The Government of Lao PDR strongly supports the development of a sophisticated wood processing industry, as expressed in the Forestry Strategy to 2020 and the Agricultural Master Plan (2011-2015). A recent Prime Minister Order (No. 15/PM/2016) specifies that all types of wood must be turned into finished products that meet defined standards before they can be exported. The implementation of this Order will require strong support to wood processing enterprises through capacity building, training and product development.
The wood manufacturing industries in Laos are in their infancy compared to those in neighbouring countries. There is already some 215,00 ha of planted teak, eucalyptus and acacia for which there are limited markets, and the wood processing sector has not yet adopted new processing technologies that are widely used in Vietnam and China. Research and development is needed to support the development of new processing capability and a range of Engineered Wood Products (EWPs) that can be produced from small diameter timbers. Specific skills and knowledge are lacking on the processing of wood for appearance, structural and housing construction purposes and on enhancing termite and decay resistance in the timber products. Further research is needed on aspects of the timber value chain between the plantation and processing industry to ensure efficient supply of wood resources and provide necessary information to support business cases for the investment in new processing facilities.
Two previous ACIAR projects: FST/2005/100 “Value-adding to Lao PDR plantation timber products” (2007-11) and FST/2010/012 “Enhancing Key Elements of Value Chains for Plantation-Grown Wood in Lao PDR” (2012-16) have enhanced knowledge and capacity in wood science and processing and identified policy and administrative issues that impede the development of an efficient and competitive smallholder plantation sector and wood processing industries in Laos. There are opportunities to utilize the smallholder plantation grown wood to produce a range of appearance and structural EWPs for the rapidly growing markets related to construction, furnishing and joinery activities in Laos and the region. In parallel, the Australian industry is still facing major challenges in adding value to underutilised plantation resources, such as low grade pine and hardwoods grown for fibre. The goal of the current proposal is to assist the Lao and Australian forestry sectors to seize these opportunities.
Research questions to be addressed by this project are:
- What are the key elements of the policy, governance and administrative environment that constrain the development of plantation forests and value-adding to their products in Lao PDR, and what are the most important and promising pathways for policy change to address constraints?
- What are the principal value chains for Lao plantation resources, what are the major impediments to resource availability for domestic processing, and how might they be addressed?
- What are the barriers that prevent SMEs in Laos from investing and developing new technologies and how can they be rectified?
- How might new high performance EWPs, based on veneer, laminated wood and other composite materials from small diameter logs be developed from available resources in Lao PDR and Australia?
- How can the gender balance of the Lao plantation and wood industry be improved to increase the role of women?
- What are the factors (including private sector engagement) which need to be in place to achieve significantly higher levels of viable domestic downstream processing to increase the contribution to economic growth, employment generation and greater participation in industry?
- Which of the project capacity building strategies will improve the international competitiveness of the Lao wood industries?
Project aim and objectives
The aim of the project is to support the development of innovative wood processing industries to enhance markets for planted timber resources within Lao PDR.
Supporting Objectives will be to:
- Identify the key elements of the policy, governance and administrative environment that impact the development of plantation forests and value chains in Lao PDR, and other constraints to improving plantation value chains, and develop strategies for engaging with this environment and improving plantation value chains.
- Develop and adapt innovative technologies for the production of high performance and commercially competitive engineered wood products (EWPs), based on veneer and laminated wood from small diameter logs, and also composite products based on wood and other materials.
- Improve capacity, in both Lao PDR and Australia, with respect to the development and production of engineered wood products based on veneer, laminated wood and other composite materials and their profitability and competitive position vis-à-vis other building materials.