Itochu Corporation, a Japanese multi-sector business, is looking to plant a timber forest and build a wood pellet factory in Vietnam’s central province of Binh Dinh, aiming to export one million units a year.
Kenji Tanaka, CEO for Asia and Oceania at Itochu, delivered the proposal to Binh Dinh Chairman Pham Anh Tuan at a meeting on Tuesday. He said the project, in cooperation with Binh Dinh-based Phu Tai Bio-Energy Corporation, aims to serve Japan’s growing demand for wood pellets, which is estimated to double in three years.
Itochu currently imports 500,000 tons of wood pellets from Vietnam, including 300,000 tons from Binh Dinh. Itochu also purchases and exports tuna and fertilizers from Quy Nhon town in the south-central coastal province.
In reply, the provincial leader welcomed Itochu’s proposal, saying that Binh Dinh is one of four key hubs in Vietnam for wooden products. However, the sector has disadvantages in terms of capital, insurance, and long-term sustainability due to local people managing a large area of forest. He added that the province would support the firm's investment.
In Vietnam, Itochu is well known as the biggest foreign shareholder in the Vietnam National Textile and Garment Group (Vinatex) with a 13% stake at the end of 2022.
Binh Dinh harvested 142,653 cubic meters of planted forest in May, down 0.7% year-on-year, according to provincial data. The January-May figure was 363,862 cubic meters, up 3.2%.
Registered foreign direct investment (FDI) capital in Vietnam declined 7.3% year-on-year to nearly $10.86 billion in the first five months of the year, while disbursed capital dropped 0.8% to $7.56 billion, the Foreign Investment Agency (FIA) said. Binh Dinh’s registered FDI capital reached $17.89 million in the period.