Regenerative Construction Materials
Regenerative Construction Materials
Business Model Description
Establishing sustainable forestry practices to harvest non-timber forest products such as bamboo. Business model may include processing these materials locally, to manufacture regenerative construction materials for both local and international markets.
An illustrative example of enterprises active in this space is: Burapha Agro Forestry is a Lao-Swedish company that focuses on rural development and sustainable agroforestry. According to online sources, the company was founded in 1990, and has addressed forest landscape restoration, managing approximately 6,000 hectares of private land in cooperation with local farmers and villages. Specializing in eucalyptus plantations, Burapha's operations use a community based approach.
Expected Impact
The IOA advances sustainable development in Lao PDR via eco-friendly forestry and regenerative construction, benefiting communities and nature.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Lao PDR: Luang Prabang Province
- Lao PDR: Savannakhet Province
- Lao PDR: Champasak Province
- Lao PDR: Bolikhamxay Province
- Lao PDR: Vientiane Capital
Sector Classification
Renewable Resources and Alternative Energy
Development need
Lao PDR, with 18.7 million hectares of forested land, loses 1.4% of such land annually due to deforestation. The untapped potential of regenerative materials, particularly 500,000 hectares of bamboo, can address deforestation, providing sustainable solutions for the construction sector and enhancing environmental conservation efforts (1) (2) (3).
Policy priority
Lao PDR's Forestry Strategy 2020 requires a strong alignment with the need for using sustainable materials. The strategy aims to increase forest cover to 70% of the total land area and encourages the sustainable use of non-timber forest products, including bamboo and other regenerative materials (4).
Gender inequalities and marginalization issues
Women in rural areas, despite being significant contributors to forest resource management, face economic disparities earning only 73% of male wages. Their inclusion in the value chain of regenerative materials can provide economic upliftment opportunities and foster gender equality. (5)
Investment opportunities
The global regenerative materials market, with a projected CAGR of 10.3% from 2021-2026, presents significant investment opportunities. Lao PDR can leverage this trend to develop its regenerative materials sector, focusing on abundant bamboo resources, potentially driving economic growth and sustainability. (6)
Key bottlenecks
Unsustainable extraction practices threaten biodiversity, with 80% of Lao's population reliant on natural resources. Also, rural producers face challenges like limited technical knowledge of regenerative materials production and inadequate market access, hampering the growth of this industry. (7)
Forestry and Paper
Development need
Lao PDR's forestry sector, the source of livelihood for 80% of its population, faces challenges of deforestation and over-extraction. The development needs lies in promoting sustainable practices and utilizing non-timber forest resources, such as bamboo, for regenerative construction materials . (8),(9)
Policy priority
The government's Forestry Strategy 2020 emphasizes sustainable forest management and promotes the use of non-timber forest products, directly aligning with the development of a regenerative materials subsector. (10)
Gender inequalities and marginalization issues
Women in rural areas, integral to forest resource management, face significant wage gaps and lack of representation. Promoting gender inclusivity in the value chain of regenerative materials can contribute to reducing these inequalities.(11)
Investment opportunities introduction
Global demand for sustainable construction materials is growing, and Lao PDR's untapped bamboo resources present an opportunity for investment in regenerative materials production, in line with the global market's projected growth. (12)
Key bottlenecks introduction
In Lao PDR, unsustainable extraction practices pose significant challenges, alongside the limited technical knowledge of regenerative material production and limited access to markets for rural producers. (13)
Pulp and Paper Products
Pipeline Opportunity
Regenerative Construction Materials
Establishing sustainable forestry practices to harvest non-timber forest products such as bamboo. Business model may include processing these materials locally, to manufacture regenerative construction materials for both local and international markets.
An illustrative example of enterprises active in this space is: Burapha Agro Forestry is a Lao-Swedish company that focuses on rural development and sustainable agroforestry. According to online sources, the company was founded in 1990, and has addressed forest landscape restoration, managing approximately 6,000 hectares of private land in cooperation with local farmers and villages. Specializing in eucalyptus plantations, Burapha's operations use a community based approach.
Business Case
Market Size and Environment
< USD 50 million
15% - 20%
261,800 hectares of forests lost to deforestation every year in Lao PDR.
The value of the production of wood and rattan furniture was $ 25.7 million in 2022. The market observed a 20% growth in production from 2021-2022.
Indicative Return
> 25%
Companies in similar sectors, such as bamboo-based construction materials, have seen gross profit margins of around 35% . (4)
Investment Timeframe
Medium Term (5–10 years)
Bamboo Technologies, for instance, saw positive returns six years after its establishment, following its successful market penetration in the Asia-Pacific region. Similarly, BioMason, a company that bio-fabricates bricks, began seeing returns approximately five years after its launch. (5)(6)
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Business Model Unproven
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
Sustainable Development Need
Climate Change Mitigation: The construction sector is responsible for nearly 40% of global CO2 emissions. Regenerative construction materials can significantly reduce these emissions, addressing a key aspect of climate change mitigation.For Lao PDR, investments in this space also lead to contributions to its NDC commitments whereby it commits to reduce emissions by 60% (unconditional) by 2030, compared to the baseline scenario, with 2030 conditional targets set for land use, energy, agriculture, and waste sectors.(15) (20)
Resource Efficiency: Traditional construction materials, like cement and steel, are resource-intensive. Bio-based materials are typically more resource-efficient and promote circular economy. (15)
Gender & Marginalisation
Job Opportunities: 79% of households in rural areas are farm households and have significant dependence on sustainable land use for their livelihoods and incomes.(18)
Expected Development Outcome
CO2 Emission Reduction: The use of regenerative construction materials can potentially reduce CO2 emissions in the construction sector by up to 40%, contributing significantly to global climate change mitigation efforts and to Lao PDR's NDC commitments. (15)
Resource Efficiency Improvement: The switch to bio-based materials can lead to a 30% improvement in resource efficiency in the construction sector, promoting the circular economy and reducing environmental impact. (15)
Gender & Marginalisation
Job Creation: The business models under this IOA have the potential to create numerous jobs in the production and use of regenerative construction materials, contributing to economic equality, including for marginalized groups.
Primary SDGs addressed
9.4.1 CO2 emission per unit of value added
As of 2020, Laos' carbon dioxide emissions were approximately 2.6 metric tons per capita, which is relatively low compared to the global average but has been gradually increasing over the years [16]
No current targets
11.3.2 Proportion of cities with a direct participation structure of civil society in urban planning and management that operate regularly and democratically
As per the United Nations' data, Laos has limited urban planning structures with participation in civil society. However, there are increasing efforts towards involving civil society in urban development decisions [20]
Laos aims to have 100% of its cities with direct participation structures of civil society in urban planning and management by 2030 [20]
13.2.1 Number of countries with nationally determined contributions, long-term strategies, national adaptation plans, strategies as reported in adaptation communications and national communications
Laos is one of the 189 countries that have communicated their first nationally determined contributions (NDCs) and is currently working on its updated version [19]
Unconditional emission reduction target of 60% by 2030 [19]
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Economic risk: If the demand for regenerative construction materials does not meet expectations, this could negatively impact local economies reliant on this industry.
Environmental risk: Despite sustainable forestry practices, there could still be potential harm to local ecosystems due to increased human activity in these areas.
Social risk: There could be resistance from traditional construction sectors, leading to social tensions or job displacement.
Market risk: The prices of regenerative construction materials may not be competitive with traditional materials, leading to lower adoption than expected.
Gender inequality and/or marginalization risk: If government policy and corporate action on integrating gender considerations is not enforced, IOA could inadvertently reinforce gender inequalities by primarily benefiting male workers.
Impact Risks
Environmental impact risk: The expected positive impact on the environment may not occur if sustainable forestry practices are not strictly adhered to.
Social impact risk: The intended socio-economic benefits may not reach all community members, particularly marginalized groups if the model is not inclusive.
Market impact risk: The shift towards regenerative materials may not influence the wider construction industry as expected, limiting the intended broader impact.
Policy impact risk: Lack of supportive government policies and regulations could limit the expected impact on sustainability and local economic development.
Gender inequality and/or marginalization risk: The expected benefits for women and marginalized communities may not materialize if existing barriers to inclusion are not addressed.
Impact Classification
What
The IOA aims to improve sustainable forest management and the use of regenerative construction materials, contributing to both local economic growth and environmental sustainability.
Who
This impacts local communities involved in the harvesting and processing of non-timber forest products, and the wider society benefiting from sustainable construction practices.
Risk
If government policies are not enforced, protected forests might come under risk of exploitation.
Contribution
The IOA contributes to a shift towards more sustainable construction practices, fostering local economic development and environmental conservation.
How Much
281,600 hectares of land lost to deforestation every year. The IOA can promote sustainable agroforesrty practices and reduce the amount of land lost to deforestation.
Impact Thesis
The IOA advances sustainable development in Lao PDR via eco-friendly forestry and regenerative construction, benefiting communities and nature.
Enabling Environment
Policy Environment
"Lao PDR Forestry Strategy to the Year 2020": This document guides the country's forestry sector, emphasizing sustainable use of forest resources, including non-timber products like bamboo.
"Lao PDR's 9th National Socio-Economic Development Plan (NSEDP 2021-2025)": This document supports green growth, sustainable infrastructure, and job creation, which aligns with the IOA's objectives.
Financial Environment
The "Lao PDR Investment Promotion Law (2016)" provides tax exemptions and reductions for investments in specific sectors, including sustainable forestry and green construction
The "Lao PDR Green Growth Strategy (2019)" offers concessional loans for projects that align with green growth principles, which could include the IOA's activities
The government, through the Ministry of Agriculture and Forestry, provides land-use rights for sustainable forestry activities under the "Lao PDR Forestry Law (2007)"
Regulatory Environment
"Lao PDR Forestry Law (2007)" regulates forest resource use and promotes sustainable forestry practices.
"Lao PDR Environmental Protection Law (2012)" requires environmental impact assessments for projects, including those in the forestry sector.
"Lao PDR Investment Promotion Law (2016)" encourages sustainable investments, potentially benefiting the IOA.
Marketplace Participants
Private Sector
Mekong Timber Plantations, a company focusing on sustainable plantation management in Lao PDR, Furniture Wai Lao, focuses on building furniture using regenerative materials.
Government
The Ministry of Agriculture and Forestry oversees forestry management and issues regulations for sustainable use of forest resources
Multilaterals
The World Bank, through the Forest Investment Program, supports sustainable forest management and livelihood improvement in Lao PDR
Non-Profit
The World Wide Fund for Nature (WWF) works on sustainable forestry and biodiversity conservation in Lao PDR
Public-Private Partnership
The Sustainable Forestry for Rural Development Project (SUFORD), a joint initiative by the Lao PDR government and the World Bank, supports sustainable forest management
Target Locations
Lao PDR: Luang Prabang Province
Lao PDR: Savannakhet Province
Lao PDR: Champasak Province
Lao PDR: Bolikhamxay Province
Lao PDR: Vientiane Capital
References
- ([1] Food and Agriculture Organization of the United Nations. (2020). "Global Forest Resources Assessment 2020 – Country Report Lao People's Democratic Republic." [2] Global Forest Watch. (2021). "Country Profiles: Lao PDR." [3] International Network for Bamboo and Rattan. (2019). "Bamboo and Rattan Development Programme: Lao PDR." [4] Ministry of Agriculture and Forestry, Lao PDR. (2005). "Forestry Strategy 2020." [5] World Bank. (2019). "Lao PDR Economic Monitor: Structural transformation for poverty reduction." [6] MarketsandMarkets. (2021). "Regenerative Materials Market by Form, Application, Region - Global Forecast to 2026." [7] United Nations Development Programme. (2017). "Strengthening sustainable management and promoting the use of biodiversity."
- (8) World Bank. “Lao PDR Forest Note: Toward Sustainable Forest Landscapes for Green Growth, Jobs, and Resilience.” World Bank Group, 2019, openknowledge.worldbank.org/bitstream/handle/10986/34094/Lao-PDR-Forest-Note-Toward-Sustainable-Forest-Landscapes-for-Green-Growth-Jobs-and-Resilience.pdf?sequence=4.
- (9) World Bank. “Greener Growth through Good Wood: Sustaining Forest Landscapes and Local Livelihoods in Lao PDR.” World Bank Group, 2018, www.worldbank.org/en/country/lao/publication/greener-growth-through-good-wood-sustaining-forest-landscapes-and-local-livelihoods-in-lao-pdr.
- (10)“Forestry Strategy 2020.” Ministry of Agriculture and Forestry. Government of Laos, 2020. 2023. : Kozak, Robert A., and John Innes. “Modelling Non-timber Forest Products for Forest Management Planning in British Columbia.” Small-Scale Forestry 19.4 (2020): 427-443. Web. : “Non-Timber Forest Products and the Bioeconomy.” Forests 12.6 (2021): n. pag. Web.
- (11) Gender in Value Chains - Practical Toolkit to Integrate a Gender … (https://www.fao.org/sustainable-food-value-chains/training-and-learning-center/details-materials/en/c/277079/)
- (12) “Bamboo: Green Construction Material - Asia-Pacific Network for Global …”. Asia-Pacific Network for Global Change Research. 2020. https://www.apn-gcr.org/wp-content/uploads/2020/09/1654f846a58279adea4aeb44a881321b.pdf.
- (13)“Decarbonization in Lao PDR: the options and challenges”. ClimateWorks Australia. 2021. https://www.climateworkscentre.org/wp-content/uploads/2022/02/Lao-PDR-Report-Phase-1_Sept-21.pdf.
- (14) https://biomason.com/about
- (15) https://www.unep.org/resources/publication/2022-global-status-report-buildings-and-construction
- (16) https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=LA
- (17) The 3rd Lao census for Agriculture, 2019/2020.
- (18) https://climatepromise.undp.org/what-we-do/where-we-work/lao-pdr
- (19) https://kostat-sdg-kor.github.io/sdg-indicators/en/11-3-2/