Deal #8058 Version #93232

First plantation was already established in 1990. In 2011 Burapha Agro-Forestry was acquired by Silvicapital through their subsidiaries SilviLao AB and Bafco AB. After the acquisition Burapha’s objective is to build a timber plantation asset in Laos large enough to be the core wood supplier for a major industrial operation. The next expansion phase is to establish an additional 11,000 ha and reach 15,000 ha of Eucalyptus plantations. They are envisioning to build a midsize pulp mill. [Source: company website] On the agroforestry scheme: Intercropping is allowed for the first 1-2 years. Cattle grazing in years 3-7. After seven years, the trees are harvested and a new cycle starts. Intercropping: In the earlier stages of Burapha plantations with intercropping scheme, the company did not focus on degraded land but also cut down healthy vegetation. Cutting and then burning made the soil fertile for the crop planted between the eucalyptus rows. The first year of the plantation was particulary attractive for smallholders because they got direct payments for any labor they provide for the company AND they made a profit from the rice (or other intercrop). Since the company switched to degraded land only, however, the soil is not fertile enough for the (inter)crop. People lost interest in intercropping in consequence. Leakage: people who still do slash and burn ag., moved on to healthier forests, when the eucalyptus plantation got established. Grazing: Grazing cows and other animals is financially not attractive for most people. The daily wage is 80- 250 K LAK per day based on the type of work. On the lowest rate on 20 working days, this makes 1.6 mio. LAK in a month. A cow raised over two years, can be sold for merely 2-3 mio LAK. There is also strong wage competition by Chinese projects (incl. infrastructure projects).