P. Mwaura and F: M. Kamau
Peter Mwaura is Bureau Chief, Panafrican News Agency.
F. M. Kamau is Chief Technical Adviser of FAO/UNDP project RAF/87/117, Intraregional cooperation in development of plantation-based forest industries for the PTA member states.
This article examines the state of forest industry in the Preferential Trade Area for Eastern and Southern African States (PTA) and highlights the potential of intraregional trade in promoting future development.
In December 1981, 15 African countries signed a treaty establishing the Preferential Trade Area for Eastern and Southern African States (PTA). The overall objective of the PTA is to promote development and integration of the economies of the member states in all sectors, including forest industry. Today, 18 of the subregion's 21 countries (excluding South Africa) are members of the PTA and the remaining three, Namibia, the Seychelles and Botswana, are considering membership (see Figure for map showing the PTA member states). In the course of this article, the designation PTA has been applied to the total 21 countries.
The resource base
An assessment of tropical forest resources, carried out by FAO and the United Nations Environment Programme (UNEP), estimated the total area of closed forest in tropical Africa to be a little more than 216 million ha in 1980. Productive forest was estimated at 163 million ha and 53 million ha were considered protective as they were located in swampy areas, mountainous regions, national parks and other conservation areas. Open forest, commonly known as woodland savannah, was estimated at 486 million ha, of which 169 million ha were considered productive in terms of timber potential.
The PTA countries have some 220 million ha under forest and have a tree cover rate of about 25 percent of the total land area. Therefore, when compared with other regions of Africa, the subregion is relatively poorly endowed with forests. While the region represents 27 percent of Africa's total land area, it has only 7 percent of the forest area, mainly because of its high altitude and relative dryness. More than 80 percent of the region's forests are dry savannah woodland (miombo). Closed humid forests are restricted to the eastern coastal region or highlands which receive an intense rainfall. A few remnants of closed dry forest are scattered in parts of Ethiopia, Madagascar, Malawi, Mozambique, the United Republic of Tanzania, Zambia and Zimbabwe.
FIGURE. The Preferential Trade Area for Eastern and Southern African States
The miombo consists mainly of Brachystegia tree species. Pockets of highland forest contain some semi-deciduous trees with a height of 15 to 21 m, including Ocotea usambarensis, Juniperus procera, Podocarpus spp. and mountain bamboo (Arundinaria alpina), but the total volume of commercial quality timber is limited.
Under the colonial powers during the early part of the twentieth century, the building of railways and other settlement infrastructure led to an unprecedented use of timber. The discovery and exploitation of minerals copper, gold, diamonds - led to further exploitation of the available natural forests for wood energy, pit props, construction and mining infrastructure. The low yield of the miombo forests and the isolated clusters of closed forest clearly could not meet this demand, and industrial forest plantations began to be established.
With independence, over the last two-and-a-half decades many of the countries of the subregion, motivated by a desire to achieve self-sufficiency in forest products despite a poor endowment of natural forest resources, have invested heavily in industrial forest plantations (Kamau, 1988a,b). Other key factors that contributed to the push toward establishing industrial plantations were: poor distribution of national forests within the countries relative to market location; the land-locked status of many of the countries, making forest product imports difficult and costly; the clearing of substantial areas of the already limited natural forest area for agricultural and other human settlement needs; the need to create rural employment opportunities. Of the estimated total of 1.8 million ha of forest plantations in Africa, nearly 1.2 million ha or more than 65 percent are in eastern and southern Africa. The major industrial forest plantations are in Kenya (160 000 ha), Malawi (80 000 ha), the United Republic of Tanzania (120 000 ha), Zambia (52 000 ha) and Zimbabwe (110 000 ha), which together account for about 83 percent of all the industrial forest plantations in the region.
The heavy investment required for the establishment of these plantations was justified by the existing demand and by the expectation that the forest plantations would create an industrial base for both domestic markets and export. Unfortunately, in a number of cases these expectations have not been met and substantial stocks of mature timber have resulted. Overall, about 4 million m³ of plantation wood is used annually whereas the existing plantations have a potential to supply a sustainable volume of 11 million m³ per year. Thus, the region has an annual surplus of about 7 million m³ of plantation wood.
For example, in 1964 Malawi started to create the 56 000 ha Viphya forest plantation to support a planned export-oriented pulp-mill. As a consequence of contracting demand and the global recession in the 1980s, the mill was never built. Currently, less than 15 percent of the annual increment of potentially harvestable mature timber is being utilized.
In Zambia, an Industrial Plantation Division was formed in the Forest Department in 1960 and charged with establishing forest plantations to supply the needs of the mining industries that were the driving force in the national economy. The subsequent decline of copper prices on the world market had a devastating effect on the mining industry and hence on the entire national economy. The need for industrial roundwood and sawnwood was likewise affected and, although the plantations have now matured, they are giving few economic returns.
The nursery of an industrial plantation in the United Republic of Tanzania
Overall, the situation characterized by a growing excess of underutilized or unused plantation timber can be attributed to a combination of poorly developed forest industries; sluggish domestic demand; undeveloped export markets; a lack of adequate infrastructure and communications (resulting in high transport costs); as well as various tariff and non-tariff barriers that constrain intraregional trade. Among these factors, the inadequate development of forest industries merits consideration first.
Sawmilling, the earliest wood-based mechanical industry to be introduced in the subregion, dominates the industry and accounts for between 50 and 90 percent of the wood production in most countries of the subregion. If pit-sawing is considered, it becomes even more important. Initially, all of the sawmills were based on logs from natural forests and, because of the local nature of their markets and the lack of investment capital, most were small and often fitted with reconditioned machinery and equipment.
The type of equipment used in sawmilling today varies widely from simple roller benches, producing a few hundred cubic metres per annum, to very large, integrated mills with annual capacities on the order of 30 000 m³. The total number of sawmills in the PTA subregion is estimated at approximately 630 units. In eastern Africa, Kenya and the United Republic of Tanzania dominate with 300 and 130 mills, respectively. In southern Africa, Mozambique has the largest number of mills (60), followed by Zambia (28) and Zimbabwe (26). Most sawmills in the subregion utilize plantation timber, with the exception of Mozambique where much of the industry still depends on natural forest. As time goes on, the industry will inevitably shift even further toward dependence on plantation timber; Kenya forced the pace in 1986 when it banned sawmilling of indigenous logs.
Regardless of size, most of the sawmills in operation produce sawn timber of low quality. Reasons for this include lack of management skills; shortages of skilled labour; poor maintenance of equipment; shortages of hard currencies for procuring spares parts; and the inaccessibility of markets for high-quality products. In addition, small-scale mills tend to offer sawnwood at low prices, therefore decreasing incentives for the larger, more modern mills to produce higher-quality products as these would require higher pricing.
Wood-based panel industries
At present, there are 16 units producing plywood and veneer in the PTA; total production in 1989 was estimated at 60 000 m³ for plywood and 9 000 m³ for veneer sheets (FAO, 1991). With the exception of Kenya and Malawi, production is still based on indigenous raw materials. Given that the raw material does not lend itself to production of decorative veneers, output primarily consists of products for basic construction and packaging. The market for local plywood includes producers of utility furniture, tea chests and export packaging for cash crops such as strawberries.
Although fibreboard plants exist in a number of countries in the subregion - for example, Ethiopia, Kenya and the United Republic of Tanzania - production falls far short of capacity and only very small quantities are currently being produced. Acceptability has been slow because of the relatively low quality and high price of the output.
In 1986 Kenya banned the sawmilling of indigenous logs.
In the photo, transporting plantation timber from Kenya
Pulp and paper
Pulp and paper is the forest industry sector in which the subregion as a whole has demonstrated the strongest growth. Production is concentrated in five countries: Kenya, Madagascar, Swaziland, the United Republic of Tanzania and Zimbabwe. By far the dominant producer is Swaziland whose Usutu Pulp Company pioneered pulp production in the subregion. The first pulp-mill was established in 1961 with an initial production level of 60 000 tonnes per year. Production has grown steadily to its present level of about 180 000 tonnes per year, primarily of unbleached kraft, making it the largest producer in Africa and accounting for 12 to 14 percent of the world's supply of unbleached kraft softwood pulp.
To guarantee a sustainable supply of raw material, the company has established some 65 000 ha of pine plantation, more than 60 percent of the total plantation area in Swaziland.
In the past, 90 percent of Swaziland's pulp production was exported outside Africa, primarily to the Republic of Korea, Japan, Taiwan (Province of China), Italy, Belgium and the United Kingdom. However, as result of increasing competition from Latin American suppliers, at present about 50 percent of production is utilized in Africa domestically, in Zimbabwe and in South Africa.
The Panafrican Paper Mills Ltd (Panpaper) in Kenya, is another success story in the subregion. The mill was established in 1974 at Webuye, then a small town in western Kenya. Location of the mill was dictated by the proximity of wood resources, availability of an adequate and constant water supply and the existence of a good network of road and rail communications with the main East African trade centres. In 1989, Panpaper produced 56 000 tonnes of pulp and 108 000 tonnes of paper and paperboard. Future expansion is expected after the installation of new technology permitting the de-inking and recycling of waste paper. Additional investment in technology designed to permit the use of bagasse from the sugar mills in western Kenya is also being planned. This technology would permit the production of an additional 35 000 tonnes of packing grades of paper.
The Southern Paper Mills Company Ltd is located in Mgololo valley in the Mufindi District of the United Republic of Tanzania, some 600 km southwest of Dar-es-Salaam. Based mainly on raw material from pine and eucalyptus plantations, current production is some 35 000 tonnes of pulp and 28 000 tonnes of paper, or approximately 70 percent of rated capacity.
In Zambia, the only paper-mill, Zambesi Paper-Mills is based on waste paper recycling. Current production is some 4 000 tonnes per year, or about 50 percent of installed capacity. Feasibility studies are under way to expand capacity and incorporate pulp production.
Regional trade balance
Since 1982 the subregion's trade balance in forest products has been a situation of net imports. In 1989 the total value of forest exports was about US$94.3 million, compared with imports of $117.3 million (FAO, 1991). Moreover, a single product from a single country - wood pulp from Swaziland - accounted for 98 percent of the total export value. Trade in other basic wood products - sawnwood, veneer sheets, plywood and other wood-based panels - is relatively small. The volume that is traded a limited amount because of generally low quality - goes overwhelmingly to Eastern Europe and Scandinavia, following long-established trading relationships.
On the other hand, trade within the subregion as well as with the rest of Africa is minimal and what exists is often of a cross-border, informal nature (Mubita, 1990). Intraregional trade is hampered by high transport costs resulting from a lack of good road and rail networks, plus a host of tariff and non-tariff barriers (Kamau, 1988a).
Manual stacking of pulpwood in Zimbabwe
Intraregional cooperation in development of plantation-haled forest industries for PTA member states - FAO project RAF/87/117
Since mid-1988, a project executed by FAO with financial support from the United Nations Development Programme (UNDP) has been assisting the PTA countries to promote cooperation in the development of forest industries. The main objectives of the project are:
- identification of forest plantation resources, industries and markets that hold potential for further development through subregional cooperation; promotion of expended use of plantation timber, development of market strategies and marketing methods with a view to increasing trade in forest products;
- rationalization of plantation-based finest industries and development of product planning to maximize the utilization of existing ran material resources, cater to the needs of the market and substitute supplies currently obtained from outside the PTA;
- promotion of human resource development at all levels within the subregion's forest industries.
The main activity of the project to date has been the preparation of studies and surveys and the collection of relevant information from the subregion. More than 50 reports covering the industry, products, markets and human resources have been prepared by the project. One area that has proved to require further investigation is the quality of national data on plantation resources as well as the cost of harvesting these resources.
The project has acted as an industrial consulting service to specific industries in PTA member countries, as well as confronting the larger issue of utilizing the massive potential yield of plantation timber on a subregional basis.
With regard to increasing communication and collaboration on intraregional trade issues, the project has been successful in expanding the range of forest products on the preferential trade list. The main areas requiring attention are increased information on market and price trends, grading and standards and cost factors associated with transportation systems. An important contribution in this area has been provided by the publication of a quarterly newsletter.
In terms of human resource development, the project has included a series of seminars and training courses attended by some 150 senior industry and government participants. However, overall human resource development in forest industry has been hampered because forest products receive only marginal treatment at the universities and institutes offering forestry degrees and diplomas in the subregion. The recent opening of the regional Forest Industries Training Centre in Zimbabwe is expected to make a positive impact on the situation.
Based on progress achieved to date, a recent evaluation mission recommended that the project be continued at a higher level of activity for a further four years.
The project is helping to rationalize use of plantation timber.
In the photo, a portable sawmill in use at a plantation in Kabwe, Zambia
The policy issues
In order to realize the goal of improving their populations' living standards, as part of their overall development plans the countries of eastern and southern Africa will have to pursue policies aimed at promoting sound development of forest industries and fostering the expansion of trade in forest products. Forest industry policies should aim at increased investment capital inflow to the sector for the upgrading, repair and maintenance of machinery and other equipment. They should also address the problem of an adequate supply of raw materials and provide for the training of technical and managerial personnel.
A key area for policy attention is the development of markets for the forest products of eastern and southern Africa. Deliberate efforts are required to stimulate the consumption of forest products in the PTA subregion. At the country level, the physical, economic and social factors that govern the end-uses of forest products and their relative impact on total demand must be analysed carefully. Marketing practices, including product identification, establishment of quality standards, advertising, promotion and pricing policy, need to be streamlined and effectively applied.
A notable feature in the development of forest industry in eastern and southern Africa to date has been the lack of communication or collaboration between neighbouring PTA signatories. For example, eight of the countries in the subregion have plans to expand or establish new pulp- and paper-mills. Considering the substantial investment required and the obviously scarce financial resources, is this really a prudent approach?
Furthermore, the real hope for the development of forest industries in the subregion lies in intraregional trade. For both pulp and paper and mechanical forest products (lumber, panels, etc.), the distance of the land-locked supplies from ports and markets is a strong barrier. Moreover, many of the mechanical forest products produced in PTA countries do not possess qualities found in either products derived from tropical high forests or from temperate forests, and their ability to compete in the world market is consequently limited.
Industry development based on subregional coordination
Expanded intraregional trade in forest products will require intensified development of national forest industries and, of key importance, subregional coordination in this development.
A strong argument can be made for dedicating primary attention to the pulp and paper industry. There is a need for a drastic reduction of the heavy and rising annual expenditure of scarce foreign exchange on imports of paper and paperboard. Second, the subregion has already demonstrated managerial experience and technical skills in the production of pulp (Swaziland) and paper and paperboard (Kenya and Zimbabwe). Finally, the subregion has a large softwood forest plantation resource which is capable of supplying the raw materials needed by the mills.
Intraregional trade is limited.
In the photo, Zambian timber for export to Botswana and South Africa
The best option would be to expand the capacities of integrated pulp and paper production in two selected countries. The output of these mills would be directed primarily toward the needs of the subregion and only secondarily toward external markets. One mill could produce the annual requirement of 100 000 tonnes of kraft, sack and liner paper, while the second mill could concentrate on printing and writing papers. It is noteworthy that this would also require a concentration of pulpwood plantations as transportation difficulties would make it economically unfeasible to transport wood from the region's widely scattered plantations to one or two centralized mills.
The other forest industries, including sawmills, plywood, particle board and fibreboard mills also need to be upgraded and rationalized in the aim of facilitating intraregional trade. In sawmilling, this will mean installing machinery in the larger mills to permit them to handle small-diameter logs. This will help favour the larger mills, where production is more efficient and quality control can be ensured. Moreover, in the larger sawmills processing residues can be used to support the development of particle board and fibreboard production.
Beyond moves aimed at strengthening the forest industry as such, policy measures will need to be implemented to reduce and eventually eliminate intraregional tariff and non-tariff trade barriers for forest products produced by countries in the subregion. In recognition of this, signatories of the PTA treaty have worked to promote mutually beneficial agreements to liberalize intraregional trade. An increasing number of forest industry products have been granted discounted tariff rates, ranging from 10 to 70 percent. However, a problem area which is still to be effectively addressed is how to promote trade among countries with non-convertible currencies.
In respect to its theoretical capabilities and compared with the rest of Africa, the PTA subregion underproduces and underconsumes forest products. An improvement of forest industries, and particularly of trade in forest products could contribute significantly to increasing living standards in the region. However, improvement of forest product trade means revamping the forest industries. Capacity utilization in existing industries needs to be greatly expanded, with the primary objective of serving domestic and intraregional markets. This will require improved organization and management of mills and a dramatically more efficient use of existing plantation resources. The existence of tariff and non-tariff barriers and restrictions hampering access to markets is also a serious trade problem that must be overcome.
Enabor, E.E. 1989. Macro-economic framework. RAP/87/117, Field Document No. 4. Lusaka, Zambia, FAO.
FAO. 1991. FAO Forest Products Yearbook 1978-1989. Rome, FAO.
Kamau, F.M. 1988a. A situation report on forest resources, industries and markets for forest products in Kenya, Malawi, Tanzania, Zambia and Zimbabwe, RAF/87/117, Field Document No 1. Rome, FAO.
Kamau, F.M. 1988b. A situation report on forest resources, industries and markets for forest products in Burundi, Ethiopia, Mauritius, Rwanda, Somalia, Swaziland and Uganda. RAF/87/117, Field Document No. 2. Rome, FAO.
Mubita, O.S. 1990 Forest resources, productivity, marketing and trade of forest products in the PTA subregion. Lusaka, Zambia, FAO.
Nduna, F.B. 1989. A comprehensive survey of existing forest industries in Ethiopia, Kenya, Tanzania and Uganda. RAF/87/117, Field Document No. 20. Lusaka, Zambia, FAO.
UNECA. 1981. Treaty for the establishment of the Preferential Trade Area for Eastern and Southern African States. Addis Ababa, Ethiopia, United Nations Economic Commission for Africa.