Small-medium Scale Private Forestry New Role in Forest Industry Value Chains In Africa

Transcription

1 Small-medium Scale Private Forestry New Role in Forest Industry Value Chains In Africa Tanzania Plantation Forestry Conference Petri Lehtonen and Asko Siintola, Indufor 15 th November, 2016, Dar es Salaam, Tanzania

2 Rationale The future growth of forest industry value chains will be more and more based on sourcing wood from private small and medium size tree growers instead of large-scale industrial estates. Can smallholdings reach sufficient scale to be integrated in industrial value chains? Can industry clusters relying on small-scale tree growing become competitive? 2 COPYRIGHT 2016 INDUFOR

3 Contents 1. Evidencing Cases Europe Southeast Asia 2. Vision for Development in Africa Ethiopia Tanzania 3. Take Home Messages 3 COPYRIGHT 2016 INDUFOR

4 Europe In Europe, industrial infrastructure enables scalable and diversifiable wood and fibre based industries and energy generation that is largely based on private farm forestry. In Finland and Sweden, the average size of private forests is 35 to 50 ha In Germany, France and Austria, the average size is less than 10 ha. 4 COPYRIGHT 2016 INDUFOR

5 Southeast Asia - Vietnam One of the largest exporters of wood chips with 8 million tons per year. A hub of wooden garden furniture production. Majority of the plantations in Vietnam are smallholder plantations Industrial growth is largely based on smallholder tree growing. m3 Industrial Roundwood Supply 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000, COPYRIGHT 2016 INDUFOR Plantations Natural forests

6 Contents 1. Evidencing Cases Europe Southeast Asia 2. Vision for Development in Africa Ethiopia Tanzania 3. Take Home Messages 6 COPYRIGHT 2016 INDUFOR

7 Ethiopia 0.2 million hectares fast growing government plantations and 0.8 million hectares of woodlots. Obsolete industries challenged by increasing imports. 9% growth rate of GDP Emerging roads & rails Improving power generation capacity Consumption of wood products in round wood equivalent million m³ rwe Ancillary products Furniture Pulp & paper MDF Poles Particleboard Plywood Sawnwood Current industrial roundwood use, including illegal wood 7 COPYRIGHT 2016 INDUFOR

8 Vision for Development in Ethiopia? 16 million m 3 45% Profitability (IRR) of investment options 14 40% 12 Demand 35% Year Proposed plantations Current plantations Current level of supply 30% 25% 20% 15% 10% 5% 0% Roundwood Sawnwood Plywood Particleboard MDF All Investments Investment, million USD Size / Capacity Roundwood production / requirement New plantations ha m 3 /a Sawmills (31 units) m 3 /a m 3 /a Plywood (5 units) m 3 /a m 3 /a Particleboard (3 units) m 3 /a m 3 /a MDF (3 units) m 3 /a m 3 /a 8 COPYRIGHT 2016 INDUFOR

9 Tanzania 6,000,000 5,000,000 m 3 Wood flow by ownership in Tanzania Past Future 4,000,000 3,000,000 2,000,000 1,000,000 0 Government Private companies Woodlots 9 COPYRIGHT 2016 INDUFOR

10 Successes in Organising Smallholders Outgrower schemes Tree Growers Associations Company with plantation and industry assets Small-scale tree growers Small-scale tree growers Control of supply chain: - Company inputs in technology and management - Tree growers commitment in wood sourcing Scale and bargaining power: - Cooperation in technology and management - Marketing & negotiation with industries 10 COPYRIGHT 2016 INDUFOR

11 Challenges in Scaling and Diversifying Value Chains Current situation in Tanzania Large-scale plantations relatively new assets with initial downstream processing Company Plantations Large companies Lumber, poles Veneer, plywood, furniture Paper, MDF (none currently) Premium for quality lumber Government plantations Private tree growers Small-scale plantations disintegrated value chain SME s Lumber: poor quality None None Traders play important role Bottlenecks: Companies Suboptimal mix of assortments Imports, scale of production Customers not sophisticated SME s Lack of capital to buy logs High residues, poor technology End markets far, traders collect and transport Assets/Processing/End Markets are not integrated 11 COPYRIGHT 2016 INDUFOR

12 Challenges in Scaling and Diversifying Value Chains Vision for future in Tanzania Company Plantations Government plantations Large companies SME s Lumber, poles Veneer, plywood, furniture Paper, MDF Furniture, joinery Premium for quality wood products Private tree growers SME s Private tree growers integrated; industries able to scale up and diversify - Quality, different wood assortments - Efficient use of side products (no waste) - Wood paying capacity - Less intermediaries price setter in the markets 12 COPYRIGHT 2016 INDUFOR

13 Contents 1. Evidencing Cases Europe Southeast Asia 2. Vision for Development in Africa Ethiopia Tanzania 3. Take Home Messages 13 COPYRIGHT 2016 INDUFOR

14 Take Home Messages African forest industries have to rely on small and medium size tree growers in their future growth There is evidence of successful forest industry clusters that are based on private farm forestry Small and medium size tree growers can reach scale benefits with organization and partnerships Scaling and diversification of forest industries is the most critical element in the value chain 14 COPYRIGHT 2016 INDUFOR

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