Paper mill shuts down due to price conflicts

Prime Minister Nguyen Tan Dung has stopped investment in the State-owned Phuong Nam wood pulp mill in southern Long An Province after seven years of operation.

Last Tuesday, Nguyen Thanh Nguyen, deputy chairman of Long An People's Committee, said the PM told the Ministry of Industry and Trade, the Ministry of Finance and Long An People's Committee to sell the mill by late June.


Nguyen said there were plans to sell the mill to a company that could stop financial waste and serve economic-socio development.

Since 2013, the Long An authority has sent many petitions to the central government about the mill asking for support and for supplies of jute, a raw material used at the plant. However, little was done.

The paper mill, opened in 2007 Thanh Hoa District for US$100 million. It had a capacity to produce 100,000 tonnes of pulp a year. The main raw material was jute.

However after two years, the mill had to stop operating because of conflicts between the mill and farmers about the prices offered and frequent machinery breakdowns.

The Prime Minister has asked the Viet Nam Paper Corporation to take charge of the project in the short term. Long An Province said it would help farmers plant 10,000 hectares of jute to supply the factory.

Long An People's Committee organised many meetings between the two sides with the promise of increasing prices and buying all raw materials from local farmers.

But authorities could not fulfill their promises and the mill at times had to shut down. Farmers lost confidence in the plant and began reducing their cultivation areas