March 07, 2018

Laos closes wood processing plants to comply with PM’s Order

By:  Somsack Pongkhao, Vientiane Times, March 5, 2018

VIENTIANE - Some 349 wood processing plants and over 1,000 family-based furniture workshops have been shut down since the Prime Minister’s Order No. 15 was issued in 2016.

These drastic measures are intended to reform regulation of the timber industry and ensure that only finished wood products are exported.

Director General of the Industry and Handicraft Department under the Ministry of Industry and Commerce, Mr Manolack Rasachak, told Vientiane Times on Friday that many more processed wood products are now being exported, mainly to China.

“The closer oversight of processing plants not only encourages more investment in wood/timber processing businesses but also generates employment for local people,” Mr Manolack said.

“Most wood processing businesses have improved their operations to satisfy the government’s requirements as stipulated by the PM’s Order No. 15.”

The Order was issued on May 13, 2016, banning the export of all types of unfinished wood products including timber and logs.

This is considered a significant move in the battle to clamp down on the illicit trade in wood. If all parties strictly comply with the order, sawmills and wood processing factories will improve their operations.

As a result of the Order, 349 out of 1,500 wood processing plants and more than 1,000 out of 1,178 family-based furniture plants have been closed.

Authorities have warned the owners of wood processing factories to strictly comply with the law and to pay all taxes owed to the government.

Since the Order came into effect, over 60,000 cubic metres of processed wood products have been exported to other countries, with a total value of over US$30 million.

Mr Manolack said some wood processing plants hired skilled craftsmen from overseas, particularly from China, to make wood products especially for the Chinese market.

“One of the most important things for Laos is to improve the skills of our workers, which is essential if we want to penetrate foreign markets. Our raw materials (timber) will be given to local producers to process, which has the potential to generate more income for Laos,” he said.

Government officials say the enforcement of the Prime Minister’s Order has had a positive effect.

The order has not only helped to address illegal logging but has lent support to the war on corruption in the timber industry.

Despite these significant achievements, Prime Minister Thongloun Sisoulith last year reiterated the need for the sectors concerned to strictly comply with the order as the government wants forestry to be properly managed to ensure a balance between the number of trees felled and those planted.

Sustained management will enable Laos to accomplish its goal of increasing forest cover to 70 percent of the country’s terrain by 2020, which will assist socio-economic development and poverty reduction efforts.

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