Long An pulp mill spectacularly ignored by investors

09:47 | 07/07/2016
The VND3 trillion ($134.5 million) Phuong Nam pulp mill managed by state-run Vietnam Paper Corporation in the southern province of Long An has been put on sale for numerous years now, however, no investors seem to eye the project.
 

The mill’s construction was kicked off in March 2006, with the initial investment capital of VND1.487 trillion ($66.3 million) by Transport and Communication Development Investment Company (Tradico). The mill was expected to produce the best quality pulp in Vietnam, reaching European standards.

At the time, the province encouraged farmers to grow jute on nearly 9,000 hectares in Thanh Hoa, Moc Hoa, and Tan Thanh districts to supply materials for the mill.

In 2007, the mill entered its test run, and in November Tradico decided to increase the total investment capital to VND2.286 trillion ($102.5 million).

However, the test run was suspended due to the breakdown of the machinery.

In 2009, Tradico was licensed to transfer the pulp mill to Vietnam Paper Corporation. The expected cost of the project increased to VND3 trillion ($134.5 million).

However, after Vietnam Paper Corporation took over the mill, it was upgraded and started operation again, but the malfunctions remained.

Vietnam Paper Corporation invited both international and domestic experts to deal with the malfunctions, but ultimately failed. As a result, the entirety of the machinery was abandoned and the 9,000 hectare jute growing area was wiped clean.

According to a representative of the Long An Department of Industry and Trade, the mill had to suspend operation due to unsuitable technology and machinery.

However, when VIR’s reporter contacted another representative of the department to request information about the origin of the technology and machinery as well as solutions to deal with the unmarketable mill, the representative refused to comment and said that the department did not manage the project’s operation.

According to the Saigon Times Daily, in April 2014, the prime minister directed the Ministry of Industry and Trade to coordinate efforts with the Ministry of Finance and Long An authorities to deal with the project, including the sale. However, as of now, no investors have registered to buy the project.

By By Ha Vy

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