Timber value chain analysis – Field research in central Vietnam

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Visiting Acacia hybrid area in Phuloc district, Thua Thien Hue Province (Prof. Pretzsch, myself, and two members of Forest Sustainable Cooperative) (©Tham)

Hi. My name is La Thi Tham, a Phd student from Vietnam. My research is about the value chains of Acacia hybrid timber in Thua Thien Hue province, central Vietnam. Particularly, I’m going to compare the value chains of woodchip and furniture made of Acacia hybrid timber and explore the potential impacts of these chains on rural livelihood. I have conducted two phases of data collection which were between March-July 2018 and June-November 2019 in Vietnam.

Recently, Vietnam’s wood processing sector shows significant growth and makes important contribution to the national economy. For example, in 2015, export turnover of wood and wood products was recorded at 6.4 billion USD and around 7 billion USD in 2016. After the restriction of timber harvests from natural forest in 2014, domestic material sources for forest-based industries mainly come from plantation forests of which more than half is under the management of smallholder households (HHs). With more than 500,000 ha of plantation area, Acacia hybrid becomes the most important plantation specie in Vietnam. Acacia hybrid timber is also known to be appropriate for woodchips, pulp for paper production as well as furniture and furniture components which have been marketed domestically and internationally.

Despite that, there are some challenges which Vietnam’s wood processing industry has to cope with, including (i) The raw material volume for the wood processing industry (especially for export demand) depends mainly on imported sources while most of the plantation forest is known as short-rotation characteristic. Acacia hybrid timber accounts for approximately 70% of material source for wood chip production industry which also generally consumes up to 80% of wood from Vietnam’s plantation forests; (ii) More than 50% of plantation forest is controlled by small-scale producers and Acacia plantation forest has been considered as a crucial source of their income. However, research on the production and commercialization system of this timber specie and their contribution in supporting rural livelihood is still limited.

Therefore, I took Thua Thien Hue province where Acacia hybrid has been cultivated for more than 20 years as a case study to analyze the value chains of this timber. Around 70% and 25% of HHs in high- and lowland area of Thua Thien Hue province respectively are involved in Acacia hybrid timber production. Accounted for more than 70% of total timber quantity provided by plantation forest in this province, the utilization of Acacia hybrid timber contributes significantly for socioeconomic improvement apart from its original environmental benefits.

Several techniques were employed for primary and secondary data collection from various sources along the value chains. The major applied methods were review and analysis of secondary data, key informant interviews, household survey, group discussion, in-depth interviews with value chain stakeholders and direct observation.

Normally, the studies focusing on value chain started from the production nodes in the study areas as the relevant data were collected along the different stages of the value chains following the products through different transformation stages. In order to understand profoundly the arrangement of Acacia hybrid timber value chains, two main production areas named Namdong (district 1) and Phuloc (district 2) in Thua Thien Hue province were selected. While district 1 is highland area characterized by the low quality of infrastructure and limited number of wood processing companies; district 2 is well located in lower-land area which is convenient for transportation and connect with processing companies and seaport for exports. Furthermore, three villages in each district were chosen mainly based on their abundance of Acacia hybrid plantation area.

For other participants, such as trader, processing companies, the selection was at provincial level as they can source their material from different production areas. Finally, a total of 300 smallholder producers were interviewed following stratified random sampling method. The sample represented around 10% of HHs engaged in Acacia hybrid production system in each village. In addition, 12 processing companies, eight middlemen were interviewed. Questionnaires were formulated to examine chain stakeholders’ socio-economic characteristics, their production and commercialization activities, their interrelationships, support services and policy issues.

Preliminary result demonstrates that the value chains consist of four core activities: primary production, processing, distribution and end-consumption with the direct involvement of different stakeholders, particularly HHs, traders, processing and exporting companies. In addition, institutional actors such as Forest Owner Association, Forest Protection Department, Ministry of Industry and Trade provide support and manage the chains. The structure of current timber value chains, the main participants and market channels have changed over the last decade. There are at least three major changes that can be seen: (i) the establishment of Thua Thien Hue Forest Owner Sustainable Development Association (FOSDA) as an institutional actor facilitating the linkage between HHs and processing companies, (ii) the growing number of middlemen, (iii) the increasing trend of production volume and trade. In term of governance and coordination forms, the Acacia hybrid timber value chains are driven by exporting companies which are in turn in a captive relation with major importers, while the level of horizontal cooperation among chain participants is rather weak, if not absent.

The main challenge during my field trip was probably the weather. Between May and July is the peak of dry season in central of Vietnam with the outside temperature up to 48-50 degree Celsius, while the rain season normally starts from late August. The rainy season is even known as a symbol of Thua Thien Hue province which rains last continuously for a week or half of month. Both the heat and prolonged rain restrict the activities of transportation for conducting interviews.

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Field trip (Prof. Pretzsch and Mr. Ho Dang Nguyen) (©Tham)

My data collection phases could not be successful without the support of my assistant, Mr. Ho Dang Nguyen. As a lecture at Hue Agriculture and Forestry University, he has not only supported me in travelling, communicating with local people, but also given me knowledge and understanding about the local culture, cultivating techniques and processing procedures of wood-based products. I also would like to express my deep gratitude to Prof. Pretzsch and Prof. Darr for their supervision and colleagues in Chair of Tropical Forestry for their support and suggestions on developing research concept. Many thanks to colleagues at Vietnam National Forestry University, Hue Agriculture and Forestry University, Hue Forest Protection Department, etc. for their great support. Thanks to all interviewees for their time, knowledge and experience.

By La Thi Tham

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