Towards a development strategy for the processing in the Congo Basin WHITE / 2 Cover pagephoto: Logstorage, Cameroon,©FAO/M. Vandenhaute M. Cameroon.Vandenhaute ©FAO/ T f i processing in the countries of the Congo Basin Paper is intended as a reference document for readers to understand the situation, challenges and options for the development of wood n o o * “White Paper” is a term used in several domains to designate a tool to communicate with the public. In the specific case, this White

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RECAP WOOD INVEST Project of the European Union’s (EU’s) Pro€Invest Programme, FAO Programme, Pro€Invest (EU’s) Union’s INVEST Project of the European WOOD RECAP and ITTO. elements contained in the working document White paper summarizes the strategic The present in the and other stakeholders It is aimed mainly at policy-makers points. up its salient and takes Africa. sector in Central policy-makers a response from encourage will hope that this publication and ATIBT ITTO FAO, all the stakeholders tool that will help involve as a reference to the issues identified and also act industry Africa. forest in Central of a sustainable in the development Foreword the Republic Gabon, of Cameroon, the Governments 2011, 2010 and June September Between Tropical with the International together of the Congo, Republic and the Democratic of the Congo International the (IFIA), Association Industries Forest Interafrican the (ITTO), Timber single merged into a now – the latter two Association (ATIBT) Timber Tropical Technical a series organized Facility, Programme through the National Forest FAO, organization – and The main outputs of these processing in the Congo Basin. of workshops on the subject of wood the workshops a working then became the subject of for entitled Recommendations document in the Congo Basin processing of wood development WHITE PAPER / 4 specifications andrequirementsastheformal oftaxation, traceability andwork same rules supplies amarket thatisnotgoverned by the outmainlyintheinformal sectorand is carried throughtothefinishedproduct oftheresiduesand by-products.underutilization activity intheCongoBasin,withlow yieldsandan processingisby farPrimary themostwidespread means. facilities and market, withrudimentary working which mainlyprovide finishedproductsfor thelocal (SMEs), with smallandmedium-sized enterprises markets linkedcoexist tointernational enterprises economic activity, inwhichlarge-scaleforest Wood processingintheCongoBasinisamajor be kept up to date and any progress taken into account. It is dynamic in nature and will therefore need regular revision so that relevant information can and implementation of development strategies for the forest industry in the Congo Basin. This White paper brings together a series of reflections and suggestions for the formulation Summary factory, Gabon,©FAO/O. Serrano the governments ofthe Congo ofthecountries change related requirementsetc.),inrecent years Timber Regulation,environmental and climate- and becauseofnewcrisis requirements(theEU wood, bothbecauseofthe economic to African markets, which arebecomingincreasinglyclosed Given thechangestakingplaceintraditional export of any nationalorregionalstrategic framework. The individualinitiatives thatdoexist arenotpart climate isnotencouraging for investment. interested inlocalmarkets, andthebusiness areonlymarginally Large-scale forest enterprises competitive withtheformal sector. sector.industrial This sectoristhusextremely 5 / WHITE PAPER during the workshops political, to with regard facilitate that could fiscal measures and legislative measures These proposed their implementation. coordination the strengthening example: for envisage, of a national- and promotion among institutions the wood for interprofessional organization level sectors informal and formal the of integration sector; activities; subcontracting of development the through access facilitated at all levels; boosting of training a as of an image of wood promotion to finance; a and structuring supply; of wood material; noble barriers institutional and trade reduction in legal, among countries and regions in order to facilitate the improve and combat illegal trade flows, trade of African production. competitiveness For each of these strategic thrusts, the White paper thrusts, the each of these strategic For as expressed stakeholders of presents the views The strategic elements identified for developing elements identified for The strategic processing up to the final product comprisewood ensuring a firm main thrusts: will and a political four facilitated guaranteeing climate; favourable creation access to inputs and production means; and structuring chain; of a structuredvalue wood markets. formal up profitable The reflections and suggestions in this White paper suggestions in this The reflections and workshops of four in the course developed were September 2010 and June between organized Congo, of the the Republic 2011 in Cameroon, Congo and Gabon. of the Republic the Democratic partThese workshops were of the multistakeholder of the the governments by dialogue launched development. forest sustainable to view a with region Action on from the Accra paper follows White The of 2010. event Plan of 2009 and the RACEWOOD Basin have focused on developing local, regional local, developing on focused have Basin products. wood for markets continental and echo among formal is finding a new This focus enterprises sector. in the wood Wood processing. © FAO/M. Vandenhaute, © T. Baldassarri H. von H., © FAO/O. Serrano H., © FAO/O. von Baldassarri H. T. © Vandenhaute, © FAO/M. processing. Wood WHITE PAPER / 6 of markets at the continental level continental the at markets of * differentiation Taking the of advantage houses forwooden image positive a of Creation * wood promoting policy state a of Establishment * power purchasing that supply a of Development * markets inter-African of development Further * * Establishment ofatargeted, incentivizingfiscalsystem Facilitation * of the expansion of subcontracting activities strategy continental, even or regional, a of Development * systems justice and administrative the and future country’s the in enterprises’ of confidence Boosting * concerned institutions state and sectors various the among coordination and dialogue of Boosting * country’sdevelopment the in chain value wood the of importance the of by policy-makers Recognition * and afavourable business climate Strategic thrustsfor thedevelopment ofwood processing Ensuring afirmpoliticalwill profitable formal markets up of wood processing Development to inputs and production means Guaranteeing facilitated access forwood facilities storage of Establishment * services and infrastructure of Development * training of Boosting * financing to access of Facilitation * materials raw legal sustainable, to access of Guarantee * * Promotion of entrepreneurship of Promotion * organization * Encouragement of an interprofessional clusters of Creation * production good-quality standardized, of Development * supply of standardization forthe norms of Establishment * activities their of complementarity the of stakeholders and actors various the among awareness of Creation * Creation ofastructured wood value chain 7 / WHITE PAPER ?? rr ee pp aa pp

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yy hh WW Log storage, Democratic Republic of the Congo. © F. Van de Ven de Van © F. of the Congo. Republic Democratic Log storage, WHITE PAPER / 8 Promotion of Intra-African Promotion ofIntra-African Trade in Timber and Conferenceproduced by theInternational on region andfollows onfromtheAccra ActionPlan to thesustainable development offorests inthe by theCongo Basingovernments withaview ofthemultistakeholder dialoguelaunched It ispart chains. andtheeconomicdevelopment ofvalue thesustainable developmentconcerning offorest (COMIFAC), especiallyitsfifthstrategic thrust ForestPlan oftheCentral African Commission This White paperchimes withtheConvergence for inrecentyears. haveof theCongoBasincountries beencalling and employment. And thisiswhatthegovernments that would generate addedvalue, nationalwealth economies by developing processingactivities contribute moretonationalandsubregional ofthe formal economy,that part could The wood value chainintheCongoBasin,atleast Why a White paper? Sawnwood, Republic oftheCongo. ©Danzer AG, Baar dans le bassin du Congo" 2 For details of these workshops, see , working document (in French only). FAO/ITTO/ATIBT . 2013. "Recommendations pour le développement de la transformation du bois Democratic Republic oftheCongoandGabon. 2011 inCameroon,theRepublic ofthe Congo, the organized between September 2010andJune formulated over thecourseoffour workshops forest intheCongoBasin. industry These were and implementationofstrategies todevelop the reflections andsuggestionsfor thedevelopment This of togetheraseries White paperbrings financed by thePro€Invest Programme oftheEU. organized by IFIAinCameroonMarch2010and June –2July 2009,and theRACEWOOD event Timber Productsorganized by ITTO inGhana,30 in the Congo Basin best to develop the forest industry the stakeholders’ views on how and suggestions, expressing A compilation of ideas 2 9 / WHITE PAPER industry Africa. in Central Because of its dynamic nature, the White paper the nature, Because of its dynamic so that relevant will need regular revision can be kept up to date and any information taken into account. progress or guidelines to answer these questions, but rather but these questions, or guidelines to answer expressing a compilation of ideas and suggestions best to on how of the stakeholders the views industry the forest in the Congo Basin. develop hope that their publication and ATIBT ITTO FAO, of political, the establishment will encourage and fiscal measures throughout the legislative Congo Basin and in each individual country been identified, to address the issues that have tool that will help a reference and also provide with a view all the stakeholders to involve to supporting processing, developing wood forest a sustainable and establishing markets How can the consumption of wooden products wooden of consumption the can How How is the informal sector to be integrated with sector to be integrated is the informal How What should be done to involve the forest the forest What should be done to involve to a quality finished product of local wood? to a quality finished product of local wood? Informal market, Democratic Republic of the Congo. © T. Baldassarri H. von H. von Baldassarri H. T. © of the Congo. Republic Democratic market, Informal The White paper does not offer recommendations White paper does not offer The  promoted? be Basin Congo the of inhabitants the by the formal economy without hampering its economy the formal while local consumers, dynamic or forgetting chain leading through helping it to set up a value industry more in national and regional sector much finished or semi-finished products from for markets Africa?Central  During these workshops, those involved in the During those involved these workshops, of the chain, mainly leading officers value servicesgovernment concerned and the private processing of wood the issue tackled sector, addressing three broad in the Congo Basin by of questions: groups  WHITE PAPER / 10 Small-scale chainsaw Republic. milling,Central African ©FAO/M. Vandenhaute W s o o m o e d

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B a s i n : 11 / WHITE PAPER Primary processing is still still is processing Primary the in activity foremost the place takes and Basin Congo sector informal the in mainly the small and medium-sized enterprisesthe small and medium-sized and industries to provide (SME-SMIs) that strive working with finished products to the local market, industry forest has little The rudimentary facilities. which are deemed interest in local markets, favourable not is climate business the and unattractive, promising some course of are There investment. for

Wood product artisans, Democratic Republic of the Congo. © T. Baldassarri H. von H. von Baldassarri H. T. © of the Congo. artisans, product Republic Democratic Wood There are thus two sectors existing side by side: side by sectors existing There are thus two enterprisesfirst, the large-scale forest that are well and, second, connected to international markets; The processed forest products – mostly sawnwood, mostly – products forest processed The large-scale – produced by and plywood veneers enterprises working are mainly in the Congo Basin the primaryexported to Europe, world for market whereas logs are sent to Asia where tropical wood, not used in species that are also take the markets Europe. some features some Africa processing in Central is a major Wood informal, the by out carried mainly activity, economic with limited technical and small-scale sector, structures, and few little training financial means, is available. which no precise information and for Wood processing in the Congo Basin: Basin: Congo the in processing Wood WHITE PAPER / 12 2010. roundwood amountedto14millioncubicmetresin Council (FSC)certified. Extractions ofindustrial plan andabout5millionareForest Stewardship million hectares, 30 million are under a are given over to production. And of these 56 million hectares, approximately 56millionofwhich the oftheCongoBasincover about243 Forming an unbroken block like that of the Amazon, Forest resources national orregionalstrategic framework. individual initiatives, butofany they arenotpart Carpenter, Democratic Republic oftheCongo. ©F. Van de Ven each year. InbothGabonandtheCentral African for receipts about40percentofnationalexport Republic,African oftimberaccount whereexports percent inGabonand11theCentral Republic Guinea,3 oftheCongoandEquatorial Democratic Republic oftheCongo, 1percentinthe 2006 was about2percent inCameroonandthe The contribution oftheforest sectortoGDPin 3 FAO. 2011. 3 The state of forests in the Amazon Basin, Congo Basin and Southeast Asia from theformal sector have littlechanceofplacing ofqualityandsustainability,about criteria products account by consumers, who tend to be unconcerned takenGiven into istheonlycriterion thatprice costs, specifications) as formal industrial production. rules (taxation, traceability, management, labour supplies amarket thatisnotgoverned by thesame littleinvestment. very thus requiring This production outwithchainsawscarried ormobilesaws and poor quality the informal sector, withproductsorpoorvery activitybut outmainlyin iscarried important very Wood processingthroughthefinalproductisa and other elaborated wood products. of kilometres,hundreds rather than exporting sawn themwiththeirwastelogs, over transporting still often more profitable for enterprises to export and by-products Yields are poor, with underutilization of waste forest law andtheCongo’s 2000forest law. voluntarist policythatisseeninCameroon’s 1994 rates istheresultofa inthesetwo countries among enterprises. The relatively highprocessing depending ontheyear, withawidedisparity Congo therate varies between 51and65percent is processedlocally, whileintheRepublic ofthe In Cameroon, almost 75 percent of forest production There aremajordifferences. amongcountries 2010, has the largest number of industrial facilities.Basin. wood, plywood), is the main activity in the Congo Primary processing (sawnwood, veneering, sliced Features of the wood processing industry employer inthenationaleconomy, aftertheState. Republic, thewood sectoristhesecondlargest Gabon, which banned the export of logs in . Informal production is mainly artisanal, . FAO, . . Throughout the Congo Basin, it is 13 / WHITE PAPER . The Infrastructure services and . still inadequate are region, the throughout sparse is network unasphalted, and state poor a in often are Railways links. cross-border few are there and insufficiently is network their and obsolete often are on focused basically is traffic Sea developed. to time some for so remain will and Asia or Europe difficult both remain services intra-regional if come, from ports suffer many addition, In expensive. and that etc.) facilities (draught, problems technical some in or – efficient being from them prevent wood and extraction Forest operational. even cases absence the by much as affected are processing and price competitive a at supply electricity an of inadequate by as cuts power unpredictable by routes. communication Voluntary Agreements (VPA-FLEGT) Agreements Partnership Voluntary Within Congo Basin. inroads into the are making Forest on Plan Action EU’s the of framework the (FLEGT), Trade and Governance Enforcement, Law force into came (which Regulation Timber EU the EU the on trading the forbids 2013) March 3 on harvested illegally been has that wood of market due of proof provide operators that requires and EU the on products forest placing when diligence FLEGT the under also hand, other the On market. Agreements Partnership Voluntary Plan, Action EU the between negotiated being are (VPAs) guaranteed a develop to countries producing and Cameroon, wood. harvested legally of supply African Central the and Congo the of Republic the agreements and VPAs, signed already have Republic Democratic the and Gabon with negotiated being are Congo. the of Republic themselves on a market that is therefore highly is therefore that a market on themselves competitive. Log marking, Cameroon, © FAO/M. Vandenhaute Log marking, © FAO/M. Cameroon, WHITE PAPER / 14 controlcabin,Republic oftheCongo. ©Danzer AG, Baar D i n e t v h e e l

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15 / WHITE PAPER Ensure a firm political will will political firm a Ensure climate, business favourable a and access facilitated guarantee wood the structure inputs, to structure and chain value markets formal profitable The strategy to develop wood processing in the processing wood to develop The strategy Congo Basin countries through to the final product a firm priority political will and has four thrusts: access facilitated climate; business a favourable chain; creation of a structured value to inputs; and the structuring markets. formal of profitable

The European market demands quality and an The European market requirements that Congo efficient, punctual supply, Basin enterprises sometimes find it hard to meet. an importantThe economic crisis has also played wood for role in reducing European markets Expanding Asian coming from the Congo Basin. also wood materials, but raw want markets interest a growing and are showing products, The standards required of species. in a wide range the European market, are not as high as those for changing. although this situation is rapidly In recent years, the governments of the Congo of the governments In recent years, of on the development focused Basin states have wood for national, regional and continental markets echo among is finding a new This focus products. since their enterprisesformal sector, in the wood are mainly in Europe, exporttraditional markets, shrinking limited on a and concentrating gradually of species. number Log and storage, Gabon, © FAO/O. Serrano Log transport Gabon, © FAO/O. and storage,

in the Congo Basin Congo in the Developing wood processing processing wood Developing WHITE PAPER / 16 thus helping to consolidate supply, which is very fragmented at present within regional subgroups by facilitating travel, improving market information and organizing* tradeTaking fairs and shows, advantage of the differentiation of markets at the continental level: housing act as flagship products, and create wood promotion centres; develop a prototype wooden* frameworkCreation of afor positive low-cost image for wooden houses: and public, industrial and agricultural * Establishment of a state policy promoting wood: improve finishing and conservation in order to safeguard quality Development * of a supply that matches purchasing power: * Further development of inter-African markets or relief and the reduction in rates * Establishment of a targeted, incentivizing fiscal system: SMEs * Facilitation of the expansion of subcontracting activities harmonize customs documents and codes in order toand facilitate regions thein movementorder to of facilitate trade *flows, Development combat of a illegalregional, trade or even and continental,improve the strategy: competitiveness of African production;and envisioning a reasonable timeframe for a returnfor workingon investment; in solvent, significantly profitable reduce markets, parafiscal *facing Boosting or fair, informal of transparent leviesenterprises’ competition, confidence having a clear in theidea ofcountry’s future profits future and* theBoosting administrative of dialogue and coordination and justice among systems: the various sectors and state institutions concerned* Recognition by policy-makers of the importance of the wood value chain in the country’s development Ensuring afirmpoliticalwillandfavourable business climate Building upprofitable formal markets establish a minimum quota for the use of wood in collective housing develop a wooden architecture for public buildings, which would a whole set of targeted measures, such as tax exemption between the formal forest extraction sector and reduce legal, institutional and trade barriers among countries control and improve material yields; optimize by-products; establish links between supply and demand of wood processing create conditions Development 17 / WHITE PAPER and (1) management plans; (2) land tenure and and tenure land (2) plans; management (1) in order to control costs and achieve greater productivity greater achieve and costs control to order in in order to improve industrial and economic effectiveness economic and industrial improve to order in group large-scale enterprises, SME-SMIs and artisans and SME-SMIs enterprises, large-scale group transport, electricity transport, including a range of species and good-quality kiln dried kiln good-quality and species of range a including establish a fund specifically for developing the wood processing wood the developing for specifically fund a establish create a fabric of well-managed SME-SMIs and develop an “industry “industry an develop and SME-SMIs well-managed of fabric a create at every level in the value chain: materials and techniques; and ; and marketing techniques; and materials chain: value the in level every at - zones where operators are concentrated are operators where zones - Creation of a structured wood value chain value Creation of a structured wood Guaranteeing facilitated access to inputs and production means production and inputs to access facilitated Guaranteeing cadastral policy; (3) traceability of ; (4) a sustainable balance (in volumes and species species and volumes (in balance sustainable a (4) material; raw of traceability (3) people local policy; and cadastral demand domestic capacity, processing extraction, forest of level among extracted) permits allocating for procedures of simplification (5) and requirements; financing: to access of basis the Facilitation on * prefinancing or development forest of basis the on refinancing by of lines and sector processing of training of Boosting * occupations new services: and infrastructure of Development * areas urban near wood * Guarantee of access to sustainable, legal raw materials: raw legal sustainable, to *access of Guarantee *Establishment of storage facilities for wood, wood, for facilities storage of *Establishment the advantages they could draw from synergies from draw could they supply of advantages the standardization the for norms of Establishment * and ideas for force a become to order in who organization operators for structure interprofessional a providing wood-sector thus national a union, in trades together or in together artisans group action; manner individualistic highly a in often profitability and entrepreneurship: of performance of Promotion * objectives with operators, small-scale among ” chain value and * Encouragement of an interprofessional organization: organization: interprofessional an of Encouragement * in the face of imports not only of wooden products but also of products of competing materials ( etc.) (aluminium materials competing of production products of mass also but good-quality products standardized, wooden of of only Development not * imports of face the in clusters of Creation * * Creation of awareness among the various actors and stakeholders of the complementarity of their activities activities their of complementarity the of stakeholders and actors various the among awareness of Creation * Development Development of wood processing of wood WHITE PAPER / 18 development ofthelocalmarket throughan measuresas the introductionofsuchsupport regional andcontinentalmarkets. This means and semi-finishedproductsonthenational, means toprocess, enhance andmarket finished States shouldprovide localoperators withthe raising theissueofapenalizingCFA franc. competitiveness cannotbeaddressedwithout are notenough. Similarly, thequestionof for oninvestment. areturn Tax incentives alone in thefutureandenvision areasonable timeframe have aclearideaoftheprofitsthey canexpect profitable markets, face fair, transparent competition, administrative andjusticesystems, insolvent, work andtheregion,in future ofthecountry sector must beable tohave confidenceinthe entrepreneursintheformal Local andinternational value chaininitscountry’s development. androleofthewood recognize theimportance requiresthattheStatefirst chain inCentral Africa The development ofthewood processingvalue Political willandanimproved business climate Sawmill, Gabon,©B. Castadot processing value chain. of industry, tocreateandequipaproperwood residues andby-products; andthoseincharge charge oftheenvironment, tooptimize wood products relatedskills; thosein and highereducation,toprovide training inwood competitive cost; thoseinchargeofsecondary and development ofenterprises; thoseincharge items),andalsoontheestablishment imported (machinery,imports tools,and other accessories action over fiscalmeasures, and bothonexports in chargeoftheeconomy andfinance, totake legallyandsustainablymaterial accessible; those those inchargeofforests, tomake qualityraw the various sectorsandstateinstitutionsinvolved: of onthe part effort All thisrequiresaconcerted among countries in order to develop regional markets. andthecoordinationofcustomspolicies electricity) investment in infrastructure and services (transport, investmentsupply tosupport andconsumption, fiscalpolicy,appropriate development ofbanking of energy, toimprove supplies ata electricity 19 / WHITE PAPER Create the conditions conditions the Create process, to operators local for finished market and enhance products semi-finished and regional national, on markets continental and Capacity development to strengthen the sector, Republic of the Republic to strengthen the forestry sector, Capacity development Parker/TFT © E. Congo. mass production and economies of scale. scale. mass production and economies of the formal between in subcontracting An expansion sector and carpentry have forest may SME-SMIs productivity impact on the cost of inputs, a positive and also on the development and competitiveness, beams, products (glue-laminated of new roof prefabricated lintels and frames, regional, continental national, etc.) for and walls and international markets. fiscal system incentivizing A targeted, levy taxation and informal The current formal of a modern systems hamper the development chain because of a multiplicity value wood formal Wooden products, such as or are such as doors or windows products, Wooden customer’s the to according measure, to made often Measurements carpenter. the to instructions individual which vary from one order to another, therefore becomes a handicap in terms of industrialization, The harmonization of customs documents and of goods. the movement codes could facilitate Such harmonization could start among the zones African Economic and West of EMCCA, the Economic the (WAEMU), Union Monetary Southern the and (ECOWAS) States African West of (SADC). Community African Development about necessitate indepth knowledge This would production and markets. and potential existing Within the Commission of the Economic and Within the Commission of the Economic Monetary Africa of Central (EMCCA), Community it is observed rules, especially those that some concerning goods freedom of circulation of are being ignored and that informal and people, Non-tariff protective are penalizing trade. levies to the wood mechanisms are the main hindrances procedures, administrative very lengthy trade: corruption of economic frequent roadblocks, been signed that have VPAs The etc. operators as partor are being negotiated with the EU of the this situation. FLEGT process could improve The whole African market has an equivalent value AfricanThe whole equivalent has an market Russian Federation. or the Brazil to that of whether of national markets, The narrowness or because of low reasons demographic for of a hinders the development purchasing power, chain, which means that states need value wood – continental or even a regional – to formulate This will entail reducing institutional, strategy. barriers and trade among countries legislative flows, trade to facilitate and regions in order competitiveness the improve and trade illegal combat of African production. Regional impetus Regional also be provisions with regard to import duties, which could reduce the high cost of inputs (varnish, glue) for carpenters, cabinet-makers and other professions. WHITE PAPER / 20 Differentiated tax rates can encourage the use and processing of a wider range of species. However, the taxation system must stay simple, and in this scenario only two groups of products can be defined (“promotion”/”classic”), with a very low rate for the promotion group.

Peeler log, Gabon, © FAO/O. Serrano A very low rate of VAT for on the domestic market would be a great incentive, especially in the

of taxes and a fiscal system unsuited to the desired context of the legalization of the informal sector, as objectives. In Cameroon, for example, the tax on would exemption for certain petroleum products. wood entering a mill is a considerable deterrent. Lastly, it is often suggested that taxation thresholds could be adjusted depending on the degree of the

A whole set of targeted measures can be processing of the wood (primary, secondary or envisaged, such as tax exemption or relief tertiary). It should be noted, however, that in many (from VAT etc.) or perhaps reductions in rates. cases where it is applied, this taxation mechanism For such provisions to be effective and efficient, has barely been effective enough to encourage regional-level reflection on them is needed. enterprises to increase their processing.

Taxes on activities intended for export and those Taxation should be designed on the basis of national for the domestic market can be differentiated. needs (for example, Cameroon has a deficit in veneering, In Cameroon in particular, a tax on the export while Gabon has a deficit in sawnwood) and must be of processed products could be reintroduced, adaptable while remaining predictable. which would allow products intended for the domestic market to be exempt from tax. The free The “parafiscal” or informal levies made by allocation of log export quotas to processing decentralized state representatives, especially enterprises is another possibility that would be those posted along traffic routes or those who effective if it is based on verifiable, objective control extraction permits, can represent up to 15 criteria. It is nevertheless important to carry out a percent of the sale price of sawnwood in towns. proper evaluation of the repercussions that such It has been estimated that in Cameroon informal measures, introduced at the national level, could taxes represent 2 000 to 3 000 CFA francs per have on trade on regional markets. cubic metre, as against 1 000 to 2 000 CFA francs in Gabon. One of the best incentives for individual

Differentiated taxation can be applied to regulated sawyers to legalize their activity would therefore be micro-enterprises (clusters, approved management to guarantee them a significant reduction in such centres etc.) and unregulated ones, and also to informal levies – although in a way that this various types of investment (mobile saws as reduction would not be completely offset by the opposed to planing machines etc.). There could costs associated with legalization. 21 / WHITE PAPER Promote management plans plans management Promote establish forests, all for balance sustainable a extraction forest of guarantee and traceability the materials raw of extraction, processing capacity, domestic demand processing capacity, extraction, requirements. and local people’s allocating permits can be The procedures for in processing reducing the time taken simplified by redefining responsibilities for applications or by can framework The legislative them at each level. of to authorize the recovery in order be revised wood. In the current situation, national markets in the In the current situation, national markets Congo Basin are undersupplied with quality wood, as almost all, and in some cases all, inasmuch setting up a However, export. is intended for wood chain entails first and foremost value national wood There has a concern as to the source of the supply. and who on who cut it and where, to be information and with what documents. supplied the market This means that each country should promote all forests, management plans for sustainable and registration land tenure launch a wide-ranging regulations the actors, the identify clearly and policy identifying raw procedures for and the in force can be monitored through materials, so that they also help to Such an approach must traceability. and balance (in volumes a sustainable establish of forest among the level species extracted) Raw materials Raw Access to inputs and means of production Access to inputs and Log haulage, Central African Republic. © C. Duhesme © C. African Central Republic. Log haulage, Near towns, the existence of large enough storage Financing facilities with a range of species and good quality kiln dried wood at competitive prices is vital for Financing policies and mechanisms are inadequate establishing a market and a really effective value and penalize a capital-intensive activity. Borrowing chain. conditions are so prohibitive (in duration and rates) WHITE PAPER / 22 that large enterprises have little or no recourse Structuring the value chain would enable to solve to them, while small-scale operators find the lack the problem of the availability and storage of wood, of access to credit a major handicap. The absence and also actions to raise awareness about good of working capital prevents them from obtaining quality kiln dried wood among those involved in the good quality wood in order to fill orders. The sector and consumers. Within an integrated value establishment of a fund specifically for developing chain, kiln drying of wood could be subcontracted, the wood processing sector would solve this type as far as the SME involved in forest harvesting are of problem. concerned.

Facilitate access to clearly identified and identifiable financing

Measuring log diameter, Central African Republic. © C. Duhesme 3/ WHITE PAPER 23

Portable chain-sawmill, Central African Republic. © FAO/M. Vandenhaute

Generally speaking, financing must be clearly use and maintenance of equipment, management, identified, identifiable and accessible. accounting etc.). Lines of credit must be opened. Materials and techniques. Generally speaking, artisans In the Democratic Republic of the Congo, donors work with very few species, hardly ever using most such as the French Development Agency have of the vast range of species found in the Congo put in place guarantee products that allow Basin and often being unfamiliar with their properties. to share the risk, extend the maturity timeframe, Enterprises lack qualified staff of all types: reduce obligatory guarantees etc. Lines of credit sharpeners, sawmill operators, cabinet-makers can be created by refinancing on the basis of forest and carpenters, production and finishing operators, development or prefinancing on the basis of processing. designers, timber engineers etc.

Marketing and design. With a view to getting Training established on local, regional or continental markets,

Training is a priority thrust and requires a national Boost training policy, inasmuch as there are virtually no proper at all levels training facilities in the whole of the Congo Basin. in the wood processing Training needs to be boosted for all levels in the value chain wood processing value chain (training for sawyers, carpenters, cabinet-makers etc., and training in the WHITE PAPER / 24 for withanoble working material. conditions,working andeven socialrecognition staff by offeringand themadequatesalaries of attracting young people and keeping its competent Apart from training, the value chain must be capable apprenticeship andmentoring. Increased stressshouldalsobeplacedon but alsocomputers, managementandaccounting. products quality and the maintenance of equipment, linked to the environment, wood traceability, legality, .New jobopportunities There arealsonew jobs etc. household carpentry veneering, modern office furnishings, cabinet-making, elements, wooden houses,shipoutfitting, , “buy local”: , design items, interior architectural marketing thatencouragesappropriate peopleto in ordertomeetexisting orfutureneeds, through training inpreciseandtechnicaltrades isneeded Forest Cameroon,©FAO/M. roadconstruction, Vandenhaute a combinationofallthesefactors. substituteproductsdependon with imported and theabilityofvalue chaintocompete The physical availability ofgoodqualitywood in general. workshops, theuseofdryers, andindustrialization value chain,especiallyfor themechanization of of acompetitive, wood processing structured, is oneofthefactors thatmosthamperthe creation Thus, thelack ofareliable sourceofelectricity Congo Basinmeansthatwood must bekilndried. of amarket for finishedwooden productsinthe and regional markets. The creation and development roleinthedevelopmentplays aprimary ofnational andelectricity,Infrastructure, especiallytransport Infrastructure andservices are needed infrastructure and services Adequate 25 / WHITE PAPER Raise the various actors’ actors’ various the Raise awareness stakeholders’ and complementarity the of activities their of synergies of advantages the and too expensive for local purchasing power. local purchasing power. for too expensive processing enterprisesNevertheless, could target tertiary for at national level that exist niche markets processing. of local sector has a good knowledge The informal has a good marketing demand and in general supplies products at competitive It also network. Cameroon in that estimated is it example, for prices; produced the price of a cubic metre of sawnwood artisans than that produced by percent lower is 20 difference This average sawyers. professional by Republic in the Democratic of 20 percent is found planks. of the Congo for In fact, tertiaryIn fact, processing is often out of reach for these enterprises to secondary linked processing the moment is export-quality production, which for The strength of large-scale enterprises lies in their management, extraction, skills regarding forest and peeling, dryingsawing and development, machining, the quality of their production, their with world and their financial markets familiarity However, and expansion. investment capacity for of access to marketing run problem into the they of a large- and the lack channels in local markets scale local market. The Congo Basin has no properly structured wood a chain of actors stretching chain – that is, value from harvesting to the sale of a house or a tasks of One of the main a piece of furniture. institutions and industrygovernment associations of how actors aware is that of making the various their activities complement each other and the from synergies. can draw they advantages Creation of a structured value chain value Creation of a structured Artisanal wood processing, Democratic Republic of the Congo. © T. Baldassarri H. von H. von Baldassarri H. T. © the Congo. Artisanal of Republic processing, Democratic wood WHITE PAPER / 26 Clusters (zones where operators areconcentrated, Clusters economic efficiency. and of supplyarethusthesourceindustrial The existence andthestandardization ofnorms at affordable thankstoeconomiesofscale. prices purchase theseproducts, whichcanbeoffered once underway, encourage consumersto quality oftheproductsplacedonmarket and, andsmall-scaleoperators canraise the industry at localandregionalmarkets. Atie-upbetween key elementsinawood processingstrategy aimed isoneofthe withartisans Connecting industries technical skills. However, thisinformal sectorlacks financial and Marking wood products inasawmill,Marking Republic oftheCongo. ©E. Parker/TFT; Informal market, Cameroon,©B. Castadot while facilitating accesstoraw materials. and allows thecreationofanemployment pool, processing investment andtertiary insecondary financial and administrative services. This encourages facilities maintenance,to industrial transport and graded –thatis, “traced” –wood andallow access economy. Clustersfacilitate thesupplyofkiln dried, follow intotheformal fromitsincorporation informal sectortoidentifythebenefitsthat would as hasbeendoneinCameroon)canhelpthe the quality of products can improve with artisans Connecting industry 27 / WHITE PAPER Develop a wood-sector wood-sector a Develop organization interprofessional fabric a create and SME-SMIs well-managed of not earn as on profit on the local market as much the international if only (or inter-regional) market, with the informal competitive are not because they sector. example, for envisaged, be may it hand, other the On for its market sector might develop that the formal inter-regional the to it expanding products, processed as a sideline. while supplying the local market level There is also the question of the impact that the and work legalization of small-scale extraction the signing prices, whether it follows on have would sector. the structure to policy a of part is or VPA a of The creation of a fabric of well-managed SME-SMIs well-managed of fabric a of creation The the artisanalis vital in order to provide sector with a structure industrial and encourage enterprises through in processing to work with them and invest requires, This products. semi-finished and finished to “industry of an and the development example, for among small-scale operators, chain culture” value and profitability objectives. with performance enterprisesAs things stand at present, formal will Entrepreneurship Large-scale enterprises,and artisans SME-SMIs together within a national should be grouped interprofessional organization, in wood-sector ideas and action. for order to become a force of artisans the grouping be preceded by This may would which or associations, into cooperatives who often work in operators a structure provide for Economies of scale a highly individualistic manner. with negotiating collectively by could be achieved Inputs could thus be adapted equipment suppliers. capacities. investment to the operators’ An interprofessional organization organization An interprofessional Sliced veneer, Republic of Congo. © Danzer AG, Baar AG, © Danzer of Congo. Republic Sliced veneer, WHITE PAPER / 28 locally. create jobsand wealth by generating addedvalue improvement incountries’ balanceof trade and (aluminiumetc.).materials This would allow an of wooden products but also of products of competing should beachieved notonly intheface of imports should alsobecontrolledandgreater productivity good-quality massproductionisneeded; costs If thesemarkets aretobecaptured,standardized, creator ofskilledjobs.the potentialtobeprime products, ofhomes, especiallytheconstruction has manufacture offinished andsemi-finishedwooden inhabitants.consume morethanrural The 400 millionofwhomlive intowns andtherefore economic growth. Ithasapopulationof1.05billion, enjoyingof theregionsworld thegreatest that thepotentialisconsiderable. isone Africa percent comes from the continent itself, which means US$4billioneachyear,products worth but only10 The market alreadyexists: wooden imports Africa Building-up profitable formal markets Informal market, Democratic Republic oftheCongo. © T. H. Baldassarri von H. and windows tobeenhancedatminimum cost, quality andcompetitiveness doors offurniture, stored underadequateshelterwould allow the that the productis painting etc.)andensuring (seasoning, assembling, varnishing,gluing, waste intoeco-materials. Improving thefinishing processingmethods canconvert woodAppropriate converted intoreconstitutedsolidwood. could findbetteroutlets, for example, ifthey are or smallpiecesofwood, whicharelessexpensive, and capitalize onwaste material. By-products facilities,optimal useofindustrial reducecosts Controlling andimproving yieldswould allow Develop a supply that matches purchasing power good-quality products thanks to standardized, Capture African markets 29 / WHITE PAPER Create a positive image for wooden houses wooden for image a positive Create In comparison demand potential, the national with in the Congo Basin. is low houses wooden for embedded deeply still is hut village the of image An poverty with associated often mind, collective the in is thus not always Wood and dilapidated shacks. material, a conception seen as a noble poor-quality a supply of cheap, up by backed is leading many acculturation In addition, products. good or of good that anything inhabitants to think come from abroad. quality must authorities could help to change these Public architecture wooden developing perceptions by act as flagship which would buildings, public for promotion centres. creating wood and by products, a prototype also be useful to develop It would housing. low-cost for framework wooden Wooden house, Cameroon, © FAO/O. Serrano Cameroon, © FAO/O. house, Wooden In most countries in the Congo Basin, except In most countries in the Congo Basin, except of such a perhaps Cameroon, the application measure comes up against the question of cost: than importing. is more expensive local” “buying to be generally were if such a provision However, at which reach a level applied, demand would leading to a apply, economies of scale would reduction in unit price. Development of the local market can be brought can market of the local Development promoting wood a state policy about through the use of quota for a minimum establishing by public housing, collective markets, public in wood buildings industrial schools) and (health centres, and agricultural and also in tools of buildings, use. everyday as compared with imported as compared items. or substitute markets of public Role WHITE PAPER / 30

Plywood production, Gabon, © FAO/O. Serrano

Links therefore need to be established between Take advantage of the differentiation of markets supply and demand within regional subgroups by at continental level facilitating travel, improving market information and organizing trade fairs and shows. This would help Although African markets represent a potential to consolidate supply, which is very fragmented in themselves, they are relatively complex, today, and also to develop mass production, thus being in the throes of development. This means reducing costs and attracting the interest of those that only enterprises with a certain level of cash involved in the value chain. flow can take advantage, inasmuch as it requires an outlay on such things as market and accessibility studies, marketing, competence in international financial transactions, clear terms of payment and guarantees.

The subregional market of Central Africa is more accessible and is extremely promising: it can be developed by speeding up subregional trade facilitation, opening up markets, guaranteeing supply, payments and the quality of products, making partnership agreements with foreign enterprises and optimizing by-products. It also requires some standardization, as well as equal treatment of actors by the administration. 31 / WHITE PAPER

For forest enterprises, is a direct link there forest For management forest a sustainable between on approach focusing “industrial” and an approach processing of secondary yields and the improved export) into deemed unfit for species (or products national, intended for value products of high added or internationalsubregional, continental markets. means proposing a This stress on processing quantity, on than quality on more focuses that model concernedand one that is more about the forest itself. thanks in sector, informal of the The integration particular be beneficial would to subcontracting, sector. formal the to also but SME-SMIs, to only not This will require a firm a favourable political will and the creation of a structured value climate, business finance, access to inputs, chain and facilitated and transport.training based on the here, reflection offered The points for are industry, of those working in the wood views of suggested as a starting the formulation point for development the sustainable for national strategies industryof the forest in the Congo Basin.

At present most of the processing and value added value At present most of the processing and place takes the local market intended for of wood This represents a loss sector. in the informal competition the state and unfair of earnings for contributes and enterprises, established formally for thus in the sector, of transparency to a lack a national the difficulty of developing exacerbating sustainable. and permanent solid, is that chain value at times a delicate matter, it is hard, even However, it is lucrative for sector, to regulate the informal and exploitation stakeholders a good many for resources is one of the economic of wood financial impact on rural activities with the greatest inhabitants. Conclusions processing industry wood represents The forest the in development sustainable for a potential achieved, potential is to be If this Congo Basin. enterprises and wood large-scale forest (which for if only evolve, must foreign) are predominantly is rapidly market The European survival. their own as a result not only of the , closing to tropical requirements. also of new economic crisis, but The industry count on can on the whole no longer must but extraction, forest expanding areas for new new, resort for to the creation of added value African markets. Cameroon, © FAO/M. Vandenhaute Cameroon, © FAO/M. This White paper brings together a series of reflections and suggestions for developing wood processing in the Congo Basin. These points for reflection, based on the views of those working in the , are offered as a starting point for the formulation of national strategies for the sustainable development of the forest industry in the Congo Basin.

FOR FURTHER INFORMATION, PLEASE CONTACT:

FAO Forestry Department www.fao.org/forestry

Association technique internationale des bois tropicaux (ATIBT) www.atibt.org

International Organization (ITTO) www.itto.int

This document has been produced with the financial aid of the European Union and the support of Pro€Invest. Its contents are the sole responsibility of ATIBT, FAO and ITTO and may not in any way be considered the position of the European Union.

© ATIBT, FAO, ITTO, 2013