Wednesday, 9 November 2016

The role of ACIAR’s forestry research projects in supporting new policy directions in Lao PDR

In Lao PDR, the government has set strong policies supporting forestry, including a target of having 70% of the country under forest by 2020 and a recently promulgated Prime Minister’s Order that aims to boost production and trade of value-added wood products in Laos, by banning the export of unfinished wood products and requiring wood processors to use planted timbers.

While these policy settings present significant opportunities for smallholder tree growers and the wood processing industries, the Lao forestry sector is not as well developed as those in neighbouring countries like Thailand or Vietnam, which means there will be many challenges for the Lao forestry sector to face. Fortunately, ACIAR has been supporting collaborative research on teak agroforestry and value added wood processing for the  past decade and therefore there are many research findings from the ACIAR projects which could help Laos to achieve its forest policy goals.

Farmer and project staff in teak plantation. Photo: Tony Bartlett

Teak wooden furniture at Lao Furniture Co. Photo: Tony Bartlett
ACIAR’s planted log value chain project (FST/2010/012) in Lao PDR is nearing the end of its 4.5 year life and the project team has generated some significant policy and technical outputs, as well as achieving substantial economic and social impacts through its work with private sector wood processing and manufacturing companies and local communities that grow teak. Research and development plays an important part in supporting the development of an internationally competitive value-added wood processing sector, particularly when those industries move from utilising large logs from native forests to small diameter logs grown by smallholders as these timbers have different properties and require specialised timber processing techniques.

In the Luang Prabang province in northern Laos, smallholders have established about 15,000 hectares of teak plantations, yet to date many of the have failed to realise significant economic benefits from these investments partly due to the challenges of accessing timber markets. Australian scientists have analysed the current regulations and transaction costs associated with harvesting and transporting planted timber and produced recommendations on how these systems could be made more efficient. The project team has also worked with two communities in Ban Xieng Lom and Ban Kok Ngiew villages to investigate the feasibility of grower groups undertaking value added processing and facilitating collaboration between smallholders to market their timber.
Basic wood machining facilities at Niphone factory. Photo: Tony Bartlett
Wooden chairs made by Piphone factory. Photo: Tony Bartlett
The project has assisted the Ban Kok Ngiew growers group to develop a wood enterprise in the village to develop a local market for their teak. A local entrepreneur, Mr Niphone, established a value added processing centre in 2014 and he borrowed money to purchase the processing equipment. The small factory suffered a significant setback in September 2014 when it was flooded during Typhoon Kalmaegi, but it is now fully operational again and producing good quality furniture.

Through the ACIAR project the grower’s enterprise got connected with the owner of the Lao Furniture Company in Vientiane, who now buys some of their furniture. The group received training on developing business plans, grading and drying timber and gluing wooden furniture. This has led to improved quality of his furniture, which can be more easily sold into local and national markets and as a result Mr Niphone explained that the enterprise is buying increased quantities of teak logs from the growers group.

The project has also worked with a number of small-medium enterprises and larger wood manufacturing enterprises around Vientiane. Two of these companies, Khampai Sana and Lao Furniture Company have comparatively substantial factories producing more sophisticated wooden products, such as larger items of furniture, wooden doors and carved wooden products. These companies have participated in various training programs designed to improve the quality of the products produced at the factories such as ensuring that timber is properly dried before it is manufactured into finished products. Both the companies employ a lot of women in their factories with Khamphai Sana increasing its ratio of women to men workers from 20:80 to 50:50 during the life of the project. The manager of the Lao Furniture Company, Mr Thongsavanh Soulignamat, thanked the project leader, Dr Barbara Ozarska from the University of Melbourne, for the project team’s assistance indicating how important it is to build capacity within the Faculty of Forestry at the National University of Laos and also in the wood processing factories in order to help the Lao forest industries to meet the Government’s requirements.
Dr Barbara Ozarska and Mr Thongsavanh Soulignamat. Photo: Tony Bartlett
Women working at Lao furniture Co. Photo: Tony Bartlett
This ACIAR forestry project clearly demonstrates the role that research can play in improving the efficiencies of wood  processing industries and thereby generate increased employment opportunities, including for women, and enhanced incomes for the farmers who grow the teak timber. ACIAR has recently decided to continue this theme of research in Laos and is currently finalising the design of a follow-on project, which should commence in April 2017. The new project will continue the policy research on enhancing the value chain efficiency as well as work with grower groups and wood processing industries. A new dimension of project will be research and development related to the production of veneers from planted logs, utilising low cost spindle-less lathe technologies, which are currently not used in Laos.
Author: Tony Bartlett, Forestry Research Program Manager

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