DECISION No. 160/1998/QD-TTg OF SEPTEMBER 4, 1998 ON THE APPROVAL OF THE OVERALL PLANNING FOR DEVELOPMENT OF THE PAPER INDUSTRY TILL THE YEAR 2010

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Regulation on Investment and Construction Management issued together with Decree No. 42-CP of July 16, 1996 and Decree No. 92-CP of August 23, 1997 of the Government;

At the proposal of the Ministry of Industry (in Official Dispatch No. 1178/TT-KHDT of April 18, 1998) and proceeding from the evaluation report of the Ministry of Planning and Investment (in Official Dispatch No. 5788/BKH-CN-VPTD of August 19, 1998),

DECIDES:

Article 1.- To approve the overall planning for development of Vietnam's paper industry till the year 2010, which has been elaborated by the Ministry of Industry, with the following principal contents:

1. The objectives:

The development objectives of the paper industry till the year 2010 are: To tap and develop all production resources, thus meeting 85%-90% of the domestic paper consumption demand, and step by step integrating Vietnam's paper industry into the regional paper industry. To renew equipment and modernize technology(ies), to harmoniously combine new construction investment with intensive investment, expand the existing establishments, develop raw materials areas, to balance consumption with production, export with import, increase the output, better the quality and raise the competitiveness of commodities, thus contributing to the economic growth and the successful materialization of the policy on national industrialization and modernization.

2. The viewpoints:

a) Regarding the technology:

For investment projects on new construction and projects on renovation and/or expansion of the industry's major production establishments, advanced and modern technology(ies) and equipment with high automation shall be used in order to save raw materials, fuel, electric power and production materials, and protect environment according to Vietnamese and international standards. The investment in procurement of used equipment shall be made only for the upgrading and renovation of the existing establishments with small production scale, too old and obsolete technology and equipment, and must be carefully studied for each specific project.

b) Regarding the scale and capacity of investment projects:

The paper industry's long-term development orientation is to concentrate on the large- and medium-scale projects to ensure the efficient production, but for the immediate future, investment shall also be made in small-scale projects in order to make full use of the local advantages in raw materials, materials, market, labor force..., especially in the mountainous and Central Highland provinces.

c) Regarding the planning:

The construction of paper producing establishments must be based on the careful study and evaluation of locations and characteristics of raw materials sources, market demands (local and national market), infrastructure conditions and capability to mobilize investment capital. The planning for development of paper raw materials resources must be in line with the agricultural sector's general planning, associated with the planning for plant varieties, the characteristics of each region in terms of natural conditions (pedological and climatic conditions) and social conditions, and couple with the determination of rational model of production and managerial system in the raw materials areas as well as the policy on raw materials' prices and mode of purchase and supply of raw materials for production.

The paper industry shall have to apply measures to invest in the production of paper pulp, in order to rapidly increase the domestic paper pulp output, and to strive for non-import of paper pulp by the year 2003.

The development of the paper industry, including raw materials areas, must be carried out in a close association with the maintenance of security and national defense, the protection of environment and scenic beauty, the acceleration of production restructure in mountainous, deep-lying and remote areas; and contribute to the agricultural and rural industrialization and modernization.

d) Regarding the mobilization of investment capital from various sources:

To rationally mobilize foreign investment capital while ensuring the leading role of the domestic enterprises, especially the State enterprises. Depending on the characteristics of each project, each locality and each specific period of time, this guiding principle shall be realized to determine appropriate investment forms (domestic investment or joint ventures with foreign parties).

3. The planning's targets:

a) The designed capacity targets:

Unit 2000 2002 2010

Paper output Ton 325,000 375,000 1,050,000

Paper pulp output Ton 216,000 435,000 1,015,000

b) The output targets:

Unit 2000 2002 2010

Paper capacity Ton 300,000 375,000 1,050,000

Paper pulp capacity Ton 215,000 400,000 1,015,000

c) Investment capital targets:

Unit 1997-2002 2003-2010

Investment capital Million

for paper mills USD 1,590 1,690

Investment capital

for development of Million 1997-2010

raw materials areas USD 320

The volume of investment capital till the year 2010 is only an orientation, the Ministry of Industry and the Vietnam Paper Corporation shall base themselves on the practical conditions to make readjustment and/or supplements thereto suitable to the actual situation.

d) The proposed list and schedule: The construction of new production establishments, the renovation and expansion of existing ones, and the proposed land acreage for development of paper raw materials areas are specified in the attached appendices.

Article 2.- Assignment of implementation tasks:

- The Ministry of Industry shall coordinate with the ministries, branches and People's Committees of the concerned provinces and cities directly under the Central Government in organizing the implementation of the planning for development of paper industry till the year 2010 according to the approved contents in this Decision.

- The Ministry of Industry shall coordinate with the Ministry of Planning and Investment, the Ministry of Construction, the Ministry of Defense, the People's Committees of the concerned provinces and cities directly under the Central Government and the Vietnam Paper Corporation in determining investment lists, investment scale and locations of new projects in each period in line with the above-said planning.

- The Ministry of Industry shall, as the branch management ministry, assume the prime responsibility and coordinate with the Ministry of Agriculture and Rural Development, the Ministry of Defense, the General Land Administration and the People's Committees of the concerned provinces in studying, elaborating and submitting for approval the specific planning on raw materials areas as well as mechanisms and policies regarding the raw material trees in the spirit of closely combining the paper production with the supply of paper raw materials, satisfactorily ensuring the interests of tree planters, thus contributing to encouraging and stepping up the movement for planting paper material forests.

- The Ministry of Planning and Investment, the Ministry of Finance, the State Bank of Vietnam and the Ministry of Industry shall seek capital from domestic and foreign sources, including preferential loan capital, ODA and FDI, to meet the paper industry's investment demand.

Article 3.- The Ministry of Industry and the Vietnam Paper Corporation shall base themselves on the planning's objectives to draw up five-year plans and carry out the production and investment activities suitable to the socio-economic development conditions in each period.

Article 4.- This Decision takes effect 15 days after its promulgation. The Ministry of Planning and Investment, the Ministry of Industry, the Ministry of Agriculture and Rural Development, the Ministry of Finance, the Ministry of Science, Technology and Environment, the Ministry of Defense, the State Bank of Vietnam, the General Land Administration, the People's Committees of the concerned provinces and cities directly under the Central Government and the Vietnam Paper Corporation shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister

NGO XUAN LOC

APPENDIX 1

THE LIST OF INVESTMENT PROJECTS IN THE 1998-2010 PERIOD

(Issued together with Decision No.160/1998/QD-TTg of September 4, 1998 of the Prime Minister)

Unit Paper capacity Paper pulp capacity

1. Intensive and extensive investment:

- Bai Bang Paper Company Ton/year 100,000 200,000

- Tan Mai Paper Company Ton/year 65,000 60,000

- Dong Nai Paper Company Ton/year 40,000 16,000

- Viet Tri Paper Mill Ton/year 30,000

- Other projects Ton/year 105,000 80,000

2. New investment:

- Hai Phong Paper Joint Venture Ton/year 50,000

- Cau Duong Timber Factory Ton/year 10,000

- Kon Tum Paper Pulp Mill Ton/year 100,000

- New projects Ton/year 750,000 580,000

APPENDIX 2

REGIONS AND ACREAGE FOR DEVELOPMENT OF PAPER RAW MATERIAL TREES

(Issued together with Decision No. 160/1998/QD-TTg of September 4, 1998 of the Prime Minister)

- The total land acreage planned for new planting: 640,000 hectares

- The total acreage of the existing forests in the planned area: 174,000 hectares

- The total afforestation acreage for natural forest in the planned area: 476,000 hectares

Regions under newly planted forests include:

- The mid-land and mountainous region in Northern Vietnam (already formed): 135,000 hectares

- The Eastern South Vietnam (already formed): 135,000 hectares

- The north-western region of Thanh Hoa province: 50,000 hectares

- The northern region of Kon Tum province: 90,000 hectares

- Hoa Binh - Son La region: 140,000 hectares

- Bac Kan - Thai Nguyen region: 40,000 hectares

- The coastal region of Central Vietnam: 50,000 hectares