency (JICA), United Nations Industrial Development Organisation (UNIDO) and other agencies to improve their operations through skill development for their employees, product design, and production cost-cutting.

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Officials say wood product manufacturers have used more plantation trees as their raw material, in line with the government’s policy to reduce the use of timber cut from natural forests.

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Shortly after the imposition of Executive Order No. 15, the government announced an end to the annual logging quota, which had previously allocated 200,000 cubic metres of timber to be cut from natural forests.

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The halt came after the government learnt that large amounts of the wood felled under the quota was exported without being processed in any way, thereby minimising the benefit to the nation. The quota also left loopholes for illegal logging.

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However, where there is a need for tree clearing in a development project, such as hydropower or mining, natural forests are allowed to be cut.

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Although the annual quota has ceased, the nation still has enough timber to meet domestic processing demand, the Lao Furniture Association has said.

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Association President Khamphay Somsana told Vientiane Times previously that domestic timber product manufacturers would not suffer from the quota’s removal, saying that the wood from the available sources – plantations and development projects – was sufficient to feed local demand.

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As part of improvements and regulatory efforts in timber businesses under Executive Order No. 15, as many as 989 wood processing plants and sawmills whose operations contravened the relevant laws were shut down.
Another 1,211 small family-run wood processing plants were also closed.

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Their wrongdoings included operating without a business licence, being located in protected forest areas, and not meeting industry standards.

By Times Reporters

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