Collabor ation for Agriculture and Rural Development (CARD) Program 250 DEVELOPMENT OF RURAL FOREST INDUSTRIES IN VIETNAM Project title: Improvement of operator skills and technology in small rural sawmill s in Vietnam Project c ode : CARD 027/06 VIE Author s: Prof. Peter V inden 1 , Philip Blackwell 1 and Dr. Pham Duc Chien 2 Project Implementing organi s ations: 1 The University of Melbourne, Australian Centre for Advanced Wood Processing 2 Forest Science Institu te of Vietnam SUMMARY This report summaries major achievements of the CARD project entitled “Improvement of operator skills and technology in small rural sawmills in Vietnam”. An extensive survey of the needs of the rural sawmilling industry has identified the current and future prospects for forest industries in Vietnam. It highlights the very significant importance of this industry to the economy of Vietnam and future well being of rural populations. The CARD project has trained a core team of Vietnames e scientists in the technologies (current and future) that will assist the industry to develop. Visits to rural sawmills during the conduct of the survey has provided an audit of their operations (as might be undertaken during a sawmill improvement program ). The opportunity for providing advice on improving the operational efficiency of the sawmill, drying or treatment facility was taken together with on - site training of Vietnam researchers in the application of sawmill improvement programs. Vietnamese res earch staff attended an intensive training program at the School of Forest and Ecosystem Science, Creswick campus, University of Melbourne, Australia and learned about the hands on operation of sawmills, the alleviation of growth stresses; the efficient op eration of kilns and treatment plant, quality control monitoring of finished products, value added manufacturing and new low tech technologies to assist expansion of sawmilling operations into value adding. The same Vietnamese staffs participated in the de velopment of training courses and have actively participated in the training of rural communities in Vietnam in these aspects of wood technology. Detailed analysis of specific sectors (sawmilling, drying and preservation) has highlighted the technical need s of these sectors, the technology options available and the cost / benefits of adopting particular technologies. Very specific recommendations have been provided in each of these sectors as to the best technical and economic (low risk) options available f or expanding into value adding. The haphazard and exponential proliferation of small sawmills has identified the potential for this industry to be self starting and sustainable with appropriate technologies and local investment. However, the survey also i dentifies the fragility of self help initiatives that are dependent on continuing raw material supplies (albeit of low quality) and the scant availability of knowledge and technical skills needed to value - add sawn timber output. Clear policy decisions and action is needed to ensure continuing raw material supply of improved quality, together with appropriate training and the availability of appropriate technologies for value adding that can be taken up through the same process of self - help. At the same time training needs to be provided that will upgrade skills and awareness of OH&S issues. Training materials and infrastructure have been developed and tailored to the requirements identified in the survey. Implementation of policy recommendations from the re ports will have a major impact on the long - term development of the industry and future development of rural communities. CARD 027/06 – Improvement of rural sawmills 251 The most significant outcome of the project is that rural communities have articulated their perception of the future needs of their se ctor, their aspirations and fears for the future as well as their vision of what potentially could develop in terms of expanding their activity. To a greater extent the sawmilling community has articulated optimism in the light of opportunities that are av ailable in developing products and markets. The project has provided the Vietnam Forest Service with a blue print or plan that is relatively low risk in its implementation, but which recognises what has been achieved by the rural community in low tech proc essing of plantation logs and builds on this through a “New Forests” strategy and Government investment in an innovative program of research, training education and out - reach. 1. Introduction An overview of Vietnam’s forest industries and domestic market (Chien et al 2010). Identifies the following salient points:  Sawn timber production in Vietnam exceeds 2 million m3 /annum.  Wood exports rank fifth in importance behind crude oil, textiles, footwear and seafood  Exports increased on average by 43% annually between 2000 and 2008.  Vietnam has become the 4th largest global manufacturer and exporter of furniture that together with handicrafts are exported to over 100 countries.  Domestic production of timber is supplemented by significant imports of unprocessed logs. Fifty - three percent of logs processed in Vietnam are imported. The value of timber imports exceeds US$1 billion.  Vietnam uses 11 million m3 of wood / year of which 57% is used for sawn timber for producing outdoor and indoor furniture and constructio n timber. The percentage end - use of acacia produced by rural sawmills (derived from questionnaires directed at small rural sawmills, (Blackwell et al, 2009) highlights also the importance of the domestic markets for furniture production.  Domestic productio n of raw logs from plantations is expected to grow substantially following the Vietnamese Governments objectives (1998) of establishing a 5 million hectare reforestation program. Various estimates (e.g. MARD, 2010) estimate that by 2020, Vietnam could be c apable of supplying 20 million m3 annually. Currently domestic wood production from plantations is expanding at about 10% / annum. This has offset a reduction in the availability of wood from natural forests.  Seventy - five percent of the current harvest fro m plantations comprises acacia spp. This percentage is expected to increase.  The plantation rotation age for acacia is approximately 7 - 8 years. Logs have a small average diameter of approximately 250 mm. Very little information is available on the rural sa wmilling industry in Vietnam or its prospects. The objectives of this project were therefore to:  Identify and define industry problems, needs and opportunities through a comprehensive survey and review of the rural sawmilling industry.  Establish processes and infrastructure for training and technology development  Develop and conduct training programs to improve operator sawmilling and business skills for trainers and for mill operators.  Investigate demonstrate and recommend more appropriate or alternative t echnologies to improve industry performance.  Develop long - term strategies for industry development 2. Materials and methods An inception meeting of stakeholders from industry, education and research institutes, government, bilateral and multilateral aid a gencies was held to identify industry problems, needs and opportunities. Detailed questionnaires were developed with input from the inception committee. Vietnamese project participants attended a training program in Australia to develop and refine survey m ethodology and review appropriate wood processing technologies. The industry survey Peter Vinden, Philip Blackwell & Pham Duc Chien 252 and review was undertaken by a joint Vietnamese / Australian team in representative provinces, in cooperation with provincial Departments of Agriculture and Rural Developme nt. The survey was conducted in the form of a participatory rural appraisal (PRA). Individual mills were visited and the following types of information sought from owners: log volume input, sawn wood output and grades, price and cost data, end - use markets , equipment used, employee statistics, problems identified by owners, and owner’s views on development needs of industry. A complementary survey was also undertaken to include plantation growers to assess their views on markets and prices and sawn timber b uyers to assess their views on sawn wood products purchased. The findings were supplemented by a separate report outlining the current state of development of forestry and the forest industries in Vietnam, their contribution to the economy and rural develo pment and potential to grow in the future. These reports were used as background to developing more detailed reports on individual sectors of the industry including sawmilling, wood drying, preservation, forest industries education and training, research a nd extension. Structured programs of sawmill training for rural communities were developed based on the needs analysis identified in the survey of rural sawmills. The focus for this training was technical rather than training in business skills, since it was anticipated that this was the area of greatest need. Course materials in the form of Technical Notes and overheads were developed for these courses. A “train the trainer” course was held in Australia for Vietnamese participants and again in Vietnam. Fo ur sessions of rural training were completed successfully by the CARD project and feed - back obtained from course participants. 3. Research results and discussions Survey results from the small rural sawmilling industry highlighted a chronic problem for mo st rural sawmills in ensuring an adequate and consistent supply of logs for their businesses. To a greater extent the use of small - scale low capacity horizontal bandsaws can be viewed as “opportunistic processing of raw materials as and when the opportunit y arises”. The current focus of raw material (acacia) producers is to produce wood chips for export. Wood chips represent a low value product and there is enormous opportunity loss in satisfying local demand for furniture and potential markets in building and construction that have not been realised. The absence of any planned long term supply of logs to rural sawmills servicing the domestic market means that there is insufficient security for any entrepreneurial activity to either invest in kiln drying equ ipment or sawmilling equipment. The problem is difficult in Vietnam because of a shortage of suitable forestry land, the small size of farms where farm forestry might be practiced. Analysis of the forests industry sector highlights a number of important a ttributes impacting on future directions for the industry. Firstly the forest products industry is an important export - earning sector that should continue to expand in the future. Protocols need to be in place to ensure that pests and diseases are containe d and are not imported with unprocessed logs. Control methods need to be in place pending outbreaks of timber and forest diseases. Export of furniture and crafts requires similar safeguards i.e. inspection to ensure that exports are free of any pests that may lead to barriers being imposed because of potential infection risks in the importing country. There is increasing international awareness of the importance of containing and minimizing risks of disease transfer between and within national boundaries. D omestic production of timber destined for high value uses such as furniture manufacture or export needs to be free from sap - stain that may arise during log handling and transport. There is an unrealized market potential for domestic timber production to be used in construction. Realisation of this potential demand needs to be preceded with the implementation of some preservative protection against termites and decay that will be required for sapwood protection. CARD 027/06 – Improvement of rural sawmills 253 Results of an intensive survey undertaken of t he rural saw - milling industry engaged in the processing of acacia and eucalyptus species Vietnam identified that approximately 90 % of the rural sawmills operating in Vietnam are family businesses. Ten percent are private companies. The growth in rural saw mills has been relatively recent. Of all the sawmills interviewed none had been in operation longer than 18 years. The average time that sawmills had been in operation was 5.3 years thus indicating that the expansion of the rural saw - milling industry has b een very recent. This probably reflects the maturing of acacia plantations that forms the raw material base for this industry and the freeing up of the economy to promote entrepreneurial activity. The survey identified that a large number of the rural mill s only operated part time. Table 1. Percentage number of sawmills operating full time Region Full time operation North 25 Central 52 South 47 However, of those mills that indicated that they were operating full time a large number identified reas ons as to why there were substantial periods of down time. Key issues comprised: Lack of a c ontinuity in the supply of logs; Inconsistent markets. Other reasons identified included: That they only supplied local needs that were seasonal or That they s upplied specialised end uses such as coffins, joinery etc. Bad weather and Inconsistent power supply. Despite a potential over capacity for sawing the available raw material and inadequate markets, 44% of sawmills indicated either plans to expand or a wi sh to expand their activities. Target expansion areas were primarily furniture manufacturing (78% of respondents) of whom 21% indicated that they would like to focus on high value export markets. Other markets included handicrafts, and kiln drying of timbe r. Reasons forwarded for identifying these potential opportunities related to a perception that there were substantial market opportunities in these particular sectors. The main obstacles hindering expansion related primarily to a lack of funding followed by the lack of available skills. Other issues included the availability of quality raw material, lack of good managerial skills, a lack of knowledge and unstable market conditions. In most instances, there was a perception that there was an expanding marke t for furniture and that expansion into such areas would stabilise demand for sawn timber. Fig 1 . Typical verticcal sawmill with carnage that moves the logs past the saw Fig 2 . Typical horizontal sawmill with operators pushing the saw over the log Saw - milling equipment (horizontal and vertical bandsaws) have been manufactured almost exclusively in Vietnam. Mill expansion usually involved purchasing addition mills. Most sawmills also owned circular saws. These have been introduced more recently for recutting flitches into sawn timber for furniture and other end uses. Virtually all mills had rudimentary saw doctoring capability. The equipment was purchased new. However, skills in saw doctoring varied enormously between mills. None of the mills survey ed indicated any modifications to purchased equipment indicating that in general the saw - milling equipment was suitable for the sawing Peter Vinden, Philip Blackwell & Pham Duc Chien 254 of acacias. Only 12% of mills surveyed had plans to upgrade equipment. Emphasis on replacement focused on:  Purchasing ver tical bandsaws because these were more suitable for sawing small logs,  Establishing furniture manufacturing equipment,  Replacing old circular saws.  Further processing undertaken by sawmills to add value include:  Air - drying. Only a third of all sawmills eng age in drying.  Kiln drying is undertaken by relatively few mills, although a number of mills send their timber to enterprises that specialise in kiln drying,  Preservative treatment was being conducted by 13 enterprises  Integration of sawmills into manufact uring was reported and focused mainly on furniture pallet making and construction. Those companies involved in kiln drying were experiencing very serious problems particularly in relation to drying to a consistent moisture content and identifying suitable drying schedules for eucalypts and some native species. The Australian team observed some larger enterprises (not covered by the terms of this survey) that had invested heavily in kiln drying equipment. These kiln were not operated correctly and results for the more difficult to dry species were unsatisfactory, the main cause was lack of training of the operators and limited understanding of the principles of timber drying. Discussions with the kiln operators revealed a genuine interest in learning and getting an understanding of how they could improve the quality of the finished products. Log storage times at the sawmill were on average 1 month in the South 1.1months in Central Vietnam and 0.6 months in the North. The total elapsed time from tree fellin g and transport to the log storage yards was not identified. However, storage in extreme cases at the log yard was reported to be as long as 6 months. Strategies need to be implemented to streamline the logistics of supply to reduce log storage time partic ularly given the incidence of decay that was reported by 29% of respondents. Log supply was identified as a problem for 57% of respondents, mainly because of “availability”. The wet season also compounded the problem often resulting in a discontinuity in s upply. Research needs to address the whole question of log supply. Techniques need to be developed to reduce sap - stain including proper housekeeping techniques at the sawmill to lift logs off the ground and provide timely rotation of the stockpile. This i s needed to avoid the development of a decay environment in the yard. The biggest problem (25% of respondents) in relation to log quality was the presence of sweep (i.e. bent logs). Inevitably sweep resulted in the crosscutting of logs into short lengths. The most common log length was 2.4 metres. An end use analysis of timber derived from the survey is summarised in table 2. CARD 027/06 – Improvement of rural sawmills 255 Fig 3 . Two methods of air drying typical for sawmills in Vietnam Table 2. End uses of acacia sawn timber in V ietnam by region End use Total Vietnam North Central South Furniture 42% 57% 48% 27% Construction 26% 34% 28% 21% Flooring 2% 2% 5% 0 Pallets / Crates 24% 2% 19% 42% Unknown 1% 1% 1% 0 Other 5% 5% 0 10% TOTAL 100% 100% 100% 100% Fig 4 : I nside a kiln Fig 5 : Pressure treatment vessel in large sawmill These statistics highlight a very high proportion of timber being used in furniture manufacture, particularly in North and Central Vietnam. In the South, pallets and crates domi nated the market. In construction, timber is used mostly for formwork (shuttering for concrete). This is a relatively low value (but important) end use and the life cycle for the product is relatively short. Pallets and crates representing 51% of the marke t in South Vietnam comprise low value markets. Timber is usually rough sawn with no value adding in terms of drying or machining. Quality requirements for this market are also relatively low. Once again the life cycle is relatively short. Furniture and flo oring represent high value markets. Expansion in these markets is hampered by an apparent shortage of suitable Peter Vinden, Philip Blackwell & Pham Duc Chien 256 logs. Limitations in the availability of longer logs, which is also frustrated by the logistics of transport and man handling will also limit ma rket development in construction. There is an expectation that the domestic furniture market will continue to develop as marketing and distribution become more sophisticated and better quality logs become available. All respondents to the survey completed a swot analysis (strengths weaknesses, opportunities and threats). To a greater extent many of the strengths were also identified as weaknesses Strengths  Cheap labour  Experience  Easy to run business  Cheap equipment Weaknesses  Technology and equipment is old  Lack of knowledge in marketing, business and management skills  Lack of finance  Unstable market demand  Space for expansion is limited Opportunities  Expanding into furniture manufacture  Government policy that allows a sawmill to run its own business  Inc reasing plantations  Increasing demand for products  Open markets. Threats  Competition  Unstable markets  Policy change  Unstable log supplies  Safety,  Unstable log supply,  Simplicity of products  Lack of skilled workers,  Small size of business  Limited inves tment funds A summary of industry attitudes towards current training in wood processing is summarised below. Data has been amalgamated for all regions (i.e., North, Central and South). Table 3. Survey analysis of past training experience by sawmills (Un it % ) Staff receiving training in the past 13 Enterprises interested in receiving training 73 Enterprises indicating that the quality of existing training courses was a problem 53 Enterprises indicating that the training in the past wasn’t relevant to their needs 63 The survey analysis of past training experience in forest industries in Vietnam (Blackwell et al 2010) poses a serious problem, firstly because of the low incidence of staff and labour working in sawmills receiving any training, secondly be cause literacy levels in this industry are very low, thirdly because of the number of sawmills indicating that the quality of training was a problem and fourthly because of the number of enterprises that felt that the training available wasn’t relevant to their needs. On the positive side, 73% of enterprises indicated interest in receiving training. The low quality of training and the relevance of the training that is provided rank very high in terms the problems identified by the industry and probably acco unts for the low uptake of training that is provided. The loss of labour arising from staff attending training courses is also a significant factor indicating that training provision should be mobile and centre around clusters of mills. Table 4. Survey an alysis of training problems Training Problems Ranking Low quality of training. 73 Fees are too high. 0 Loss of labour. 40 The training is not relevant. 63 Training is not suited to the equipment. 20 The distance is too far for training. 13 The equipment at the institute is too old. 3 The same questionnaire attempted to prioritise the topics that enterprises felt were important. CARD 027/06 – Improvement of rural sawmills 257 The topics have been ranked based on the priority accorded by those enterprise s interested in receiving training (table 4 ). Table 5. Ranking of training topics Topic Ranking Further manufacturing 13.4 Saw Sharpening 12.2 Sawmill Practices 11.8 Marketing 11.5 Business management 9.1 Air Drying. 9.1 Pr eservation 8.7 Equipment 8.7 Kiln drying 7.5 Wood properties. 4.7 Sawmill safety 4.0 Saw maps 3.2 Sawmill owners clearly identify further manufacturing as the highest priority, followed closely by saw sharpening, sawmill pract ices and marketing. We believe that this highlights concerns on the part of sawmill owners who are focussing on how they can add value to their current sawmill businesses, through better hands - on skills; how marketing can improve their sales performance an d how their day to - day performance can be lifted through improved saw sharpening and better sawmill practices. A second tier of skills focuses on business management, drying (air drying followed by kiln drying), preservation and equipment handling. Element s of enterprise management that need further development include:  Information Technology and Communication.  Project Management.  Leadership and Working in Teams.  Service Quality.  Occupational Health & Safety.  Managing Staff  Financial Management for Resource Ind.  Forest Products Marketing There are natural groupings for subjects to provide intermediate qualifications. Ideally a National Certificate, National Diploma and National Advanced Diploma leading to articulation into undergraduate qualifications. 4. Conclusions The survey provides a snap - shop of a rural industry that has expanded very rapidly in the last decade following the maturing of acacia and eucalypt plantations. There are similarities in the responses to the survey conducted in North, Central a nd South Vietnam. The expansion has arisen as a result of government policy that has encouraged entrepreneurship and market freedom, a cheap labour force, cheap raw materials (logs), cheap robust saw - milling equipment that has coped with the relatively sma ll diameter logs and a Vietnamese work ethic that has succeeded in building an important rural industry that has flow on benefits to the local community. The first question that arises is whether the “old fashioned” saw - milling equipment has served its pur pose and whether more sophisticated saw - milling equipment should be encouraged. In the short and medium term the answer to this is probably no. Sawmill efficiency (conversion of logs into sawn timber) is amazingly high given the quality of logs that are av ailable to most of the rural sawmills. It is unlikely that an improvement in yield could be achieved by introducing more sophisticated equipment. A very high proportion of sawmills are not operating to full capacity. Equipment breakdown was not identified as a core reason for equipment working below capacity; rather raw materials supplies and inconsistent markets were identified as primary reasons. Higher cost more sophisticated sawmills would exacerbate this problem. The capital cost for establishing a hor izontal Vietnamese sawmill is very low, US$3 - 4,000. The fact that the sawmill is not operating to capacity is unimportant in terms of paying off capital, whereas the introduction of more sophisticated in - feed and out - feed systems and automation would see m ore than a hundred fold increase in the capital investment needed. This changes the nature of the Peter Vinden, Philip Blackwell & Pham Duc Chien 258 business from being low cost, rural, part time, seasonal and flexible to being full time, ideally 3 - shift, inflexible, labour reducing industrial production. Transportation costs for logs to larger fewer mills would increase. Many of the locations currently used by small horizontal sawmills would be totally unsuitable for expansion into larger mills since many are on sites that can’t expand or are located adjac ent to dwellings. Potentially there is no value to be achieved from the government providing financial incentives for establishing more low cost sawmills. The investment needed to establish new mills is low and is best left to market forces. However, at th e same time as the survey was conducted audits were undertaken of kiln drying operations. Many of the kilns inspected were imported and of high quality. In addition Vietnamese manufactured kilns ranged from being well - designed units that met the requiremen ts for drying acacia and eucalypt species, through to poor quality in - house built units, which produced questionable quality material. However, operation of all of these kilns was sub - optimal due to the failure to use fairly basic drying principles and uti lisation of standard monitoring equipment (i.e. wet bulb sensors) to ensure correct operation. In other words drying was achieved using an oven or ‘hot box’ rather than a properly controlled dry kiln. The inevitable consequences of this resulted in drying degrade, non - uniform moisture content and / or over drying. This is a training issue since most of the kilns audited had the equipment available for monitoring relative humidity via wet bulb sensors that inexplicably at times had been disconnected. Most dr ying operation failed to use baffles. This inevitably led to inefficient energy use and variable wood moisture content both within and between boards, on completion of drying. In addition there appeared to be a lack of adherence to species - specific drying schedules. Whether the best kilns are being used for Vietnamese conditions is also an issue (a research and technology transfer issue). Whilst many sawmills interviewed in the survey identified kiln drying as a business opportunity, clearly there is not en ough sawing capacity for each individual mill to justify establishing its own drying facilities. Air - drying requires a great deal of skill and a surprisingly low percentage of sawmills engage in air - drying. Space is an issue for many mills as is training i n air - drying practices. There is also a question of the minimum moisture content that could be achieved using air - drying. It is anticipated that this would be approximately around or just below fibre saturation point (fsp). The utilisation of solar drying technology is considered to be a viable and economic alternative option. Initial research results indicate that significant savings can be obtained. All of these issues have been reported separately and recommendations made to facilitate an industry impro vement in drying. High quality seasoning and drying are prerequisites for successful furniture manufacturing. Many small rural sawmills have their sight set on furniture manufacturing as a logical extension of their sawmill activities. Sap - stain, decay and insect attack are important issues in Vietnam primarily because of climate. As soon as a tree is felled it becomes susceptible to this rapid process of colonisation. The lesson is that trees should be left standing until the supply processing chain has be en organised and timetabled. Both the survey and quality auditing of the stored logs and finished products indicate an industry – wide problem. Sap - stain is common in logs. Pines and rubber - wood are particularly vulnerable to sap - stain, much more so than aca cias and eucalypts. But it is still a problem with these species. Apart from the delays in log transport, other issues identified include proper housekeeping of logs at the mill site; the need in some severe cases for prophylactic treatments at the sawmill to alleviate stain and decay. A high volume of acacias is used in furniture and the survey indicates that this market will continue to grow and substitute the use of acacias in low value uses such as packaging, crates, boxes etc. Much of the domestic furn iture uses a dark lacquer finishes. This is an effective strategy in masking stain in wood. However, as the market expands, fashion may change to bring about a demand for furniture that displays the intrinsic species characteristics. This is the case for s hort clear CARD 027/06 – Improvement of rural sawmills 259 lengths of rubber wood for export. The market requires a light colour. Export rubber - wood is inevitably preservative treated to prevent sap stain. Ten years ago this would have involved treatment with relatively high concentrations of PCP (Penta chlorophenol – (5%) mixed with borax - (1.5%). Fortunately given the dioxin impurities in PCP this practice appears to be history and treatment now focuses on the use of boric acid plus borax that is benign from an environmental and human toxicity perspecti ve, although the preservative is still quite toxic to fish. Given the trend towards using acacia for furniture, preservative treatment is potentially not an issue for most sawmills. Occupational Health and Safety is a key issue for rural sawmills. Fortun ately the survey identified less of a problem in terms of accidents than was anticipated given some of the work practices and the total absence of any work - place control for the prevention of accidents. These issues have been evaluated, reported and recomm endations made to improve the working environment. Survey results as to sawmill owner preferences in relation to training, placed a low priority on OH&S. Whilst this could possibly be justified based on survey results, issues such as noise and dust were no t considered by the survey of owners but were audited at the time of the survey. Long - term health issues (nose, lung capacity hearing and eye - sight) are of concern. Implementation of current Vietnamese legislation in relation to OH&S needs to be taken on b oard by mill owners. OH&S training is obviously one of the key strategies in implementing change in the work place. Future education training and research needs is reported separately but takes into account the findings from the survey. The survey provide s some quantification of the basic needs of rural saw milling in Vietnam. The exercise provides invaluable information from which strategies can be developed for improving the performance of the industry. Key issues identified by the survey that require fu rther investigation include the lack of information in relation to log supply. This is an issue that needs to be addressed by the Vietnam Forest Service. Secondly the inconsistent market demand reported by many sawmills needs to be addressed. This needs an industry wide or cluster approach to providing collective information and quality standards and finally, mechanisms to promote the development of value adding industries such as kiln drying and furniture manufacture. The prosperity of rural communities is tied to developing a cash economy and demand for products. The development of new rural industries such as is provided by forest plantations and furniture manufacturing are often pivotal in generating cash flow. The key to developing dynamic and sustainab le forest industries in Vietnam, whether focused on the industrial sector or rural sector or both, is through the establishment and support of a highly motivated mission orientated research institute focussed on such an outcome. As an industrial raw mater ial plantation grown wood has to meet the costs of growing the crop on a sustainable basis. Oil and coal are non - renewable and there is no replacement cost associated with mining these resources to exhaustion. However, with the potential introduction of ca rbon tax, this anomaly to a level playing field should see adjustments in the relative cost of wood as a raw material. The issue is how do we ensure that wood products are credited with carbon storage and the inevitable life cycle benefits that undoubtedly accrue? Clearly Government policies and protocols need to be applied justly so that the true life cycle benefits are captured. The role of forest product research laboratories is therefore changing and needs to change quickly. Governments have been slow to identify the vital role that industrial forestry and wood products can make in rolling back CO2 emissions and sustaining rural infrastructure. This report recommends that a Forest Products Laboratory (Centre of Excellence) is established in Hanoi under the banner of the Vietnam Forestry Department to provide such leadership. The detailed survey of rural sawmills undertaken as part of the CARD project together with comments received from CARD courses provided to sawmill workers and sawmill owners identif ied the following [...]... building of appropriate kilns In an era of rapid global warming and peaking oil and natural gas production, forest ecosystem management of our relic forests and reafforestation of redundant land, should be at the forefront of any campaign to roll back our carbon footprint whilst at the same time maintaining or increasing economic productivity and environmental improvement There is an overwhelming need... research student jointly in Vietnam and Australia, with the objective of training the person for implementing the “Wood drying improvement program” The development of new drying technology should focus on: CARD 027/06 – Improvement of rural sawmills    Solar kilns using Australian technology in the first instance, to develop demonstration models for solar drying in Vietnam This could be followed up... sector in many parts of the world Global warming and future uncertainty means that we can no longer afford to remain inactive or hide behind a blind belief that market forces will bail out the need for making responsible decisions for future generations In an era of global warming and potential energy shortages, we have to find alternative means for maintaining productivity in industrial manufacturing,... expansion of relevant forest industries The objective is to systematically substitute the use of oil, petrol, resins, steel, aluminium plastics and concrete and reduce our dependency on oil whilst at the same time expanding productivity and standards of living as well as providing a sustainable raw material supply for rural industries This need is urgent in the face of unprecedented population growth and. .. manufacture Comparative investigations are needed to determine the best locations for solar drying (using the regression analysis models identified in this project) throughout Vietnam A model should be developed for the creation of modern drying plants for clusters of small- scale sawmills and/ or clustering existing sawmills into larger units to improve processing and drying techniques Funding is needed to... exploitation of non-renewable resources, global warming, rural destabilisation and environmental impoverishment Conservation of the past is not enough The objective of “New Forests Vietnam is to engage in the future, to create a future that is viable and sustainable for future generations Worldwide there is increasing recognition of the role of forestry and forest industries in rolling back global warming;... warming; providing a stable ecology for native vegetation and raw materials for new sustainable industries A cringe faction will rigorously dispute the need for intervention in these industries However, the lack of engagement by the forestry sector in relation to global warming and its pivotal role in the debate on climate change and reducing fossil fuel consumption is pointing to a market failure of this... provision of this service It is anticipated that the service would take approximately 1week and could involve staff from the wood protection and sawmilling research groups Further research is needed to develop drying and processing methodologies specifically for plantation grown acacias for use in furniture production in Vietnam This could involve the training of a Masters research student jointly in Vietnam. .. timber products are clean of pests and diseases that might be exported with the products Working with researchers and educationalists to ensure that research education and training needs are relevant Maintaining and distributing national standards relating to wood preservation (i.e acting as secretariat to the TPA) Providing field staff to monitor adherence to national standards This report recommends... scientists is needed in the wood drying Skills include: Process control scientist Wood drying experts (2) Wood Scientist Modelling expert Microwave technology expert A “Wood drying improvement program” needs to be established by the Forestry Research Institute that provides customised advice and generic training on site at each processing facility where drying is undertaken Some nominal charge should . lack of training of the operators and limited understanding of the principles of timber drying. Discussions with the kiln operators revealed a genuine interest in learning and getting an understanding. Agriculture and Rural Development (CARD) Program 250 DEVELOPMENT OF RURAL FOREST INDUSTRIES IN VIETNAM Project title: Improvement of operator skills and technology in small rural sawmill s in Vietnam Project. review of the rural sawmilling industry.  Establish processes and infrastructure for training and technology development  Develop and conduct training programs to improve operator sawmilling and