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FDT entrenching modern timber processing in TZ

FDT entrenching modern timber processing in TZ

TANZANIA is a blessed country, in the sense that practically in every village you will find a woodlot, whether that village or district is found in arid central Tanzania or in rain-endowed parts of the country.

The woodlot you will find there is either owned by an individual, a religious agency or it is an indigenous forest owned either by the village government or by the central government.

Therefore, Tanzania can turn those trees into wealth for export. Also, Tanzanians can transform their lives using mature trees surrounding them. But trees have to be planted and be given a chance to grow and mature. For only mature trees can be sawn and processed into wealth, primarily timber that people use in various types of work.

At the moment, the Forest Development Trust (FDT) says Tanzania’s forest area is 48.1 million hectares, and this area has to be increased by planting new trees. Fortunately, beyond indigenous forests, the FDT says, small private growers have emerged as the single largest source of supply of industrial wood, but the supply is insufficient.

Actually, FDT warns that there is a huge gap between supply and demand. FDT calls for comprehensive support to these growers, saying strengthening in various ways the position of these private growers presents a huge opportunity to address the current gap between supply and demand, while simultaneously increasing incomes of many Tanzanians and reducing poverty.

The forestry sector can be a big cog in the engine that seeks to modernize the economy and transform lives of millions of poor families. Tanzania has the Tanzania Development Vision 2025 (TDV or Vision) and various complementing strategies.

The government says the TDV envisions Tanzania that is “transformed from a low productivity economy to a semi-industrialised one led by modernised and highly productive agricultural activities, which are integrated and buttressed by supportive industrial and service activities in rural and urban areas.

The development indicators of TDV 2025 comprise: (i) high quality livelihood (ii) peace, stability and unity (iii) good governance (iv) a well-educated and learning society and (v) a competitive economy capable of producing sustainable growth and shared benefits.” The strategies complementing TDV include (2016- 2026) National Skills Development Strategy [NSDS] and the National Strategy for Growth and Reduction of Poverty (NSGRP).

The TDV and all these programmes will succeed by using well God-given resources which include forestry resources. Having a plant with up-to-date sawing technology and methods in village does not only create jobs for primary, secondary and tertiary college graduates, but it also creates a technical base at that level.

When you have such an industrial plant in a village, it means you have taken to that village a modernised and highly productive forestry activity the TDV talks about.

Those benefits aside, such a plant will broadly contribute to Tanzania having a competitive economy and a society with high quality livelihood.

Therefore, it is not wise to take these issues lightly because some demographic experts suggest that Tanzania’s population will reach 60 million in 2050, and 2050 is just round the corner! History will still demand that that a society of 60 million must be one with high quality livelihood.

The FDT says that in 2025, Tanzania’s demand for industrial wood will be more than 3.7 million cubic metres, but existing plantations will only be able to supply roughly1.1million cubic metres. More trees are needed.

To underscore this fact, the TFT says plantations run by government and several large-scale wood growers make up just 0.3% of the current total forest area of 48.1million ha.

FDT, says it has national scope “but initially it is focusing its activities in the southern highlands of Tanzania, where 60,000 people are already growing trees.” Based on what is revealed in the foregoing paragraphs, forestry stakeholders in Tanzania are many and varied.

The FDT is a forefront stakeholder and now it is struggling to transform timber saw millers into engineered wood products entrepreneurs. It is battling to engineer a revolution in timber processing like the one that has been engineered in the small scale mining sub-sector, where mining, processing and marketing has been sharply improved, albeit financing is still inadequate.

This effort, in a way too, will make the general population appreciate the importance of forests as a source of income and take forests as a tool for creating jobs and improving lives of millions of Tanzanians.

Forests, like mines, can and will allow creation of industrial establishments which, in turn will create jobs for skilled and semi-skilled young people.

Although wood processing technology has undergone transformational change, evolving from the conventional manual methods to mechanised and improved sawing technology and methods, the glaring truth, we are told, is that adoption of the improved timber processing technologies in Tanzania has been slow due to systemic challenges, such as high costs of equipment, limited supply and lack of financing to support investments.

Fortunately, Tanzania has reached a stage where some banks are willing to finance wood processing that is using modern technology. One such bank is the Tanzania Commercial Bank (TCB).

TCB recently said it has partnered with Forestry Development Trust (FDT) and LonAgro Tanzania Limited to develop an asset financing product. This brings to mind what took place on Friday, September 3, this year, in Mufindi town, Iringa Region.

In that town, TCB, FDT and LonAgro Tanzania Limited launched a joint financing product they call a tailored lending service product for the commercial forestry sector.

The trio say their product can and will transform small scale saw millers and enterprising entrepreneurs who currently lack financing into millers and entrepreneurs envisioned in the TDV. To observers, if serious efforts will be employed, the product is likely to help Tanzania produce small, medium and big saw millers and entrepreneurs just as is the case in the mining sector.

Serious forestry stakeholders have a lot to learn from the mining sector. We were told the product will focus on sawn timber processing technology while exploring expansion of lending opportunities into other wood processing value chains, such as engineered wood products.

“With this product, borrowers will enjoy a reduced interest rate to the tune of 15% and payment term of up to 24 months,” the TCB pledges.

Villages and District leaders should discuss with TCB and TDT how to implement this pledge. What took place in Mufindi could be an eye opener to village and district leaders where forests abound.

These leaders must know that they have an opportunity to establish sawn timber processing plants in their villages and districts. It is a question of changing the mindset and putting to good use private public partnership (PPP) initiatives. In every district there is a district business council chaired by the respective district commissioner.

In one of the meetings of this council, this new forestry initiative can be discussed and members can suggest ways of starting PPP wood products ventures. Representatives can be drawn from say the TFT, the TCB, a village government, a cooperative, a religious agency and enterprising individual and LonAgro Tanzania, VETA and SIDO.

Mufindi district has already shown the way. Things agreed on in such meetings should be sent to the secretariat of the Tanzania Business Council and the Tanzania Private Sector Foundation.

Important as the forestry sector is, but we are still told that the sector’s efficiency remains low, predominantly due to use of poor technology. Inefficient technology limits effective use of scarce raw materials from plantations or forests and also limits profitability in processing firms.

Forestry stakeholders, who do not know, would well be told that Margules Groome’s undertook a feasibility study entitled “Exploring Opportunities for EWP value chain development in Tanzania- 2019. The relevance of this study would be seen by linking it to the National Engineered Wood Products Development Framework which was recently endorsed by President Samia Hassan.

We are told, in principal, the framework seeks to facilitate establishment of at least 200 different EWP manufacturing factories by 2031. Only 9 years are left to enter 2013. Rhetoric on Tanzania’s industrialisation agenda is good, but it is not sufficient for its realisation.

Trees and forests found in every village and every district harbour the potential of starting industrial wood processing plants. With experience, operators of industrial wood processing plants will grow into engineered wood products manufacturing factories.

Actually Margules Groome’s feasibility study says EWP value chain presents “the biggest industrialization opportunity for Tanzania’s forestry sector.” During Mufundi launch the public was told that the partnership of the three organisations “brings together important key parties critical to addressing the challenges of access and use of improved processing technology.

In addition to other equipment, LonAgro will supply mobile sawn timber processing equipment and will provide after sales support such as supply of spare parts and technical services.

“Through the Tanzania Forest Services Agency (TFS), the government has provided an enabling environment by providing raw material allocation contracts to saw millers of up to three years, which is an important guarantee to both the bank and the processors of availability of raw material for processing.

“This innovative new partnership is working to address existing systemic and structural challenges that face the financial services market segment of the commercial forestry sector that have so far left it largely untapped.

In Mufindi District alone, it is estimated there are more than 500 operating saw millers whose operations are dominated by conventional saw milling technology which needs updating through investment into more efficient equipment,” the launch statement said.

It also said improved technology will enhance profitability of the processing firms, improve quality of timber and access to high value overseas markets and regional markets in Zambia, Congo and Kenya.

About the writer: He is a professional journalist, working as a Media Consultant and Researcher based in Dar es Salaam.

He can be reached at keasi1971@gmail.com or +255 713466661

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Author: Correspondent PETER KEASI

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