Multistakeholder Forestry Programme Phase 3 Technical Reports

Transcription

1 Multistakeholder Forestry Programme Phase 3 Technical Reports Case Study: Market for fast growing trees in North Sumatra

2 Case Study: Market for fast growing trees in North Sumatra MFP3 June 2016

3 Table of Contents List of Tables and Figures 1 Introduction 1 2 Fast-Growing Trees Error! Bookmark not defined. 2.1 Types of Fast-Growing Trees Error! Bookmark not defined. 2.2 Cultivation of Fast-Growing Trees 2 3 Market for Fast-Growing Trees Error! Bookmark not defined. 3.1 Products with Raw Materials of Fast-Growing Trees Timber Value Chain of Fast-Growing Trees Barecore and Plywood Industries in North Sumatra 6 4 Conclusion and Recommendation Conclusion Recommendation 10 iii ii

4 List of Tables and Figures Figure 1. Sengon Trees... 2 Figure 2. Jabon Trees... 2 Figure 3. Barecore... 4 Figure 4. Blockboard... 4 Figure 5. Plywood... 5 Figure 6. Sawn Timber for Barecore... 7 Figure 7. Barecore Processing... 7 Figure 8. Log Timber for Plywood... 7 Figure 9. Plywood Processing... 7 Table 1. List of Barecore and Plywood Industries in North Sumatra.. 6 Diagram 1. Barecore and Plywood Value Chain...5 Diagram 2. Plywood Value Chain Diagram 3. Conversion from Trees into 1 m3 of Barecore...7 Diagram 4. Conversion from Trees into 1 m3 of Plywood iii

5 1 Introduction Fast-growing tree, often also referred to as light wood, is a type of plant that can be harvested in the age of less than 10 years. The most popular species of this plant is Sengon (Paraserianthes falcataria) because when the trees reach the age of 5 6 years its diameter has been more than 25 cm, so it can be harvested. Other popular type of the plant is Jabon (Anthocephalus cadamba) which takes a little longer, i.e 8 10 years, to reach a diameter of cm. In Indonesia, especially in Java, the timber industry which uses wood of fast-growing trees has grown very rapidly in last 5 years. This sector includes the industries that produce barecore, blockboard and plywood. The raw materials used for the products are Sengon (Paraserianthes falcataria or Albizia chinensis) and Jabon (Anthocephalus cadamba). Indonesia dominates the world market of the three types of the products with a market share of nearly 90%. In 2015, the export of fast-growing-tree-based barecore, blockboard and plywood grew up to an average of 2,500 containers each month. Pulp and paper industries also require wood of fast-growing trees as raw materials, especially acacia (Acacia mangium). But people are not interested in planting this tree because of its selling price is low and the difficulty to do inter-cropping with companion crops that can be harvested in the short term, such as ginger or coffee. Most of fast-growing-tree-based industries are located in Java as the raw materials are abundant in Java s social forestry. The industry has not been able to grow beyond Java, mostly because the difficulty to find the raw materials, such as sengon and jabon, in massive quantities. Generally, plywood industries outside Java are no longer in operation as they run out of natural hardwood as raw materials. However, in North Sumatra, plywood and barecore industries that use fast-growing trees as raw materials are starting to grow, driven by new community plantation of sengon and jabon trees. The existence of timber processing industry using fast-growing trees will encourage people to use their land to plant the trees. 1

6 2 Fast-Growing Trees 2.1 Types of Fast-Growing Trees In the last decades, Indonesia s timber industry -especially for panel productions either of barecore, blockboard, or plywood- strated to use timber raw material derived from fast-growing trees. This was triggered by the difficulty to obtain raw materials from natural wood, which also resulted from its increased and expensive price. The fast-growing trees are light woods with harvested age of 10 years or less. There are a lot of trees categorized into the fast-growing tree species, i.e. Sengon (Paraserianthes falcataria), Jabon (Anthocephalus cadamba), Samama (A. macrophylus), Duabanga (Duabangamoluccana), Binuang (Octomeles sumatrana), Ampupu (Eucalyptus urophylla), Pelita (Eucalyptus pellita), Nyawai (Ficus variegata), Pangsor (Ficus callosa), Mangium (Acacia mangium), Aprika (Maesopsis emenii), Gempol (Nauclea orientali). Figure 1. Sengon Trees Figure 2. Jabon Trees From the 12 types of the trees mentioned above, Sengon and Jabon are the most popular for being planted. In Java, both species can be found in nearly every farmer family. With the log selling prices of 600, ,000 per m3 (depending on the diameter), the trees become a saving for the farmers, felled when they need substantial funds. Both species can grow well in altitude of m above sea level with annual growth of diameter between 5 10 cm. Sengon is generally harvested at the age of 5 6 years of which the diameter has reached cm, while Jabon takes 7 8 years to reach the same diameter. 2.2 Cultivation of Fast-Growing Trees Cultivation of fast-growing tree attracts many people because of its relatively short-time harvesting (5 8 years) and the high selling price. In addition, the plant does not require a complicated and intensive treatment. 2

7 In Java, majority of the farmers grow this tree with intercropping; that is the fast-growing trees cultivation is done along with other short-term crops. This is done because of the small farmer s land ownership in Java (average of 0.3 hectare per farmer). It also encourages them to have other shorter-term source of income. On the contrary the farmers outside Java do the cultivation in intensive monoculture. The type of the trees, especially Sengon and Jabon is a tropical plant with optimal growing area of m above sea level. Cultivation can be carried out either in intensive monoculture with a spacing of 3 x 3 m or intercropped with other short-term crops such as ginger, turmeric, chili or coffee. Intercropping will only need optimal spacing of 4 x 5 m, while intensive monoculture will need at least 1 ha of cultivation area for about 1100 sengon or jabon trees producing wood volume of about m3, depending on the level of soil fertility. The timber selling price of fast-growing trees is between 700,000 1,100,000 rupiahs per m3 of log, depending on the diameter. For examples, the price of log with diameter less than 15 cm is 700,000 rupiahs per m3, while for the one with diameter more than 25 cm will cost 1,100,000 rupiahs per m3. If in the form of sawn timber, the industries accept the price range from 1.2 million until 1.3 million per m3. Therefore, for 1 ha of intensive sengon or jabon cultivation (in a period of 5 7 years) will generate gross revenue of about million rupiahs with cost of cultivation as much as 50 million rupiahs.. 3

8 3 Market for Fast-Growing Trees As the use of natural wood is increasingly restricted and tightly regulated, industries need to turn to fast-growing trees timber as substitution for the raw materials. 3.1 Products with raw material of fast-growing trees Light wood or wood from fast-growing trees is most widely used as raw material for blockboard and plywood production. Among the lower classes, the types of this timber are also used for constructing house because of its cheap price. The use for construction and furniture products is unusual because it is the type of soft timber so it does not have enough strength as construction and furniture materials. i. Barecore is a sheet of board composed of pieces of timber Figure 3. Barecore ii. Blockboard, or three-layer plywood, is a sheet of barecore coated with veneer on each side. Blockboard is used as wall panel of a house. Figure 4. Blockboard 4

9 iii. Plywood is a sheet of wood composed from several veneers attached. If it consists of 3 sheets of veneers, it is called triplex, while if more than 3 sheets of veneer it is called multiplex Figure 5. Plywood. 3.2 Timber Value Chain of Fast-Growing Trees The raw materials for industry can be either logs or sawn timber. But for plywood industry, the form must be logs. The following diagram is a map of value chain of barecore and blockboard products: Local Traders Log timber Forest Farmers Saw Mills Sawn timber Barecore & Blockboard Farmers Association Log timber Diagram 1. Value Chain of Barecore and Blockboard 5

10 For plywood industry, the map of value is same as that of Blockboard, but only logs will be accepted. Forest Farmers Local Traders Farmers Association Log timber Log timber Plywood Diagram 2. Value Chain of Plywood 3.3 Barecore and Plywood Industries in North Sumatra Before the 2000s, North Sumatra is one of the regions with the quite large number of wood processing industry in Indonesia. Especially for plywood industry, there are more than 20 medium and large scale industries in operation with the raw material needs reaches tens of thousands m3 per year. At that time, 100% of raw materials derived from natural forest in the region of North Sumatra. After the 2000s, all of the industries closed one by one due to the difficulty in obtaining raw materials from natural wood. Since the last 5 years, the plywood and barecore industries have reappeared with 100% of raw materials derived from fast-growing trees i.e. sengon and Jabon. The industries also produce barecore and blockboard for domestic and export market, especially to China. The scale is still medium with production capacity variation ranging from 6,000 m3 until 15,000 m3 per year. The following is the list of plywood and barecore industries that currently in operation in North Sumatra. No. Company Address Product Production Capacity (m3/year) 1. Aceh Prima Plywood Jl. Kol. Sugiyono, Medan Plywood 10, Pita Rimba Tanjung Merawa-Batang Barecore 12, Gunung Raya Utama Jl. Diponegoro, Medan Barecore, plywood 15, Mujur Timber Jl. Kol. Sugiyono, Medan Plywood 10, Raja Garuda Mas Pinang City, Labuhan Batu Plywood 6,000 6

11 No. Company Address Product Production Capacity (m3/year) 6. Tjipta Rimba Djaya Jl. Yos Sudarso Deli Serdang Barecore, plywood 15, Asia Forestama Raya Jl. Jend Sudirman, Medan Plywood 8, Bukit Intan Abadi Medan Industrial Estate Barecore 10, Herwindo Jabon Stabat, Deli Serdang Plywood 6,000 Total production capacity (m3/year) Table 1. List of plywood and barecore industries in North Sumatra 92,000 m3 To produce 1 m3 of barecore and plywood products, an industry requires raw materials between m3 of logs. For a total production capacity of 90,000 m3 per year, the requirement of logs is as much as 234, ,000 m3 per year. The total volume of logs requires 4,680 5,049 hectares of fast-growing tree plants each year. With the harvest period of 5 years, then the plywood and barecore industries in North Sumatra require +/- 5 x 5000 hectares = 25,000 hectares of fast-growing tree plants to meet the needs for raw material. From the total installed capacity of 92,000 m3 per year, until now only % has been used. This is due to the unstable supply of raw materials so that the industries do not operate continuously. The diagram below illustrates the conversion from the trees into barecore and plywood products which becomes a basis of calculation of raw material needs. Trees Log timber Sawn timber Processing Bare core Bare core 0.02 H 3.4 m m3 1 m3 Diagram 3. Conversion from trees into 1 m3 of barecore 7

12 Figure 6. Sawn timber for barecore Figure 7. Barecore processing For plywood product, the conversion from the trees into the product is as follow: Trees Log timber Processing plywood Plywood ha 2.6 m3 1 m3 Diagram 4. Conversion from trees into 1 m3 of plywood Figure 8. Log timber for plywood Figure 9. Plywood processing As much as 60% of production is exported to China and Taiwan, while the rest is for domestic needs in the region of northern Sumatra ranging from Riau, North Sumatra and Aceh. Currently, the average of monthly export volume of plywood and barecore reaches containers. 8

13 From the existing data, it is seen the current needs for raw material from the fast-growing trees. With the economic growth projected increase each year, the needs for the raw material also increase. This will encourage the people in North Sumatra to cultivate fast-growing trees more intensively. 9

14 4 Conclusion and Recommendation 4.1 Conclusion The market for timber of fast-growing trees in North Sumatra is large enough ranging from 234,000 m3 until 297,000 m3 per year. To ensure the availability of raw material, it is critical to maintain more than 25,000 hectares of fast-growing trees. To make sure the stock is sustained, the total area for the source of plants should be at least 2 times or equivalent to 50,000 hectares of fast-growing trees. The needs of plywood and barecore industries, which is large enough and continuous to grow each year, is an opportunity for the people to cultivate fast-growing trees more intensively in order the industries can develop their business in accordance with the market growth. The farmer groups can be developed to be able to supply industry with semi-finished raw material to increase the added value through a mutually beneficial partnership between farmer groups and industry. 4.2 Recommendation 1. Information about market opportunity of timber of fast-growing trees needs to be disseminated to the public in order to be fully utilized. 2. A partnership between industry and forest farmer groups needs to be built to provide a more secured raw material supply from society to industry and give opportunities to the group of forest farmers to increase added value. 10

15 For more info: Manggala Wanabhakti Building, Block 7, 6th Floor Jl. Jend. Gatot Subroto, Jakarta 10270, Indonesia P Dipo Tower Unit B, 9th Floor Jl. Jend. Gatot Subroto Kav , Jakarta 10260, Indonesia P F