IEEM gGmbH - Institut für Umwelttechnik und Management an der Universität Witten/Herdecke

Stimulating Environmental Investment by SMEs in Vietnam (SEISME)


Projekttitel: Stimulating Environmental Investment by SMEs in Vietnam (SEISME)
Projektleiter: Prof. Dr. mult. Karl-Ulrich Rudolph
Projektpartner: Aqua Europa; VINASME; SIWRR
Förderer: EU Commission (EU Asia Invest)
Kennzeichen: VN/Asia Invest/06(129100)
Projektlaufzeit: Januar 2007 - März 2009



The main objective of the project is institutional capacity building of the Vietnam Association of Small and Medium-sized Enterprises" (VINASME) regarding the development, production, marketing and application of efficient and low cost Environmental Technology Solutions (ETS) adapted to the situation of polluting SMEs in Vietnam. Vietnam has a rapidly growing community of SMEs active in a number of polluting sectors. To mitigate their environmental impacts, these SMEs need adapted and low cost pollution control systems. Europe is the seat of numerous environmental technology developers. Some of these companies are interested to invest themselves further to address emerging environmental technology problems of SMEs in Asian countries including Vietnam. The project shall assist VINASME to develop value adding consultancy to Vietnamese SMEs in two complementary directions:

1)  the design of locally adapted environmental technology solutions addressing the problems of SMEs in selective most polluting sectors and
2)  the production of these technology solutions in Vietnam in co-operation with EU technology partners.

The project shall first review the environmental technology needs of SMEs especially in high polluting industrial sectors i.e. textile, paper mills, metal processing & galvanic as well as food processing and slaughtering. It shall identify groups of potential buyers of efficient low cost solutions for these industrial sectors and also mobilise a group of Vietnamese SME entrepreneurs that could be domestic producers of ETS systems. The project shall then under the umbrella of VINASME structure and implement training courses and consultancy services to groups of polluting SMEs members of VINASME in the fields of environmental regulation, management and technologies for SMEs. This shall help building the training capacity of VINASME in the same fields. For Vietnamese SMEs potential producers of ETS, the project shall search for EU technology partners and accompany a study tour in the EU for a small number of committed Vietnamese entrepreneurs. The project shall finally assist VINASME to develop and test a marketing strategy and visibility campaign of the value of ETS for Vietnamese SMEs.

The underlying rationale for the project is the rapid economic development of Vietnam and the multiplication of SMEs which are significantly contributing to water pollution problems in the country. Due to the rapid industrialisation process and the resulting growing environmental pressures, it is important that SMEs in Vietnam start equipping themselves with efficient low cost solutions to mitigate their environmental impacts. Due to the limited financial resources of Vietnamese SMEs, good ETS are systems that cumulate advantages such as compactness, small footprint, treatment efficiency, pre-fabricability and low production cost.
Now Europe is the seat of a multiplicity of ETS solution providers that can easily be adapted to the constraints of Vietnam including costs if local production and industrial pre-fabrication can be stimulated. Many EU providers who are facing an increasingly mature and saturated EU market are interested in exploring these emerging markets and address specific environmental problems and solutions there.


Project area and Project facts

Small and medium enterprises (SMEs) have been developing dramatically during the last decade in Vietnam. The number of SMEs in 1999 was around 35,000. In 2005 it was more than 225,000. In 2010 it is expected to be 500,000 (Report of the Minister of the Ministry for Planning & Investment in the meeting between the Prime Minister and Enterprises in February 2006). Clearly the SME sector is becoming the engine and the most dynamic part of the country economy. SMEs make significant contribution to social and economic development of the country. But they also cause great negative impacts on the environment.
Based on official statistics of pollution discharge by industry, the following sectors are particularly polluting in Vietnam: Textile, Paper Mills, Metal Processing & Galvanic and Food processing and slaughtering.

Paper mill sector
There are more than 300 paper mills in the Vietnamese paper production sector. The total capacity of the sector is about 218,968 tons of pulp and 753,720 tons of paper, bringing the output value of more than VND 5,000 billions. Many are rather small and dispersed throughout the country. The North tends to host larger mills especially in Bai Bang, Viet Tri and Hai Phong as well as in traditional craft villages such as Phong Khe (Bac Ninh province) that has about 130 enterprises. Although the Vietnamese paper sector has great development opportunities (according to the figures issued by the Vietnam Paper Corporation, the average paper consumption of Vietnam has raised from 8 kg/ person/ year in 2000 to 13 kg/ person/ year in 2004. The paper mills can respond to only 50 % of the domestic demand, the remaining 50 % has to be imported) it has also serious water pollution problems. Pollution from wastewater discharged from the production process is very serious. Water in paper production contains many pollutants such as organic and chemical substances. On average, a small and medium paper mill often discharges about 50m³ of wastewater per day. This wastewater is often discharged directly into the environment without any treatment. According to the statistics stated by the Bac Ninhs Department of Science, Technology & Environment, the amount of BOD in the waste water in Phong Khe Village is often 5 times higher than the permitted level, COD is three times higher.

The textile and garment industry is seen as one future key economic sector in Vietnam. Each year this sector brings more than USD 2 billion in export value. It is estimated that this figure will reach USD 5.6 billion in 2006 and Vietnam will stand in the list of top 10 biggest textile products exporters in the world (Source: Vietnam textile industry preparing to be in the list of world top 10 biggest textile products exporters, Vietnam Net). SMEs in the sector are found mainly in traditional villages. Thai Binh and Ha Tay are two provinces with the largest number of such villages (Van Phuc silk Village, Duong Noi textile and dyeing Village in Ha Tay; Nam Cao and Phuong La textile Village in Thai Binh). Water pollution in the sector particularly is dramatic caused mostly by the printing, dyeing and products finishing steps. As SMEs are not able to invest in efficient water treatment system and lack awareness on environmental matters, wastewater is often discharged directly into receiving waters without any treatment contaminating water resources with large amounts of Fe, Zn, Cu, Pb. Results of the analysis of waste water in Van Phuc textile and dyeing village demonstrate that the content of BOD, COD, SS in the water is 67-159 mg/l, 139-423 mg/l; 167-350 mg/l respectively and the content of heavy metals in the water such as Fe, Pb, Cr6+ is 7.68 mg/l, Pb 2.5 mg/l and 0.08 mg/l respectively (Source: Centre for Environmental Treatment Technologies-Chemical Commanding Ministry, 2003).

Metal processing sector
Metal processing and recycling is a traditional production sector of Vietnam. There are 81 villages processing metals mostly located in the North of the country Dai Bai copper casting Village (Bac Ninh province), Da Hoi metal plating Village (Bac Ninh province), Man Xa aluminum recycling Village (Bac Ninh province), Dong Mai lead recycling Village (Hung Yen province) are ranked as big metal processing villages in Vietnam. Water pollution issues from metal processing SMEs are most serious due to products washing, plating and cooling steps. In Da Hoi Village, the water in ponds, lakes, canals almost exclusively contain iron scum, oils. In Dong Mai a lead recycling Village, most of the water sources are contaminated with a large amount of lead. The amount of lead in the wastewater measured is about 0.77 mg/l which is 15 times higher than the permitted level. Especially, the amount of lead found in ponds where lead is washed is 3.278 mg/l which is 65 times higher than the permitted ones.

Food processing and livestock slaughtering sector
Food processing and livestock slaughtering sector plays a very important role in the life of Vietnamese people. The food processing enterprises and livestock slaughter-houses are distributed in every province and city of Vietnam. In many cases these SMEs form industrial villages such as the Thon Doai noodle processing Village (Bac Ninh province), the Duong Lien cassava powder processing Village (Ha Tay province), the Phuc Lam livestock slaughtering Village (Bac Giang province) or the Van Thai livestock slaughtering Village (Hai Duong province). Each village may have up to 100 enterprises/slaughter-houses. Due to the increase in living standard of people, there is a large demand for food and foodstuff in Vietnam. As a result, the food processing and livestock slaughtering sector is developing dramatically. It also causes important pollution problems. Each day a livestock slaughter-house discharges around 36 m³ of wastewater most often without any treatment. According to a report on Vietnam traditional villages and its environmental challenges made by Dr. Dang Kim Chi Institute of Science, Technology and Environment at the Seminar on Climate change, August 2005, the BOD5 and COD content in the waste water of these traditional villages are very high. For instance the BOD5 content in waste water is up to 2005 mg/l at the Thon Doai Noodle processing Village and the Nitrogen content in Duong Lien Cassava powder processing (Ha Tay province) is 145.6mg/l. These levels are 40 times higher than the permitted standards.