Working towards greater community control over land, forests and natural resources

Vietnamese companies eye rubber-processing in Oudomxay

Vientiane Times, 23 April 2014

A Vietnamese company has shown interest in building a rubber processing factory in Oudomxay province despite high competition from Chinese investors. The Provincial Planning and Investment Department’s investment promotion section Deputy Head, Ms Maly Panyasith told Vientiane Times on Monday that the company had proposed the idea to provincial authorities however it has yet to begin any operations.

The provincial governor has approved the proposals of three Chinese companies to construct rubber-processing factories in the province with only one factory so far in the first stage of processing, she said. Ms Maly said construction was underway on the two other companies’ processing plants while a fourth Chinese company is in the process of completing documentation.

The province has almost 30,000 hectares of rubber plantation. Most of these Chinese investments are operating under a two plus three system. This system sees farmers provide labour and land while the companies provide technical assistance, saplings and land clearance.

Some other families are contracted via a one plus four system, where people have land for concession and some of the rubber trees belong to the local people. Some rubber trees are ready to be tapped but the majority of them are not yet ready to be harvested. One or two factories are currently unable to collect and buy the produce for processing and export.

While the government has announced a suspension of land concessions for rubber plantations, they are still allowing people to extend their farms. This year, rubber growers in various provinces are struggling with the low price of rubber, which has fallen from 15,000 kip per kg to 7,000-8,000 kip per kg. Most Vietnamese companies are investing in rubber plantations in southern provinces such as Attapeu and Saravan.

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