Phuong Nam paper mill
The state-owned Phuong Nam paper mill was invested in by the Transport and Industry Development Investment Corporation Tracodi for VND1.5 trillion ($67.5 million). In 2007, Tracodi raised the investment to VND2.3 trillion ($104 million).
In 2009, the mill was transferred to another investor, Vietnam Paper Corporation (Vinapaco) and the capital was raised to VND3 trillion ($136 million).
Phan Thanh Nam, former director of Tracodi, said they only had experience in construction field before starting the paper plant project. Because his corporation didn't have enough money, all of the capital was bank loans backed by government guarantee, he said.
The mill had a capacity to produce 100,000 tonnes of pulp a year with jute as material. However, during the pilot period, the system didn't work properly and only provided low-quality products.
Even though experts were invited to inspect the plant’s processes and jute was replaced with wood, they still couldn't fix the problem and issued a negative opinion on the plant’s profitability. Meanwhile, there was huge prices dispute with the farmers.
In 2007 and 2008, farmers in Thach Hoa and Moc Hoa districts signed contracts to provide jute to the mill from 10,000 hectares of land. But because of poor prices and the gradual shutdown of the mill, many people fell into debt. Almost no one in Long An province cultivates jute anymore.
Dao Van Hung, chairman of Farmers Association in Kien Tuong commune, said, "Everyone was excited at the time because they thought the mill would help reduce poverty. It was shocking that they couldn't find good buyers after the harvest."
In 2014, the prime minister approved the decision to stop investment in the mill and asked the Ministry of Industry and Trade, the Ministry of Finance and Long An province authorities to sell the mill but they haven't found a buyer.
The mill hasn't produced any paper and has been abandoned for years. The investment of trillions of VND was wasted but there has surprisingly been no investigation into who was responsible for this gigantic failure.
