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Sao-Hill Industries Ltd and its contributions to national growth

IN January 2019 I had an opportunity to visit and learn from the Sao- Hill Industries Limited (SHIL) whose main operations are conducted within the Sao-Hill Forest Plantation area.

The plantation is managed by the Tanzania Forest Services Agency (TFS) on behalf of the Government. The SHIL possesses about two (2) hectares on which industrial processes and manufacturing are performed.

According to the information by Mr. Godlisten Minja, Country Director for the Green Resources Limited (GRL); the SHIL is owned by GRL of Norway, operating also in Mozambique and Uganda.

Thanks to the Almighty God for enabling me to visit SHIL premises in Mufindi District and witnessed what the industry is doing.

The Green Resources Limited apart from operating a sawmill, the company is also involved in planting trees to create additional raw materials base apart from Sao-Hill Forest plantation.

So far GRL has established about 17,000 ha of Pines and Eucalyptus species. Previously, Sao-Hill industries limited was operated by the Tanzania Wood Industries Company limited (TWICO).

Nevertheless, the company acquired the Sawmill, after the government decision to privatise the assets.

Apart from the Sao-Hill Industries limited there are several small operating Sawmills popularly known as “Dingdong” estimated to be about 400 units each employing, on average, two or three people.

Furthermore, there are several medium and large wood processing mills, which include the Mufindi Pulp Mill (MPM) located at Mgololo near the Tanzania - Zambia Railway (TAZARA).

The Sawmill operates using two lines of processing and production of different wood products. One line is handling treatment of transmission and fencing poles and the second one processing logs into timber, which is also used to produce various wood products like furniture and other wood based products.

Recently, the company introduced a section to deal with wastes by producing charcoal briquettes supplied to large consumers like the University of Dodoma.

In addition to that wood off-cuts are further processed into “wood-chips” sold to the Mufindi Pulp Mill. Sometimes they receive order from customers with specified timber moisture content i.e. of about 12%, thus, such requirements are met because there is special wood drying machinery (technologies).

In such operating environment, the Sao-Hill Industries limited is capable of producing high quality timber and other wood products.

According to information provided by the Managers, there are some tangible benefits that accrue to adjacent local communities and individuals.

Firstly, the Sawmill obtains most of its raw materials from the Sao-Hill forest plantation, which is a reliable source of revenues for the government (both central and local authorities through royalty and cess respectively).

Secondly, the adjacent villages and communities are beneficiaries through employment opportunities and regular corporate services provided thereby supporting local development infrastructures and priority social services in the fields of health, education and water.

Additionally they encourage people to plant trees by providing quality tree seedlings and technical advice (the outcomes on this will be covered in a separate article).

According to the Human Resources Manager (Ms Jane Lyimo), Sao-Hill Industries deploys both permanent employees and casual labourers whose number depends on nature of work and field activities usually ranging from 200 to 1000 labourers.

According to Mr Viatus Bahati Rusagaza, the Industries Sales Director indicated that the Industry has 265 permanent employees.

Thus, through employment about 1000 people are beneficiaries (direct and indirect benefits) and also remittances to social security funds (e.g. PSSF) as well as payments to TRA (through VAT), cess to local authorities and other state institutions like OSHA (statutory charges) are additional national benefits.

In principle, the forest based industries are necessary to attaining sustainable development through contributions to livelihoods improvements and economic growth.

If we can have more of such forestry inclined industries no wonder Tanzania can advance by utilising her forest resources accordingly. Since the Sao-Hill industries and others in the Mufindi District are using two species (Pines and Eucalypts) as raw materials, it follows therefore that through increased tree planting and management, we can create additional employment opportunities.

It is therefore, an opportune time to call upon all Tanzanians with ample land, to venture into tree planting. In doing so we shall pave our way towards managing and utilisation of our forest resources on sustainable basis.

In 2015 the Ministry of Natural Resources and Tourism (MNRT), based on the national forest resources monitoring and assessment (NAFORMA) reported that, in Tanzania, wood deficit is about 19.5 million cubic metres (m3).

In order to meet demand and ensure sustainable forest management with accruable tangible ecological services; the mainland should plant 185,000 to 200,000 ha annually.

Once this is attained, we shall fuel growth of wood processing industries in various locations throughout the country. Furthermore, expanded tree growing will reduce rates of land and natural forest resources degradation.

The African Union (AU) intends to rehabilitate degraded land by targeting 100 million ha done by 2030 (AFR100) in the context of Bonn challenge while at the same time; contributing to the African Resilient Landscape Initiative as well as the UNSDGs including the New York Declaration on forests that assemble and extend the Bonn challenge to restore 350 million ha globally by 2030.

Tanzania is committed to restore 5.2 million hectares of degraded forestlands and other landscapes by 2030 thereby contributing to AFR100 and the Bonn challenge commitments.

This is crucial for Tanzania’s industrial economy national policy. Land is indeed required and as much of degraded forest and general land, can be restored and availed to effective and sustainable economic uses, will be very useful indeed. Fast growing and economically viable species like Bamboos should be used.

The fact that we are not producing sufficient timber resources and the gap between demand and supply continues to widen: leading to unhealthy forest resources situations throughout the country.

In that context, there is no option except to expand efforts and grow many trees for the future and environmental conservation and people’s wellbeing.

● Dr Felician Kilahama is Chairman, Board of Directors, Tanzania Forestry Research Institute (TAFORI)

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Author: Dr FELICIAN KILAHAMA

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