DECISION

APPROVING THE VIETNAM RUBBER CORPORATION'S 2006-2010 PRODUCTION AND BUSINESS PLAN AND DEVELOPMENT ORIENTATIONS TO 2020

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;
At the proposal of the Vietnam Rubber Corporation in Report No. 723/TTr-CSVN of March 29, 2006, and Report No. 1374/TTr-CSVN of June 13, 2006,

DECIDES:

Article 1.- To approve the Vietnam Rubber Corporation's 2006-2010 production and business plan and orientations to 2020 with the following principal contents:

I. OBJECTIVES

1. To restructure products in the direction of coordinated and rational development of industry, agriculture and services with a view to increasing the value of rubber products and commodities and expanding investment in production and services.

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3. To concentrate efforts on planting, processing and exporting rubber as the major task, with priority given to investment in the development of material rubber and deep processing; and, at the same time, to develop other production and business lines such as cow rearing and industrial activities and services in support of rubber planting, processing and export.

4. The annual turnover growth rate shall reach 27% on average in the 2006-2010 period, 12% by 2015, and 11% by 2020.

II. PLAN ON DEVELOPMENT OF MAJOR PRODUCTION ACTIVITIES

1. Planting:

a/ Rubber trees

To invest in intensive planting and efficient exploitation of existing rubber plantations; to continue planting rubber trees in places where conditions permit and re-plant rubber trees by intensive planting, using new varieties to raise their yield.

In the 2006-2010 period: To plant rubber trees on around 70,000 ha at home and in foreign countries. The total area shall be around 290,000 ha, of which the area under rubber for stable business shall be around 180,000 ha. Average yield shall reach 1.9 tons/ha, with that in the Eastern South Vietnam, 2 tons/ha, in the Central Highlands and coastal South Central Vietnam, 1.8 tons/ha. The output of harvested rubber shall reach around 340,000 tons.

In the 2011-2015 period: To complete the program on planting rubber trees on around 130,000 ha (including areas in foreign countries); by 2015, the stable area under rubber shall be around 380,000 ha, including 320,000 ha in the country, with an output of around 400,000 tons, which shall rise to 600,000 tons by 2020.

b/ Coffee trees: To develop Arabica coffee trees in places where conditions permit in the direction of investment in intensive planting of coffee trees on an area of around 1,000 ha and with an output of 3,000-4,000 tons of commodity coffee with specific trademarks. To build an instant coffee-processing plant with a capacity of around 500 tons/year for domestic consumption and export.

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2. Industries

a/ Rubber latex processing industry:

To invest in increasing the capacity of existing processing establishments and building new ones in places where adequate materials are available under planning in order to process the whole of exploited latex of the Corporation and part of other economic sectors. The total processing and consumption output of the Corporation shall reach around 440,000 tons of rubber by 2010 and 650,000-800,000 tons by 2020.

b/ Timber processing industry:

To invest in increasing the capacity of processing timber (mainly liquidated rubber timber) to 70,000 m3 of refined timber and 80,000 m3 of preliminarily processed timber by 2010. The output of commodity timber shall reach around 170,000 m3/year by 2020.

To invest in several new MDF timber-board factories in places where adequate materials are available to increase their output to 100,000-150,000 m3/year by 2010 and around 350,000 m3/year by 2020.

c/ Production of industrial rubber products:

To maintain and develop existing industrial products such as sport balls (5 million balls), sport shoes (2 million pairs) and sport-shoe soles (10 million sets);

To strongly develop automobile tubes and tires and rubber conveyor belts which require the use of natural rubber; on the basis of the rubber market supply and demand and the Corporation's specific conditions, to determine production targets in each period. To develop the production of elastic thread for garment and fashion industries, medical gloves, rubber mattress, and rubber accessories of industrial products.

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3. Development of infrastructure business, construction and real-estate business: To invest in building infrastructures for 5-6 industrial parks covering an area of 2,500-3,000 ha; to build residential centers of 300-500 ha; to build high-rise office buildings, dwelling houses and condominiums with 60,000-80,000 m2/year. In the post-2010 period, to make investment in developing annually an average of 300 ha of industrial parks, 50-70 ha of residential centers, and 20,000-30,000 m2 of high-rise condominiums and office buildings.

4. Service and other business lines: To diversify and expand financial and tourist services; to raise the quality of investment funds, financial and banking services, hospitals, job training and scientific research which are related to the rubber industry, and to make intensive investment in these services in the post-2015 period.

III. MAJOR SOLUTIONS

1. Land: To review the entire Corporation's land use plannings and plans according to the provisions of the Government's Decree No. 170/2004/ND-CP of September 22, 2004, on further reorganizing, renewing and developing state-run agricultural farms. To closely manage and efficiently use allocated or leased land areas. To minimize the use of stable areas currently under high-yield rubber for other trees or for other purposes. The recovery of land areas under rubber for change of land use purposes shall comply with land use plannings or plans already approved by competent authorities; compensation should be made based on the value of rubber trees which is close to the market price.

2. Market: To step up trade promotion and maintain existing markets; to seek new markets; to attach importance to the domestic market, especially industries using rubber materials.

3. Reorganization, renewal and development of enterprises: To reorganize, renew and develop member enterprises according to the roadmap already approved by the Prime Minister in Decision No. 240/QD-TTg of March 4, 2003, and at the same time, step up equitization of dependent units in the 2006-2010 period. For development projects on planting rubber trees, joint-stock companies should be set up to act as their investors. To apply comprehensive solutions for the efficient operation and sustainable development of the Vietnam Rubber Industry Group right after the Prime Minister approves the establishment of the Group.

4. Capital sources: To apply specific measures to mobilize various investment capital sources, including capital generated from the equitization of rubber companies (including issuance of bonds), profits and depreciations of rubber companies, domestic and foreign loan capital for development investment. The Corporation's equity should account for at least 30% of the total investment capital of each project. For projects in deep-lying, remote, border and ethnic minority areas, depending on the annual budget capability, to support investment in infrastructure in service of rubber development and stabilization of local ethnic minority people's life.

5. Human resource development: To work out plans on recruitment of laborers to fully satisfy production development requirements, with priority given to recruitment of local ethnic minority people. To organize regular training and retraining to provide technical knowledge and improve skills for laborers, especially those who directly collect rubber latex and local ethnic minority laborers with a view to raising labor productivity, quality and efficiency.

To formulate programs and plans on (domestic and overseas) training and retraining of managerial and professional officials in order to raise their professional and managerial competence suitable to the market mechanism and the process of international economic integration.

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6. To renew the contracting system and wage payment at enterprises under the Corporation; to assign rubber plantations on a stable and long-term contractual basis to laborers, including package payment of wages (V) and production cost (C2), cost of security and cost of transportation of rubber latex to the factory; the contractual assignment should be combined with close control of technical tapping processes to assure the quality of rubber plantations.

7. To step up agricultural and forestry extension work and apply scientific and technological advances to production; to rapidly transfer and use (even import) new rubber varieties of high yield for planting rubber trees; apply advanced planting methods and renovate the process of tapping rubber latex in order to increase the annual average yield to 2 tons/ha within the entire Corporation. To invest in upgrading the Vietnam Rubber Research Institute in terms of research facilities and personnel to be fully capable of conducting research into the cross-breeding and selection of good varieties of high yield to meet production requirements.

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."

Article 3.- Ministers, heads of ministerial-level agencies, heads of government-attached agencies, provincial/municipal People's Committees, and concerned agencies shall have to implement this Decision.