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European Union Secretariat of the Pacific Community

Facilitating Agricultural Commodity Trade Project (FACT)

Development of a Market Information System for Solomon Islands Timbers

March 2009 Secretariat of the Pacific Community Suva, Fiji

Prepared by: Salwood Asia Pacific Pty Ltd Canberra, Australia Authors: Stephen Midgley Richard Laity

Contributors: Eugenia Katsigiris Peter J. Eddowes Alan Brown

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©The authors 2009 Cover photograph: Hardwood logs arriving at Honiara port

DISCLAIMER Qualifications Salwood Asia Pacific Pty Ltd ACN 108 926 656 is a registered business name with the Registrar General’s Office of the Government of the Australian Capital Territory. The person responsible for the preparation of this document is Mr Stephen Midgley, RPF, who was assisted by Profes- sional Intern, Mr Richard Laity. Mr Midgley has had substantial experience in the forest industry and has formal qualifications from the Australian Na- tional University. He has worked in the forestry sector in Australia and overseas for CSIRO, Government agencies and private companies. His work has been recognised internationally and he is a member of the Institute of Foresters of Australia and a Registered Professional Forester (RPF). Mr Laity is a graduate forester from the ANU with experience as an Australian Youth Ambassador in the Solomon Islands. Declaration This report has been prepared at the request of Dr Lex Thomson, Project Team Leader, SPC Facilitating Agricultural Commodity Trade Project, and the Responsible Officer for the Project.

Disclaimer The statements and opinions contained in the document are given in good faith, but in the preparation of this document, Stephen Midgley, has relied, in part, on information supplied from other sources. The document has been prepared with care and diligence, however, except for those responsibilities which by law cannot be excluded, no responsibility arising in any way whatsoever for errors or omissions (including responsibility to any person for its negligence), is assumed by Salwood Asia Pacific Pty Ltd or employees for the preparation of this document.

Limitations upon use This document is for the use of the party to whom it is addressed. No responsibility is accepted to any third party who may use or rely on the whole or any part of the content. Neither the whole or any part of this document, nor any refer- ence thereto may be accepted in or with or attached to any document, circular, resolution, letter or statement, without the prior written consent of Stephen Midgley, as to the form and content in which it is to appear.

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Terms of Reference

1. Identify sources of price information for 3. Advise on markets and prices for plantation- Solomons timbers. Key species include Ptero- grown teak (especially small-diameter mate- carpus indicus, Vitex cofassus, Pometia pin- rial). nata, Intsia bijuga, Campnosperma 4. Advise on potential markets and prices for brevipetiolatum, Gmelina moluccana, Termi- Flueggea poles (naturally durable small poles) nalia brassii, Paraserianthes falcataria, Dil- into Australia and New Zealand for horticul- lenia alata, Calophyllum spp. , Agathis tural industry and other purposes. macrophylla and Palaquium spp. 5. Explore new market opportunities for SI 2. Evaluate value-adding options (sawing, kiln wooden handicrafts. drying, dressing etc) — cost of operations ver- sus improved returns (taking into account re- 6. Explore market opportunities of blocks of covery rates) for two major timber species speciality timbers (including ebony, figured (one native, one plantation) to give an indica- timbers, etc.) for wood turners/craftsmen tion on economics of value adding through 7. Undertake preliminary market intelligence and timber processing. trends for SI timbers.

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Contents

Terms of Reference ...... iii Acknowledgements ...... vi In Australia ...... vi In New Zealand ...... vi Acronyms ...... vii Summary ...... viii 1. Introduction ...... 1 The FACT Project ...... 1 The Solomon Islands ...... 2 Solomon Islands’ forestry sector ...... 2 Challenges to the management of natural forests ...... 4 Plantations ...... 4 2. Sources of Price Information for Solomon Islands Timbers ...... 5 Factors influencing log prices ...... 5 Sources of information on log prices ...... 9 3. Evaluation of Value-Adding Options ...... 17 Tree selection ...... 17 Sawing ...... 17 Sawing patterns and timber dimensions ...... 19 Seasoning ...... 19 Considerations for kiln drying ...... 19 Log protection and timber treatment ...... 20 Grading sawn timber ...... 20 Issues in container transport ...... 20 Furniture ...... 21 Costs in export markets ...... 24 Value-adding opportunities for kwila and teak ...... 24 4. Markets and Prices for Plantation-Grown Teak (Tectona grandis) ...... 29 Plantation teak and teak in the Solomon Islands ...... 29 International teak markets ...... 29 International prices for plantation teak ...... 30 5. Potential Markets and Prices for Flueggea Poles into Australia and New Zealand for Horticultural Industry and Other Purposes ...... 36 Background to Flueggea flexuosa ...... 36 Potential markets as vineyard posts in Australia and New Zealand ...... 36 Issues ...... 37 Challenges ...... 39 6. Market Opportunities for Solomon Islands Wooden Handicrafts ...... 40 Background ...... 40 Challenges ...... 41

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7. Market Opportunities of Blocks of Speciality Timbers for Wood Turners/Craftsmen43 Market knowledge of Solomon Island speciality timbers ...... 44 Market reliability ...... 44 Products and market needs ...... 44 Costs ...... 44 Size of markets ...... 45 Marketing ...... 45 Conclusions ...... 46 8. Market Intelligence ...... 47 9. Conclusions and Recommendations...... 49 Conclusions ...... 49 Recommendations ...... 49 10. References ...... 51 11. Annexes ...... 54 ANNEX 1 FIELD T RIP ITINERARY, SOLOMON ISLANDS ...... 54 9–20 December 2008 ...... 54 ANNEX 2 PEOPLE CONSULTED ...... 56 ANNEX 3 ACCESSING C HINA CUSTOMS DATA ...... 58 The contents covered in this annex are: ...... 58 1. Types of data available and product categories ...... 58 2. Liaison with China Customs and ordering data from abroad ...... 59 3. Price for various data from China Customs ...... 60 4. Case study results ...... 60 5. Hong Kong data ...... 66 Sub-annex A: China Customs categories of wood and wood products ...... 71 Sub-Annex B: Data from China Customs in format received ...... 82 ANNEX 4 VALUE-ADDING OPTIONS FOR SOLOMON ISLAND T IMBERS ...... 85 Introduction ...... 85 A review of value adding options ...... 85 Market intelligence and trend for Solomon Island timbers ...... 91 Recommendations ...... 91 References ...... 92 ANNEX 5 D OCUMENTATION FOR EXPORT OF LOGS FROM THE SOLOMON I SLANDS 94 ANNEX 6 DOCUMENTATION FOR EXPORT OF SAWN TIMBER FROM THE SOLOMON ISLANDS . 101

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Acknowledgements

The study team acknowledges the great assistance of- In Australia fered by many people in the Solomon Islands, Australia and New Zealand who generously shared information, Mr Phil Montgomery, formerly Project Director, experience and their enthusiasm for the Solomon Is- SIFMP lands forest industry. In particular, special thanks are Mr Dan Raymond, formerly Team Leader, SIFMP due to: Mr Peter Mussett, Managing Director, The Woodage In the Solomon Islands Mr Brad Burns, NSW & Victoria Region Timber Pur- Mr Edward Kingmele, CBE, and the staff of the Minis- chasing Manager, Bunnings try of Forestry, Solomon Islands Government, particu- larly Julius Houria, Technical Advisor to Value Added Mr Ken Groves, of the Australian National University Timber Association (VATA) and an expert of appropriate sawmilling systems Mr Ross Andrewartha and Mr Peter Baldwin of the Mr Ian Sedger of Pentarch Forest Products Pty Ltd, Solomon Islands Forest Management Project Australia’s largest exporter of logs to China, offered time and patience in explaining shipping costs and the Mr Austin Holmes, Secretary, Solomon Islands For- intricacies of the China log market. estry Association Mr Andy Page, Acting General Manager, Kolomban- In New Zealand gara Forest Products Limited and staff of KFPL Mr Chris Vincent, Director, South Pacific Timber, Mr Alan Smith, WWF, Solomon Islands Auckland. Mr Vincent D. Nomae, Manager of Economics De- Mr Malcolm Scott, Chairman of Imported Tropical partment, Central Bank of Solomon Islands Timbers Group of New Zealand.

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Acronyms

€ European Euro AusAID Australian Agency for International Development CBSI Central Bank of the Solomon Islands CIF Cost Insurance Freight (CIF) at port of unloading CIFOR Centre for International Forestry Research. cubm cubic metre EPPL Eagon Pacific Plantation Ltd FAS Free Alongside Ship FD Forestry Division, Ministry of Forestry FOB Free on Board (FOB) price at port of loading GTI Global Trade Information Services, Inc. ITTO International Tropical Timber Organisation KD Kiln dried KFPL Kolombangara Forest Products Limited MIS Market Information Service of the International Tropical Timber Organisation MoF Ministry of Forestry NFPDP National Forestry Plantation Development Program RAMSI Regional Assistance Mission to Solomon Islands RMB Chinese Renmenbi (yuan) sed Small end diameter SFA Solomon Islands Forestry Association SI Solomon Islands SIFMP Solomon Islands Forest Management Project SIG Solomon Islands Government T&G Tongue in groove US$ United States dollar

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Summary

The Solomon Islands is an archipelago of over 138 islands in parency, creating an industry that is characterised by rumour, the south-west Pacific and has a population of 581,318 which misinformation and mistrust. is dominantly Melanesian. 80% of the population live in rural areas. The Facilitating Agricultural Commodity Trade in Pacific (FACT) Project operates within the Secretariat of the Pacific Forests cover over 80% of the country and contribute signifi- Community and aims to assist selected commercial ventures cantly to the social, environmental and economic well-being and producer groups into export-oriented, market-driven of the country. Commercial logging in natural forests enterprises that will consistently supply overseas markets provides significant income to the Solomon Islands Gov- with competitive products. This commissioned report, seeks ernment through export duties and to landowners through to offer a foundation of knowledge as the basis for a market royalties. The export of logs (1.4 million m3 in 2008) pro- information system for Solomon Islands timbers through the vides over 70% of export earnings and 18% of total Govern- identification of sources of price information; evaluation of ment revenue and is currently the major source of value-adding options; providing information on markets and employment in rural areas. All logs are exported to Asia with prices for plantation grown teak and potential markets and China being the dominant market. Whilst highly significant prices for Flueggea poles, and; exploration of new market for the Solomon Islands, its annual harvest of logs is small by opportunities for wooden handicrafts blocks of speciality global standards. A small plantation-based sub-sector has timbers. been developed and is being promoted to complement indus- tries based on the native forests The current levels of export-based harvesting of logs from natural forests cannot be sustained and the industry will face severe and unavoidable resource shortages in the near future. This situation is acknowledged by the logging industry. The anticipated demise of this sector has significant and potentially severe implications for the national economy, government revenue streams and rural employment. The forestry industry in the Solomon Islands operates in ex- tremely remote areas and there is limited knowledge of the broader value chain and the markets of Asia. This has led to misconceptions and a lack of information and lack of trans-

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1 Introduction

The FACT Project carriers, processors) The Facilitating Agricultural Commodity Trade in Pa- • Provision of post-harvest processing equipment cific (FACT) Project operates within the Secretariat of and storage facilities the Pacific Community and aims to assist selected commercial ventures and producer groups into export- • Assessment of new crops and products oriented, market-driven enterprises that will consis- • Marketing skills. tently supply overseas markets with competitive prod- ucts. This study in the Solomon Islands seeks to contribute to the development of a market information system for FACT activities are undertaken within the 14 Pacific Solomon Islands timbers through the identification of ACP countries, viz. Cook Islands, Fiji, Federated States sources of price information for their timbers; evalua- of Micronesia, Kiribati, Marshall Islands, Nauru, Niue, tion of value-adding options; offering advice on mar- Palau, Papua New Guinea, Samoa, Solomon Islands, kets and prices for plantation grown teak and potential Tonga, Tuvalu, and Vanuatu. markets and prices for Flueggea poles, and; explora- The objectives of the FACT Project are to increase tion of new market opportunities for wooden handi- competitiveness of Pacific exports through: crafts blocks of speciality timbers.

• Value chain analyses

• Advice on sustainable production techniques, quarantine, food safety and quality standards

• Training of managers and operators (producers,

Figure 1.1 Solomon Islands location. Note the container ports at Noro and Honiara.

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The Solomon Islands The Solomon Islands is an archipelago of over 138 islands in nine provinces in the south-west Pacific and has a total land area of 28 450 sq km (Figure 1.1). The population of 581 318 is dominantly Melanesian (94.5%) with small communities of Polynesian (3%), Micronesian (1.2%) and other peoples (1.1%)1. 80% of the population live in rural areas. The climate is tropical monsoonal, the soils are gener- Figure 1.2 The natural forest logging sector and the ally fertile and the terrain is rugged with the highest Solomon Islands’ economy (Andrewartha 2008) mountain, Makarakomburu, at 2447 metres. The coun- try’s main commercial natural resources are its forests, fish and minerals. Land is primarily held in customary ownership, and access to forest resources requires the consent of the traditional owners.

Solomon Islands’ forestry sector Forests cover over 80% of the country and contribute significantly to the social, environmental and economic well-being of the country. Commercial logging in natu- ral forests provides significant income to the Solomon Islands Government (SIG) through export duties and to landowners through royalties (URS 2006). The ex- port of logs provides over 70% of export earnings and 18% of total Government revenue and is currently the major source of employment in rural areas (Figure 1.2). Figure 1.3 Log Exports from the Solomon Islands, Q1 & All logs are exported to Asia with China, at 69%, being Q2 2008. Source: CBSI Quarterly Reports 2008a & b the dominant market (Figure 1.3). The communities and traditional landowners receive benefit from logs exports through a sharing of revenues. The revenue derived from a log ex- port is allocated as: 60% to the logging com- Solomon pany, 25% duty payable to Customs (SIG Islands Forestry government) and 15% for the Licensee (Bald- Industry win, pers. comm). The Licensee has the Tim- ber Rights to the logging concession and an agreement with the communities connected to the logging concession through the Timber Natural Forests Plantation forests Rights process. It is up to the licensee and the community in their Technology Agreement, to establish what benefits the landowners and Sawn Timber: Community Round Logs: Industrial communities get from the logging operation; • ~ 6000+ m³/year Plantations: •2008: 1.45 M m³ Plantations: normally US$ 5–7/m³ plus infrastructure •Restricted high •~ 6000 ha • 5 x sustainable •~ 25 000ha quality timber •Avg. size 0.5 ha yield •Mainly Eucalypt, (roads, buildings etc). species • ~ 70% teak, 15% • Chinese market Gmelina and teak • Portable small mahogany, 10% •Important Two companies: The tropical hardwood species of the Solomon scale milling eucalypt government KFPL & EPPL •Container •Majority < 7 yr old Islands (Table 1.1) are generally similar to revenue (Western Province) those from Papua New Guinea and have found exported • Varied quality market niches in Asia and the Pacific where they are used for plywood, furniture, flooring and construction. Figure 1.4. Components in the Solomon Islands forestry sector. Source: Roundlogs (Andrewartha 2008); Sawn timber extrapolated from MoF The Australian Government has had a long- (2008); Industrial plantations extrapolated from URS ( 2006); and com- standing program of support for the Solomon munity plantations from NFPDP (2008) Islands forestry sector through a number of bi- lateral development assistance projects. The Com- stantially to the establishment of the commercial plan- monwealth Development Corporation contributed su b- tation resource on the island of Kolombangara and the European Union is providing significant support to the

1 sector. In addition, many NGOs provide support and https://www.cia.gov/library/publications/the-world- encouragement to forestry activities undertaken by factbook/geos/bp.html communities.

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Industrial logging of natural forests and log exports In 2008, some 1 450 000m³ of logs were exported. dominate the Solomon Islands forestry sector with the Similar high exports have been recorded for the last plantations component of the sector playing a small four years and greatly exceed the estimated sustainable role (Figure 1.4). annual cut of 353 000m³/yr (URS 2006). Table 1.1 Major commercial species in the Solomon Islands’ forestry sector

Commodity Species Trade name Round logs for export Palaquium pencil cedar, red silkwood, nyatoh Pometia pinnata akwa, taun, Calophyllum spp. kalofilum Pouteria spp (syn. Planchonella) red/white pouteria Gonystylus macrophyllus ramin Schizomeria serrata beabea, pink birch Dillenia spp simpoh Terminalia brassii brown terminalia Canarium indicum gnali Burkella spp red silkwood, nyatoh Celtis spp hard/light celtis Alstonia scholaris milky pine Dysoxylum spp red dysoxylon Endospermum medullosum basswood Amoora cucullata amoora/ pacific maple Parinari papuana busu plum Maranthes corymbosa busu plum Campnosperma brevipetiolatum campnosperma Agathis macrophylla*** agathis, vanikolo kauri Syzygium spp water gum Vitex cofassus* vasa, Vitex Restricted species — export Pterocarpus indicus rosewood restricted to processed wood Intsia bijuga** kwila , merbau products (Regulation 3 under Agathis macrophylia kauri the FRU Act) Dracontomelon dao walnut Gmelina moluccana canoe tree , white beech Canarium spp Calamus spp rattan Common sawn timber spe- Pterocarpus indicus rosewood cies Intsia bijuga kwila, merbau Vitex cofassus vasa, vitex Pometia pinnata taun, akwa Carvings Cordia subcordata kerosene wood Diospyros spp ebony Pterocarpus indicus rosewood Intsia bijuga kwila, merbau, Cocos nucifera coconut Gmelina moluccana canoe tree , white beech Xanthostemon melanoxylon tubi Plantation species Tectona grandis teak, Swietenia macrophylla mahogany, Gmelina arborea white teak Eucalyptus deglupta kamarere, bagras, leda Acacia mangium mangium, salwood, black wattle Ochroma lagopus balsa *Currently restricted (must be processed before export) (pers.com. A. Holmes 12/08) **listed as a species available for round log export and not in restricted species, but not often exported because of poor form. ***Listed in the determined value schedule (for round log export) but is a restricted species Sources: Eddowes (2005) and SIG (2008).

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Natural Forest Wood Flows 1995-2055 Challenges to the management of 1600000 natural forests 1400000 Predicted The Central Bank of the Solo- 1200000 mon Islands has questioned the sustainability of the current rate 1000000 of log extraction (CBSI 2008: 17). At current rates of log har- 800000

vest, it is estimated that the re- Volume(m³) source will be largely depleted 600000 by 2011 (Figure 1.5). An esti- 400000 mated 6.2 million cubic metres Sustainable Yield (255 000m³/year) of commercial timber remains in 200000 the forests of the Solomon Is- lands and Ago (2008) suggests 0 that the rate of harvest should be 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 reduced to 155 000m³/year to Year enable the forests to recover over the next 40 years. URS (2006) have assessed non- Figure 1.5. Natural forest wood flows 1995–2055 (URS 2006; Konairamo 2008; Ago declining yield at 353 000m³/yr 2008 and Solomon Islands Customs data) only if the annual cut was re- duced to 248 000 m³/yr from 2006 to 2050. This ap- pears unlikely to happen. Plantations The plantation sub-sector was originally established as The current levels of export-based harvesting of logs an initiative of the Solomon Islands Government. It has from natural forests cannot be sustained and the developed into two distinct components; industrial and industry will face severe and unavoidable resource smallholder-based (Figure 1.4). shortages in the near future. This situation is acknowledged by the logging industry. The anticipated Two companies, Kolombangara Forest Products Ltd demise of this sector has significant and potentially and Eagon Pacific Plantations Ltd, manage the com- severe implications for the national economy, mercial plantations resource of about 25 000 ha in SI. government revenue streams and rural employment. Both of these companies are based in Western Province where plantation conditions are favourable. The planta- Future natural forest wood flow projections are based tion resource is maturing and has limited expansion on the assumption that ‘re-entry’ logging will not occur opportunities due to a finite land-base. Main species (URS 2006). Premature re-entry can jeopardize the that are currently harvested are Eucalyptus deglupta forest’s ability to recovery and consequently affect and Gmelina arborea, with smaller amounts of teak future wood flow. Unfortunately this is already occur- (Tectona grandis), mahogany (Swietenia macrophylla) ring (Andrewartha, 2008) and an analysis of recent and native species (Campnosperma brevipetiolatum annual harvest plans submitted to the Ministry indicate and Terminalia brassii) that some 25% of these plans cover areas previously subject to logging (Baldwin, pers.com.) In addition to The smallholder plantations component currently com- the impact on future woodflows, this will increase the prises about 6000 ha of small blocks about 0.5 ha in proportion of smaller size logs (URS 2006). Whilst the size and is scattered across many islands and is sup- dynamics of growth and regeneration of natural forests ported by a national extension program. About 70% of are well understood, there appears to be a lack of in- this resource is teak. The component has the potential formation surrounding the costs and prices paid within to make a positive contribution to the Solomon Islands the logging industry. Whilst this is understandable for via an increased plantation estate, direct rural income an industry that operates in extremely remote areas, and employment in growing, harvesting and processing this lack of information and lack of transparency has of plantation timbers. Smallholder plantations are ex- created an industry that is characterised by rumour, pected to deliver significant incomes to landowners misinformation and mistrust. Limited knowledge of the from 2025 onwards provided high standards of man- logging value chain and the markets of Asia have led to agement are maintained and issues of logistics are ad- misconceptions and a range of unfulfilled expectations. dressed.

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2 Sources of Price Information for Solomon Islands Timbers

Transparency in price information along the logging Japan. Figure 2.2 provides up-to-date shipping rates for value chain helps communities assess the true worth of Handy size vessels (yellow line) and confirms the logging proposals. Price information assists potential tility in shipping rates buyers to evaluate and select Solomon Islands as a (http://www.dryships.com/index.cfm?get=report). It is source of tropical hardwood and this information as- expected that the shipping markets for smaller vessels sists those responsible for predicting and collecting (6000–12 000 dwt) commonly used for Solomon Island national tax revenues. Trade in tropical hardwood logs log trade will reflect a similar pattern of volatility how- faces challenges not shared with other commodities. ever this study was unable to locate accurate shipping Log shipments are not homogenous (like a shipment of rates for the Solomon Islands – China/Vietnam logging wheat or iron ore for example) and represent a hetero- trade for the 6 – 8000 tonne vessels normally used. geneous grouping of products (logs) of varying size Figure 2.1 also demonstrates the benefits (and risks) and quality which are used for different products, in- gained through long-term shipping hire. It is common fluencing potential prices paid. for those involved in the log trade to be charged the spot rates because long-term steady supplies of logs Factors influencing log prices can not be guaranteed. Contributing to vessel hire times and high shipping costs from the Solomon Islands are On the supply side, log prices are influenced by the slow loading rates of vessels (reportedly about 3 days) cost of extraction, the cost of infrastructure to facilitate in the Solomon Islands, up to 3 ports for loading, and harvesting and extraction and issues such as yield from slow unloading from these small vessels in China plus the forests, labour rates, social costs and capital and an estimated 7 days steaming time to market ports. In fuel costs. Andrewartha (2008) suggests that these do- late 2008, industry sources reported shipping costs for mestic costs will increase in the Solomon Islands as logs were about US$93/m3 from SI to China ports. more inaccessible and remote forests are logged and recoveries from re-entry logging are reduced and smaller diameter logs are exported. There are many factors on the market side which will influence Handysize (27,000 dwt) spot rates vs period rates the prices offered for logs. Sig- nificant among these is a reputa- 60000 tion for reliability, quality and consistency; a series of bad 50000 shipments can have long-lasting impacts on prices. Some other 40000 Spot rate factors influencing prices in- 1 year rate clude: 30000 3 year rate

Shipping 20000 The volatility of international shipping rates is demonstrated in 10000 Figure 2.1 which displays the daily hire rates between 2002 0

and 2008 for Handy size vessels 31/07/02 31/10/02 31/01/03 30/04/03 31/07/03 31/10/03 31/01/04 30/04/04 31/07/04 31/10/04 31/01/05 30/04/05 31/07/05 31/10/05 31/01/06 30/04/06 31/07/06 31/10/06 31/01/07 30/04/07 31/07/07 31/10/07 31/01/08 30/04/08 (27 000 dwt), commonly used for log export from Australia Figure 2.1 Daily hire rates for Handy size vessels 2002–2008. Spot rates (red), yearly and New Zealand to China and contract rates (blue), 3-year contact rates (green). Courtesy Stratus Shipping, Melbourne.

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Figure 2.2 Daily hire chart for Handy size vessels (yellow line). http://www.dryships.com/index.cfm?get=report

Figure 2.3 China’s log imports by country 2006–2008 (Source: International Woodmarkets 2009a)

Competition with other sources of logs coumea klaineana) and Sapele (Entandrophragma cyl- indricum). The main markets for logs from the Solomon Islands are in Asia and China is the largest single market (Fig- China is the world’s largest importer of logs and ure 1.3) with expanding interest in Vietnam. These sources its logs globally with Russia being by far the markets also source their logs from several other coun- dominant supplier. Over the past 3 years, Solomon tries with which Solomon Islands must compete. Islands has represented a small, but significant, part of Chinese log imports (Figure 2.3). The Chinese market is extremely price-sensitive and within this market, Solomon Islands logs face consid- Processing cycles and factory erable competition from West Africa, PNG and Malay- inventories sia. Among the better-known competing species from Africa are Iroko (Chlorophora excelsa), Okoume (Au- Processors of tropical hardwood logs synchronise their operations with the demands of the market place and

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this is reflected by cyclical demand patterns throughout been delayed to late 2009, the projected reduction in the year. Factories try to maintain their inventories of Russian log production and exports in combination raw materials to meet the needs of current and antici- with higher log export costs (due to the current 25% pated orders. High prices for logs can be negotiated tax with a minimum of Euro 15/m3) is increasingly when log inventories in processing factories are low putting pressure on global log markets. China, Japan, and anticipated demand for processed product is Scandinavia and the Baltics have already incurred ma- strong; however, prices soften when the inventories of jor negative fall-out as a result of the 25% log export factories are high or when demand for product slack- tax — to the point where new wood supply strategies ens. The cycles of log supply from the Solomons may have been rapidly implemented. Whilst Russia’s log not be attuned to the cycles of demand at processing exports are primarily temperate softwoods, changes of centres and this offers challenges to the sellers of logs. such magnitude will influence all log trade. Processers’ demands for logs to suit their Some key market reactions to Russia’s current 25% log business export tax and proposed 80% log export tax: Processers seek access to logs which are tailored to • The volume of Russian softwood log exports will best meet the needs of the business. Whilst there are plummet through to 2012 as a direct result of the obvious differences between species and grades of log export tax schedule. Supply is expected to logs, not all processors require large Grade 1 logs for steadily decrease to Russia’s seven largest soft- their business. The log needs for a rotary veneer busi- wood log export markets. ness are different to those for an outdoor furniture • Global log trade disruptions from Russia will cre- business or a flooring business and these companies ate new log export opportunities for major global will pay different amounts for the same log. In addi- softwood log exporters, especially in the key Asian tion, some processors have access to machinery and markets of China, Japan, and South Korea. technologies which allow them to make best economic • It is now expected that new capital investment in use of some log grades. Industry sources suggest that the Russian wood products industry will be de- logs from Solomon Islands are generally larger than layed or be minimal at best following the collapse those from PNG and command higher CIF prices in the of many smaller logging and wood product manu- Chinese and Vietnamese markets despite higher ship- facturing companies in 2008. ping costs. Fashions in colour for furniture and other International Wood Markets: wood products change and this influences market de- http://www.woodmarkets.com/Press%20Releases/09-01- mand and ultimately the prices paid for logs. 26%20FINAL%20Press%20Release %20for%20Full%20Russia%20Log%20Export%20Tax%20 International influences Rept1%20RT.pdf The Solomon Islands logging industry is influenced by Gabon bans harvest of four major timber species. larger issues shaping global trade in logs. The current Very slow market conditions continue in West Africa. economic crises is placing enormous pressures upon However, significantly, the government of Gabon indi- the international log trade. Timber traders continued to cated that from 1 January 2009, four major species of struggle at the beginning of 2009, with prices falling timber, afo, douka, moabi and ozigo, are no longer for many of the major species in tropical producer and permitted to be harvested. Producers will have three consumer countries. Some suppliers are overstocked months in which to dispose of all stocks of these spe- because of reduced demand from processors and trad- cies. The impact of this measure on market prices and ers are cutting prices where stocks are high. China’s the volume of annual harvest in Gabon has yet to be furniture exports also slowed in the fourth quarter of assessed. Moabi is a major species for the market in 2008 and Vietnam’s furniture industry is facing strong France, although French importers are currently over- financial challenges as European and North American stocked with moabi. Despite this, there may be a rush demand has slumped dramatically(ITTO, 2009b). to secure the limited stocks that remain in the pipeline. Restrictions on log exports from other producing coun- Although individually the volumes of each of the four tries change the demand for SI logs. Recent changes in species are not that significant, the ban will mean a Russian log exports (although primarily softwoods) noticeable reduction in the harvest volumes per hectare. and logging bans in West Africa are among recent in- This is expected to impact the viability of some con- ternational influences which may shape the Solomon cession areas. At this stage, there is no information as Islands export log industry. to whether or not concession holders will be able to increase annual allowable concession areas or harvest Russia’s increased log tariffs. While Russia’s move to volumes per hectare of other species to compensate for an 80% log export tax (or minimum Euro 50/m3) has the lower output (ITTO 2009a).

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Cancellation of logging in Democratic Republic of Congo. After a review of 156 logging deals in the De- Table 2.1 Chinese exports of wood products: 2007 vs 2008 mocratic Republic of Congo (DRC), the government (International Woodmarkets 2009b) has cancelled nearly 60% of timber contracts in the country’s rainforests, reported the BBC. The investiga- Volume Value (x000 m3) (USD millions) tions, backed by the World Bank, were conducted with Products the view to exposing corruption and enforcing envi- 2008 2007 Change 2008 2007 Change ronmental standards. The investigations concluded that (%) (%) only 65 of the existing deals were viable. The govern- Wooden doors 302700 337835 –10.4 542 557 –2.6 ment notified the relevant companies of the cancelled (tons) contracts and indicated new contracts would be issued Plywood 7177 8773 –18.2 3398 3577 –5.0 for 90,000 square kilometres of forest area (ITTO Fiberboard 2683 3256 –17.6 1,092 1,083 0.8 2009b). Particleboard 193 183 5.7 46 35 30.2 Reduced demand in response to the global economic crises. The global financial crisis and the slowing de- Table 2.2 Chinese log imports by country and value 2007 mand in international markets (especially the US mar- Vs 2008. (International Woodmarkets 2009b). ket) has created a slow down in Chinese wood products exports in 2008.This stress in the Chinese market will Volume (x000 m3) Value (USD millions) have an impact on demand for SI logs. 2008 figures Country 2008 2007 Change 2008 2007 Change show that international demand for Chinese wood (%) (%) products dipped markedly from 2007, with the excep- tion of particleboard (Table 2.1). China Customs re- Russia 18665 25396 –26.5 2560 2706 –5.4 ports that a total of 167 million pieces of wood PNG 2230 2341 –4.8 413 415 –0.5 furniture valued at USD 6.8 billion was exported in New Zea- 1909 1270 50.3 246 154 59.8 2008 year. This represented a 12.5% drop in volume, land but a 2.8% increase in value from 2007. (International Solomon 1159 1049 10.5 212 182 16.7 Woodmarkets 2009b) Islands Gabon 1077 1150 –6.4 415 396 4.9 China is one of largest raw materials importers of wood in the world and log and lumber imports have increased Malaysia 817 1331 –38.7 173 249 –30.8 rapidly since 1999 to feed China’s huge demand in its Myanmar 490 718 –31.7 178 138 29.0 domestic real estate industry, as well as its export mar- Australia 430 490 –12.3 50 54 –6.3 ket factories. However, 2008 has reversed this trend as Others 2794 3346 –16.5 935 1058 –11.6 China’s log import volume has decreased mainly from Total 29570 37091 –20.3 5182 5351 –3.1 lower wood products exports, as well as from higher- cost logs as a result of Russia’s rising log export tax. Nearly 29.6 million m³ of logs valued at about USD5.2 billion were imported into China in 2008, a downward diversity of species within a shipment increases. Uni- trend of 20.3% by volume and 3.1% by value from the formity in species and log grade lessens market risk year of 2007 (Table 2.2). The import volume and value and will offers negotiation benefits. Unfortunately, of hardwood logs dropped 20.5% and 6%, respectively; owing to the diversity and the relatively small size of 11 million m³ by volume and nearly USD2.8 billion in the Solomon Islands resource, it is challenging to main- value (International Woodmarkets 2009b). tain uniformity in log shipments without creating waste. The Solomon Islands is one of the few countries ex- porting tropical hardwood logs to experience an in- Influence of certification crease in export volume to China in 2008; increasing Forest certification is limited in the Solomon Islands from 1.05M m3 in 2007 to 1.16M m3 in 2008, an in- because the areas are relatively small and the certifica- crease of 10.5%. Recent informal reports from the tion costs are high. The only operation with FSC certi- Solomon Islands Forestry Association indicate that fication is Kolombangara Forest Products Limited Chinese trade in tropical logs from the Solomon Is- (KFPL). Based on information from industry inter- lands is becoming very tight in late 2008 and early views, and given the limited long-term future for log- 2009. ging in Solomon Islands native forests, there appeared Quality and uniformity to be little conviction that certification offers commer- cial benefits. Some markets (particularly the furniture It is more difficult to market a shipload of mixed spe- markets of Vietnam) need certified timber to meet cli- cies than a shipload of fewer species. Not all buyers are ent needs in Europe and North America. In such cases, keen to buy all species and marketing risks increase as certified logs can command a premium over non-

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certified logs. The magnitude of this premium is uncer- similar species in the Asia Pacific region, FOB prices tain and depends upon product demand and factory declared by exporters in the Solomon Islands, and inventories. Certification does, however, offer oppor- movements in the CIF price of logs declared in destina- tunities to growers and managers of small forests via tion countries adjusted for the cost of freight and insur- the FSC Group Certification processes. ance. Changes to the Determined Values may be made based on recommendations from the Commissioner of Sources of information on log Forests, who uses information collected from Solomon Islands export data and published data from sources prices such as the International Tropical Timber Organisation (ITTO), Japan Lumber Journal and Papua New Guinea Solomon Islands Government Forest Service More recently, changes have involved The importance of the logging industry to the economy joint review with the Central Bank of the Solomon Is- of Solomon Islands has been discussed in Chapter 1. In lands, the Ministry of Finance and the Forestry Divi- addition to the Ministry of Forestry, the Ministry of sion (URS 2006). Table 2.3 offers the current Finance, the Central Bank of the Solomon Islands and Determined Value schedule issued by the Ministry of the Customs Department all have a strong and obvious Finance and Treasury, 24 April 2008. This schedule interest in the log export sector. To protect the sover- offers a excellent initial resource for price information. eign interests of the people of the Solomon Islands and to ensure that the SIG can anticipate revenue streams The Determined Value schedule is not without its crit- from logging and to remove ambiguity, a Determined ics. Within the logging industry, there is resentment Value system has been developed. that the Determined Value Schedule is inflexible and Table 2.3 Current Determined Value Schedule in the Solomon The Determined Value system Islands. Legal Notice 32, Ministry of Finance and Treasury, The schedule of Determined Values (sometimes re- 24 April 2008 ferred to as Determined Prices) is used by the Solomon Islands Department of Customs and Excise to calculate Price (USD/m3) duty on exported native forest logs. The Solomon Is- Species Regular Small Super Low lands Government is not a native forest resource owner grade grade small grade itself, however the Government has the role of ensuring grade that exporters are paying export duty based on a fair Intsia bijuga (kwila) 126 115 109.50 market price for the exported logs. Vitex (vasa) 126 115 109.50 The Determined Value System has been in place since Palaquium (pencil cedar) 98.5 87.50 82 63.50 September 1998. Under this system, market prices Calophyllum 98.50 87.50 82 63.50 (‘Determined Values’) for certain species and grades of Pometia (taun, akwa) 98.50 87.50 82 63.50 log are periodically gazetted by the Controller of Cus- Planchonella 98.50 87.50 82 63.50 toms under the Customs and Excise Act. Duty on ex- Schizomeria (beabea) 87.50 76.50 71 58 ported logs is based on the Determined Values rather than the invoice amount (URS 2004). Dillenia 82 71 65.50 58 Gonystylus (ramin) 87.50 76.50 71 58 The system addresses the concerns expressed by the Terminalia brassii 87.50 76.50 71 58 Central Bank of the Solomon Islands that some logging Terminalia (except 82 65.5 65.5 58 companies may be engaged in transfer pricing and un- T. brassii) der reporting of log values (CBSI 2007). Terminalia calamansanai 76.50 65.5 60 58 In addition to setting the duty payable, this system has Canarium (gnali) 76.5 65.5 60 58 a number of advantages, including: Burkella 76.5 65.5 60 58 Celtis 76.5 65.5 60 58 • Providing current log prices and log price trends to companies and landowners. This information can Alstonia (milky pine) 76.5 65.5 60 58 be used by companies to negotiate log sales and by Dysoxyllum 76.5 65.5 60 58 landowners to ensure their logs are sold at rates Eugenia (water gum) 76.5 65.5 60 58 that give them equitable returns; and Endospermum 76.5 65.5 60 58 • It ensures the Forest Department tracks, and is Amoora 76.5 65.5 60 58 aware of, log prices and price movements. Campnospcrma 76.5 65.5 60 58 The Determined Values (Table 2.3) is set by the Comp- Maranthes 68 62 53.5 49.5 troller of Customs, usually on the basis of recommen- Mixed species 68 62 53.5 49.5 dations from the Commissioner of Forests who considers a number of factors, including log sales of Parinari 68 62 53.5 49.5

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does not accurately reflect the dynamics and risks as- crease in prices prompt the question as to whether De- sociated with the international trade in tropical hard- termined Values should be reduced in line with interna- woods, particularly the trade with China. Whilst tional trading dynamics. offering a thorough understanding of the parameters involved in the international trade of tropical hardwood There appears to be a strong congruence between the round logs (Battersby 2008), the Solomon Island log- Determined Value and the FOB prices quoted on ging industry argues that values assigned to parameters commercial invoices for export. Rarely do FOB prices within the formula used in establishing the Determined exceed the Determined Value. The Independent Re- Value are unrealistic. view of the Determined Value Schedules (URS 2006) noted this and observed that the charts show that there Specifically, they believe that the existing system con- has been little variation from the previous Determined fers an unrealistic agents commission (6% of CIF) and Values over the 29-month period for which the data does not account for volatile shipping rates using small were examined despite improved CIF values during the size vessels (c. 6 - 12 000 tonnes). Trade in tropical period. Figure 2.4 offers an example from the report hardwood logs, especially in China, faces challenges comparing FOB data for Grade 2 species with the De- which are not reflected in normal agent’s fees for other termined Value. Similar patterns existed with logs from commodities. A shipment of logs is not a uniform all other grades. commodity of, say, 12 000 tonnes but rather a shipment of 2000 individual items (logs), the price for all of which will be argued and negotiated at the final point of sale. Chinese log trade is characterised by arguments over payments against Letters of Credit, downgrade of log standards by buyers and insurance claims. Industry informants in Australia suggest that a realistic agent’s fee for the China trade in tropical hardwood logs is closer to 12% (than the 6% allowed in the Determined Value schedule) Spot rates for international shipping can change quickly from month to month (Figures 2.1 and 2.2) and ships may not arrive if they receive a better-paying cargo elsewhere. The Solomon Islands Forestry Association argues that the world markets for tropical hardwood logs are dy- namic and fast moving and each log shipment reflects this dynamism, whereas the process for the Determined Value schedule is slow. Recent reduced demand for hardwood logs in China and other markets and a de-

Figure 2.4 FOB price trends for regular grade Group 2 species (2003– 006) and relation with Determined Value (URS 2006)

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Economics and Marketing Division, Ministry of Forestry MoF Database. Within the Ministry of Forestry, the Economics and Marketing Division has responsibility for maintaining records relating to log prices and ex- ports. In 2001, the Ministry of Forestry developed a ‘Log Export Database’ to monitor the licensing and export of round logs from the Solomon Islands. Em- ployees of the Economics and Marketing Division op- erate the database. However, in 2006 it underwent modification and is still awaiting loading and changes to the new server in the MoF. It is used to capture criti- cal information from data provided by log exporters and to generate reports that are used by management and staff of the MoF and other government depart- Figure 2.5 Schematic representation of the log export data- ments. Information can also be extracted to report on base (Ministry of Forestry 2001) the market trends in any review of Determined Values. Since 2006 the database (see Figure 2.5) has not been in operation, but some processed data and the hard cop- ies are available upon request and approval from MoF (subject to respect for corporate confidentiality). It is expected that the database will become operational again by late March 2009, although it is uncertain how missed historical data will be treated. When functional, the Log Export Database will represent the most up-to- date source of information on FOB log prices. A com- ponent of this database is maintained by the Commer- cial Bank of the Solomon Islands (CBSI). In addition to the data available via the revamped log export database, the MoF maintains hard copies of all documents submitted during the export application process. Edited samples of these documents for both round logs and sawn timber exports for February 2008 are provided in Annex 5.

Solomon Islands Forest Management Project (SIFMP) Figure 2.6 Annual log export volumes and average prices (US$/m3), 1999–2007. Source: CBSI, Annual Report 2007 The Solomon Islands Forest Management Project (SIFMP) is a bilateral project supported by The Austra- lian Government’s AusAID and seeks to support the management of natural forests; growth of the forest estate through plantation development; revenue collec- tion (from log exports) by landowners and the Gov- ernment; and the capacity of the Forestry Division (FD) to effectively support and regulate this key sector of the Solomon’s economy (http://www.ap.urscorp.com/_business/prjinx.asp?BDY =57 ). Over many years, the SIFMP has produced a number of documents which are helpful for those inter- ested in log and timber sales. Among these are:

• Marketing Plantation Teak and Mahogany Grown in the Solomon Islands, 2003 • A Manual for Sellers Exporting Small Consign- ments of Logs or Sawn Timber, 2004 Figure 2.7 Quarterly log export volumes and average prices 3 rd • Independent Determined Price Review, 2004 (US$/ m ), 2005–2008. Source: CBSI, Quarterly Report, 3 Quarter 2008 • Solomon Islands Timbers, 2005

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• Review and Strategy Plan for Capacity Table 2.4 Documents available from CBSI and forest related informa- Building in the Small-Scale Sawmilling Sec- tion (available from http://www.cbsi.com.sb/index.php?id=8, unless tor of the Solomon Islands, 2005 stated)

• Review of Determined Prices, 2006 Document Relevant Information • Central Bank of the Solomon Islands (CBSI) Summary Report Monthly table: (Quarterly): o Volume (m³) Within the Central Bank of the Solomon Islands Round log export Value (US$ & SI$) approvals data¹ – o (CBSI) , the Foreign Exchange Department main- Average price (m³) tains a database of log prices and records for av- (specific author- o No. of applications received erage prices for species, volume and value ity) o • Quarterly (Figures 2.6 and 2.7). This database is a sub-set of AVAILABLE o Log export approvals by destina- that being used by the Ministry of Forestry. ON REQUEST tion Commercial invoices and customs documents are Log export approvals by province the primary source of information. The CBSI also o Quarterly Re- • Brief comments on trends in forest sec- relies upon the World Bank Commodities Review view² tor, including international prices (see below) for information on all commodities • Graph of volume and average price of prices and trends. logs (quarterly: 2005 – present) • Table of: Additional information from the CBSI related to 3 log and timber exports is outlined in Table 2 4. o Value and volume of exports (logs and sawn timber4) (SI$) 5 Solomon Islands Customs and Excise Division o International prices of logs (US$) The Customs and Excise Division collects log o Production by major commodity – (log production6) export data as the basis for collection of tax reve- • nues. This data is not published and is maintained Annual Review² Analysis of forestry sector including plantations at generic levels with no detail down to species • Graph of volume and average price of and log grade levels. However, Customs data logs (yearly: 1997 – present) represents the actual volumes and values of logs • Table of: exported and these data should enter the Log Ex- o Government revenue – log export port Database under ‘Final Invoices’. Figure 2.8 duty shows average monthly FOB log prices for 2008 Contribution of logs to GDP and is derived from unofficial Customs data o o Production by major commodity – (log production6 ) Average monthly price for SI logs (FOB), 2008

700 Monthly Eco- • Brief comments, including: nomic Bulletin Number of export applications and 600 o total volume 500 This is pre-shipment data approved by CBSI. Actual exports can be 400 obtained by the (customs) C25 form. ² Actual export figures from Cus-

300 toms and Excise Division and from commercial bank documents

Price (SI $) (pers.com. V. Nomae 4/2/09. ³Figures for volume cease in 2004 due to 200 change in data that CBSI receives. Although the volume for round log 100 data is available other elsewhere, CBSI does not have information about quantity of sawn timber after 2004. 4Sawn timber assumed to be 0 5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 7% of round logs. It is unclear how this derived Malaysain meranti, 6 Month sale price charged by importer From 1997 up, log export data is used Figure 2.8 . 2008 average monthly price for Solomon as there are no sources for production data. This figure is different to Islands logs (SI$/m3). Source: Unofficial data. Cus- actual volume exported toms and Excise Division. generous in allowing access to log export data to help Kolombangara Forest Products Limited understand the processes involved. (KPFL) KFPL deals in the markets for certified plantation and As a commercial company, the prices negotiated be- native forest timber; these are different markets to tween clients and KFPL remain confidential, but the those for the rest of the SI export log industry. KFPL company has been generous in supplying a number of logs are sought after by processors in Japan, China and projects and initiatives with edited export data. Exam- Vietnam who have commitments to clients to use legal ples include the 2003, URS report Marketing Planta- certified timber in their products. tion Teak and Mahogany Grown in the Solomon Islands. In the course of this study, KFPL was most

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International Tropical Timber prices. It appears to be a buyer’s market and companies Organisation (ITTO) in operation are facing very tough negotiations on price. (ITTO 2009). This obviously places pressure The ITTO is an intergovernmental organization pro- upon the prices of logs from the Solomon Islands (Fig- moting the conservation and sustainable management, ure 2.9). use and trade of tropical forest resources. Its members represent about 80% of the world’s tropical forests and The Solomon Islands Forestry 90% of the global tropical timber trade. ITTO develops Association (SFA) internationally agreed policy documents to promote sustainable forest management and forest conservation The Solomon Islands Forestry Association has 44 and assists tropical member countries to adapt such members representing 80% of the logging companies policies to local circumstances and to implement them in SI,, all of whom are incorporated companies in the in the field through projects. In addition, ITTO collects, Solomon Islands. The Association represents the indus- analyses and disseminates data on the production and try in negotiations with SIG and acts in the collective trade of tropical timber and funds a range of projects interests of its members. Member companies pay a membership fee based upon the volume of logs ex- and other action aimed at developing industries at both 3 community and industrial scales (see: ported of SI$1.00/ m /yr. Whilst most members are http://www.itto.or.jp ). reluctant to offer confidential corporate information regarding log prices, they can offer advice relating to One of the dissemination mediums used by ITTO the likely market demands and trends. Tropical Timber Market (TTM) Report, an output of the ITTO Market Information Service (MIS). This is For example, the main market for the Solomon Islands published in English every two weeks with the aim of is China and second is Vietnam which accepts lower improving transparency in the international tropical grade logs. There was reported to be a lack of trust timber market and is available at no cost following with the Indian market which has complicated interpre- registration. tation of conditions attached to Letters of Credit. ITTO supplies price information based upon data pro- Regarding market preferences, the Korean market, or vided by participating countries. In the current eco- example, likes Dillenia because of its red colour. The nomic climate, the most recent ITTO report indicates Chinese market appreciates Terminalia brassii but Ko- that the downturn in trade has begun to impact log rea does not.

Figure 2.9 Tropical Log FOB price Trends. ITTO, January 2009 SFA understands the dynamics of the declining re- lar to 1991. Some companies are using the current eco- source in the Solomon Islands and expects that after nomic crises to exit the SI industry. 2011 (when most accessible native forests will be logged), the industry will shrink to 3 companies – simi-

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The SFA recognises that the domestic markets are small and the markets of the SW Pacific (incl. NZ and The Global Timber website Australia) are also relatively small; added to this Aus- The Global Timber website tralia and NZ have very strict log import and quaran- (http://www.globaltimber.org.uk) offers a critical view tine procedures and this adds expense to business. of information and statistics on the global trade in wood-based products, especially that from Africa and China Customs East Asia. The information and charts provided are China, remains the major market for logs from the based on published statistics of declared imports and Solomon Islands and records from China Customs will estimates are made where data (occasionally poor) is help determine prices at which timber products from anomalous. Data for China is generally sourced from the Solomon Islands are being sold into China. These the General Administration of Customs of the People’s records are used in China as the basis for payment of Republic of China. import duties. Annex 3: Accessing China Customs Data for Log and Sawn Wood Imports from the Solo- Globaltimber.org maintains a report on trade in logs mon Islands (Annex 3, Katsigiris 2009) is designed to from Papua New Guinea & the Solomon Islands enable the reader to order data on log and sawn wood (http://www.globaltimber.org.uk/pngsi.htm). Table imports to China from the Solomon Islands. It outlines 2.10 offers data for the Solomon Islands and PNG both the options available and specific steps and costs available from this website and confirms the rapidly of obtaining such data. In addition to information on increasing levels of sales to China. Unfortunately, the the data options and steps to be taken to place an order figures do not show the steadily increasing trade in logs with China Customs, the Annex also provides data and with Vietnam. simple analysis as a ‘case study’ of an order of Chinese Table 2.5, also extracted from the Customs data. The case study covers logs and sawn www.globaltimber.org website, indicates a steady in- wood imports from the Solomon Islands into China in crease in average CIF prices from US$160/m3 in 2006 March 2008 and is based on data obtained from China to US$180/m3 in 2008. Customs in January 2009.

Figure 2.10 Historical levels of exports of Papua New Guinea & the Solomon Islands logs to Asia (www.globaltimber.org)

Table 2.5 Imports of logs from the Solomon Islands declared by China. Source (China): General Administration of Customs of the People’s Republic of China via www.globaltimber.org.

Year Measure Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 (average US$160/m3) Volume (‘000 m3) 46 51 49 95 61 36 94 53 72 96 50 70 Import value (US$ million) 7 8 7 15 9 6 15 8 12 16 8 14

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2007 (average US$170/m3) Volume (‘000 m3) 64 111 53 114 115 70 72 83 88 109 58 111 Import value (US$ million) 12 21 10 21 22 13 13 13 14 17 9 18 2008 (average to date US$180/m3) Volume (‘000 m3) 107 36 127 103 107 106 84 135 89 123 82 60 Import value (US$ million) 18 6 24 19 21 19 16 25 16 23 15 10

World Trade Atlas International Woodmarkets China Report Global Trade Information Services, Inc. (GTI) is a supplier of international merchandise trade data. Cor- International Wood Markets Group porations, governments, and associations use the GTI (http://www.woodmarkets.com) provides credible trade data systems to gain global trade information. market research and analysis in the form of a monthly GTI has developed the World Trade Atlas which en- newsletter and strategic market and product multi- ables access to official recorded export data using the client reports. One such report is the monthly China Harmonized System (HS) Schedule B Commodity Bulletin, available through subscription. Classification. The information in the World Trade In addition to offering broad market data provided in Atlas is generally supplied on a CD-ROM which con- Figure 2.3, Woodmarkets’ China Bulletin provides tains the statistics and data about most goods exported information directly from the timber markets in from each state to every country around the globe. Guangzhou (Table 2.6). The Central Bank of the Solomon Islands uses the Meranti log trade data in the World Trade Atlas as a The World Bank proxy to benchmark Solomon Island data collected The World Bank produces a monthly Commodity Mar- during the process of exporting logs. kets Review , a summary of global commodity prices, including logs and sawnwood. Whilst this offers an Specifically, the Atlas enables the user to: insight into broad global price trends it does not pro- vide data for a community which wants to know what • Identify export products at the two-, four-, or six- their logs might be worth in the market place. digit level from the Harmonized System (HS) Schedule B Commodity Classification. During the second half of 2008, non-energy commod- • Display monthly, year-to-date, or annual data for a ity prices plunged 38 percent, with most indices ending 3-year period. the year significantly lower than where they started. World Bank figures suggest that log and lumber prices • Use a grouping feature to view exports by national may have avoided this pattern, however market sources or international region. suggest that suppliers are reducing logging and limiting • Sort data by country, state, HS code, market share, supply in an attempt to maintain prices. or percent change. Figure 2.11 and Table 2.7 are extracted from the World • Examine total exports by value. Find air and vessel Bank’s Commodity Markets Review, January 2009 and exports by value and shipping weight. indicate a softening of prices for tropical hardwood • Determine the value of a specific product and logs. identify the countries to which the product is being exported. Malaysian Timber Industry Board (MTIB) • Find the existing market share of each product. • Compare one state’s trade with that of another on a Table 2.6 Prices for tropical hardwood logs from SE Asia, product or country basis. Guangzhou markets — East Coast, December 2008. (http://www.woodmarkets.com) • Identify new markets and evaluate existing ones by method of transportation. Species and size Price per cubic metre • Analyse growth trends in state export trade. (diameter) Range Average The World Trade Atlas is available through Global RMB RMB US$ Trade Information Services at: Meranti >60 cm 2200–2300 2250 329 http://www.gtis.com/english and costs an estimated Meranti 50–60 cm 1900- 2100 2000 292 US$3600 for an annual subscription Merbau (kwila) >100 cm 4500–5300 4900 716 Merbau (kwila) 80–99 cm 5400–5600 5500 804 Merbau (kwila) <79 cm 4400–5000 4700 687

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The Malaysian Timber Industry Board produces a monthly timber bulletin with up-to-date news on the Malaysian timber industry as well as excerpts of the world timber industry. This bulletin, Maskayu, features monthly export statistics, information on timber prices, wood utilisation and market analysis, and introduces personalities in the timber trade and industry profiles. Access to Maskayu is through subscription at about US$3.60 per month; http://www.mtib.gov.my .

Figure 2.11 Log and Lumber prices (US$/m3) Malaysia, 2003–2008. Source: World Bank; Commodity Markets Re- view, January 2009. (http://decpg.worldbank.org)

Table 2.7 Timber commodity price data (US$/m³). Source: World Bank; Commodity Markets Review, January 2009 (http://decpg.worldbank.org)

Annual averages Quarterly averages Monthly averages Commodity 2009 4Q 1Q 2Q 3Q 4Q Nov Dec Jan 2007 2008 (Jan) 2007 2008 2008 2008 2008 2008 2008 2008 LogsA, Cameroon 381 527 470 409 530 554 548 473 452 477 470 LogsB, Malaysia 268 292 330 275 293 282 278 316 316 327 330 SawnwoodC, Cameroon 760 958 698 838 1036 1052 974 770 757 734 698 SawnwoodD, Malaysia 806 889 818 802 860 935 900 859 872 845 818 ALogs (West African), sapele, high quality (loyal and marchand LM), FOB Douala, Cameroon: begin January 1996, LM 80 cm + BLogs (Malaysian), meranti, Sarawak, sale price charged by importer, Tokyo; prior to February 1993, average of Sabah and Sarawak weighted by Japanese import volumes CSawnwood (Cameroonian), sapele, width 6 inches or more, length 6 feet or more. FAS Cameroonian Ports DSawnwood (Malaysian), dark red seraya/meranti, select and better quality, average 7–8 inches; length average 12–14 feet; thickness 1–2 inches; kiln dry, c. & f. UK ports, with 5% agents commission; beginning 2005, includes premium ($20–$30) for products of certified sustainable forest

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3 Evaluation of Value-Adding Options

At present, value adding involves a small amount of Adding value to logs is an important strategy for land- furniture manufacture and dressed timber and is domi- owners and all Solomon Islanders to gain a greater nated by the production of rough sawn, ungraded, share of the benefits from their valuable forest re- green timber to the export and domestic markets. source. Domestic demand for sawn timber is expand- Sawmilling is just the beginning in terms of value add- ing. As the living conditions of modern Solomon ing. Further processing and other activities can add Islanders change there is an increasing requirement in further value but incur additional costs. Investors in urban areas for sawn timber. In rural areas, the sawn- value-adding enterprises must be convinced that if they timber needs for hospitals, schools and other infrastruc- follow the ‘value-adding’ path their net profit will go ture are expanding. The export opportunities for proc- up not down. essed wood products are potentially attractive. The capacity to add value begins on the forest and in- Value adding options vary for different species and for cludes: different grades of log within these species. Much of the export-focussed, value-adding in the Solomon Is- • Selection of trees lands utilises a small range of species and is dominated by 3 species; Rosewood, Kwila and Vasa whose export • Felling and maintenance of log quality as roundlogs is legally restricted. • Sawmilling To effectively add value across the value-chain, it is • Seasoning (air and kiln-drying) important to maintain good quality control so that the • Treatment with chemicals to protect wood from increased value is captured. For example, well sawn insects and fungi timber may degrade in value if not air-dried correctly • Downstream manufacture of furniture and dressed or if it is damaged by insects. timber • Grading (for structural and appearance grades). Tree selection • Effective marketing Selecting the right tree is an important first step in ef- fective value-adding and the size and form of the mer- Currently there is limited value-adding carried out in chantable bole will dictate the sawn recovery rate. SI. The most basic value added product, sawn timber, Ideally, the merchantable bole should be straight and comprises a very small proportion of the wood ex- have a minimum diameter of 60cm and be free of de- ported. Groves (2005) estimated that for 2001, 2003 fects such as spiral grain . Some defects can result in and 2004, sawn timber exports based on the estimated loss of sawn production and incur losses due to degrade log volumes from which the sawn timber was derived during seasoning. were only 1.5, 2.7 and 2% of total exports respectively. The figures for 2008 were unavailable, but the limited data available suggests that this would be less than Sawing 1.5%. Between 2001 and 2005, the average price for There are few functioning industrial scale sawmills in 3 export sawn timber increased from US$165/m to the Solomon Islands; the Goodwood and Omex mills in 3 US$381/ m (Groves 2005). There are obvious oppor- Honiara are two exceptions. A major challenge for the tunities to enhance export revenue from wood exports mills is the reliable shipment of logs from outer is- through value adding. Value-adding also confers op- lands. The larger mills, with their bandsaws, offer bet- portunities for import substitution. Ironically, the ter recoveries and dimensional reliability than portable Solomon Islands imports wooden furniture and prefab- mills. This reliability is reflected in smaller tolerances ricated wooden houses. and better prices paid for band-sawn timber.

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Portable mills Table 3.1 Notional costs for a Lucas Saw operation (Cour- There has been a recent proliferation of portable saw- tesy: Buni Milling and Reforestation, Noro). mills in the Solomon Islands and these now dominate sawn wood production. Item Cos/m3 (SI$) Labour (roading, strapping, stacking to 388 The need for portable sawmills has always existed, container etc) $20 a cube for cutting (8 especially in remote areas where no other sawmills are men). located and there are needs for timber. Whilst portable Food 132 sawmills offer opportunities for small communities in the Solomon Islands, they do not offer universal bene- Carry out lumber after sawing 100 fits. Groves (2009) acknowledged that; Fuel (Lucas Mill + chainsaws) 176 Landowner royalty 400 ….the question of portable sawmills has become one of Spare parts, servicing, maintenance 150 the ideological battlegrounds in the war of words sur- rounding rainforests and their utilisation. Risk (primarily theft of spare parts and 50 fuel) There has been rapid development of portable sawmills Truck transport (mostly fuel) 5 since the early 1990’s as a means of producing sawn Total 1401 timber, potentially increasing the value of the resource (~Aust$269) to the resource owners. Portable sawmills are also be- Capital costs for the operation (1 Lucas SI$500 000 lieved to allow low-impact harvesting and processing Mill, 3.5 ton truck, 1 ton truck, 3 chain- of trees, avoiding much of the environmental and eco- saws, block and chain etc) logical degradation associated with large-scale com- Costs for a Lucas Mill Aust$25 000 mercial logging. However, a recent estimate suggests that of the 7,000 portable sawmills purchased by peo- financial benefits to communities. A notional break- ple in Pacific countries for a total investment of at least $150 million, at best perhaps only 20% (less than 1,500 down of costs per cubic metre for a small portable saw mills) are working, not all to full capacity. There are no operation is provided in Table 3.1. reliable data on the production from portable mills, their profitability or their contribution to local or re- To be effective, portable sawmills require a package of gional economies (Groves 2006). Portable sawmillers support and operational services. In addition to training in SI require a licence to operate, for an annual fee of and resources for operations and maintenance of the SID 150 for an unlimited volume, but the Ministry of mill itself, training and guidance needs to be offered Forestry has great difficulty in enforcing this and the across the whole value chain: log protection, sawing industry is largely uncontrolled. patterns and dimensions, air-drying, transport to market and market needs. Without the entire package of train- Of the five basic types of portable sawmill used in the ing and support, portable mills do not fulfil expecta- Pacific, only two are commonly used in the Solomon tions to communities and are wasteful of money and Islands; chainsaw mills and single circular sawmills valuable wood resources. Portable sawmillers in SI (most commonly Lucas Mills) . In addition to this, un- often work in isolated locations and do not produce defined amounts of flitches and sawn timber are pro- enough rough sawn green timber to undertake season- duced through freehand use of chainsaws. ing for example. Until recently, all circular saws were banned in Fiji because of their wide kerf. In a report to Chainsaw mills are probably most appropriate to the CIFOR, Groves (2009) reports that: needs of many people in SI. They are the cheapest and most portable of any type of portable mill and fit in For countries critically short of investment funds, pur- well with the life styles of rural villages. Chainsaw chasing portable sawmills for commercial production as mills produce rough surfaces and a wide kerfs, produc- an alternative to large-scale logging and medium to large sawmills, may be a short cut to bankruptcy and a misallo- ing a lot of sawdust and requiring more energy to cut cation of scarce resources. through the wood. The final recovery of seasoned and dressed sawn timber (lumber) is less than for circular Despite assertions that portable sawmills are less envi- saws or band saws. ronmentally damaging than large-scale logging opera- tions, there is insufficient detailed knowledge on the In the course of this study, it was suggested that there structure of commercial rainforests, their regeneration were 500 Lucas Mills in the SI and 80% of these were and the effects of harvesting logs for these mills to as- operational. While single-circular portable sawmills are sert that they are environmentally friendly. There was relatively cheap, i.e. approximately US$ 5,000 to also a great wealth of anecdotal evidence offered dur- US$ 15,000 (Groves 2009), they are nonetheless a sig- ing the course of this study which suggests that a sig- nificant investment and require a business-like ap- nificant proportion of the logs sawn in portable mills proach and commensurate skill in their operation, maintenance and sale of products to offer potential

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were associated with adjacent commercial logging op- ing countries. Quarantine regulations in both Australia erations. and New Zealand, stipulate that all imported sawn ma- terial can only have one dimension at a ‘maximum’ There have been a number of reasons offered as to why (thickness) of only 200mm. This allows for penetration many portable sawmill enterprises have failed in the of methyl-bromide used in the fumigation process prior Solomon Islands, and some of these are: to export. • Unrealistic financial projections by proponents of Where sawn timber is managed by hand, the capacity the mills to man-handle timber to air-drying stacks and to load • Lack of maintenance and unload from boats, influences piece sizes for sawn timber. Mobile mill operators prefer to cut certain sizes • Lack of business acumen (and lengths) for ease of handling e.g. 50x100mm and • Lack of markets or access to markets wider, in lengths of 1.8m up to 4.2m. However, not all Groves (2009) points out: of these sizes are attractive in the market.

The very high failure rates and subsequent abandoning of portable sawmills would suggest that villagers cannot Seasoning make more money through portable sawmilling and Seasoning is the controlled drying of wood to a mois- should not, for this reason, be encouraged to attempt to ture content suitable for the conditions of use and the do so. purposes to which it will be put. Commercial operators The widespread use of portable mills and the associ- seek to season as fast as possible, at minimum cost, ated package of support and skills deserves active and consistent with the least possible degrade of the wood. transparent discussion. Well seasoned wood is more stable than green wood and commands a higher price. Sawing patterns and timber There are two basic levels of seasoning: air drying and dimensions kiln drying. Air seasoning involves drying by exposure to natural conditions and the final moisture content All mills seek to produce sawn timber of ideal stability, depends on the ambient conditions which are variable dimensions and grade for the market. Eddowes (Annex in SI, probably 12 - 21%. Kiln drying involves drying 4) offers a number of important considerations influ- in an enclosed chamber in which the temperature, rela- encing quality and costs in sawing operations and these tive humidity, and speed and direction of flow of circu- include: lating air is controlled. The final moisture content can be determined with sufficient precision to meet the Appropriate sawing profile. A quarter-sawn sawing needs of the client. strategy is often recommended depending on species and end product. This sawing pattern helps better qual- Sawn timber can distort if not handled with care in the ity drying and minimises such drying defects as cup early part of the drying process. To minimise degrade and twist which can be a common drying defect on during this period, sawn timber is stacked for drying back-sawn (horizontal) boards. with spacers (20mm thick) in between each row of boards to allow for air circulation. These timber drying Correct sawn (sizing) and saw allowances. Sawn stacks should be placed onto wooden bearers or bed material needs to be cut to sizes specified by the cus- logs and aligned to keep boards straight. Eddowes tomer. Generally, an allowance of +5mm on thickness, (Annex and 2005) offers practical advice for air-drying 5-10% on width of boards (10% over 150mm wide) sawn timber. and +50mm allowance on lengths of all sawn material. Logs should be cross-cut to the standard lengths re- Drying requirements vary for different species and di- quired plus 50mm allowance. e.g 2.4m standard length mensions and sawn timber brought into the container plus 50mm allowance (2.45m). ports of Honiara or Noro, are graded and properly sorted, by species, into their respective thickness. Pre- Cutting sizes for export. The cutting and export of liminary air-drying will vary according to the timber large-sized flitches is only acceptable for a limited species and the respective thickness e.g. from 30-60 number of timber species designated for specific end- days for 25mm material and from 3-6 months for use e.g Rosewood (300x200 m) for veneers through 50mm material. custom slicing. Generally large slabs are not attractive for the Australian and New Zealand markets as the Considerations for kiln drying importers will be required to incur additional costs (and waste) to re-saw slabs to meet market dimensions. Kiln drying is expensive but offers financial and mar- ket benefits. It is a disciplined undertaking and, if An important consideration in sawing to meet export poorly implemented, can result in timber degrade. Only markets, is the quarantine requirements of the import- one species and one thickness can be kiln-dried at a time; each species and each thickness having its own

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kiln-drying schedule. Some basic kiln-drying schedules gicide and an insecticide effective against wood- have been developed for most of the major timber spe- destroying agents. These borate salts act as a preventa- cies of the Solomon Islands. Some of these drying tive treatment against wood-destroying agents and are schedules can be found in Eddowes 2005 and a sum- applied on freshly-sawn timber (Eddowes 2005). mary of expected costs and operations in Annex 4. Timber treatment carries with it a responsibility for air- Potential costs and charges for export drying under cover to prevent treatment chemicals be- kiln-dried (KD) timber ing leached. Use of preservative treatments also carries a responsibility to minimise potential adverse environ- Kiln-drying has the potential to be very attractive for mental impacts. sawn wood traders. The average cost in Australia for the kiln-drying of air-dried hardwoods is around $140- Failure to protect logs and timber against borers and 180/ m³ including preparation in stickering/ de- fungi severely limits utilisation and restricts market stickering of packs and bundling after kiln-drying. On opportunities. There are no international buyers who top of this is the cost of transportation to and from the will accept rosewood riddled with pin-hole borers or yard of the sub-contract drying facility, which can cost Palaquium affected by blue-stain fungi. about $100/ m³ incurred in transport costs. A charge of Aust$150-200/m³ for reliable kiln-drying Grading sawn timber in the Solomon Islands would be attractive for potential Grading aims to ensure timber buyers get exactly what importers. Kiln-dried timber is a readily ‘saleable’ they specify and sellers get the best possible price for product and eliminates the cost of importers having to their sawn timber. The two major categories are ap- send their (imported) materials for sub-contract drying pearance and structural grades, according to the end upon importation, and at greater expense e.g., trans- use of the product: porting to and from a ‘sub-contract’ dryer, loading/ unloading plus cost of drying. • Appearance grades are determined from the visual features of the sawn timber, usually boards of Goodwood, in Honiara, has a large modern kiln-drying 35mm or less in thickness, eg flooring, panelling, facility which is chronically under-utilised. This may mouldings, window and door jambs, frames, re- be due in part to the inexperience of the company in 3 veals and sills. kiln operations and the large (95 m ) charge required • Structural grades are determined directly by a ma- for the kilns. chine stress grader or proof tester, or indirectly from visual features known to affect the strength Log protection and timber treat- and stiffness of sawn timber (Groves 2005). ment Grading rules for SI sawn timber were formulated by the Timber Control Unit Project in 1992, based largely To maintain the quality of sawn timber presented to on Australian Standards. VATA offers training on tim- local and export markets, it is necessary to protect the ber grading as part of its wider industry training pro- log and the sawn timber from insect and fungal damage grams. Unfortunately, there was little indication that from the time of felling, through the primary break- grading rules have been widely accepted and used by down processes and drying, until the timber reaches the industry who find them too complicated to use. This markets. offers uncertainty to buyers and places sellers at a dis- advantage in price negotiations. Groves (2005) stresses Prophylactic, spraying treatments, need to be consid- the need to overcome this unwillingness if SI is to de- ered where species are susceptible to attack and de- velop a thriving export market for sawn timber which grade from either pinhole borer (Ambrosia beetles) enjoys a reputation for consistent and reliable supply; and/or blue stain fungus. Timbers such as Rosewood consistent grading; compliance with requested quali- are highly susceptible to pinhole borer attack and sawn ties, sizes and lengths; supply of seasoned and/or boards with this defect are not accepted in the export treated timber and accurate labelling of consignments markets. Similarly, other timbers such as kauri pine and shipping documentation. and pencil cedar are susceptible to blue stain fungus and require immediate prophylactic treatment, with anti-fungal solution, as soon as the log has been felled, Issues in container transport and immediately upon the cutting of boards (Eddowes, Annex 4) Solomon Islands are fortunate to have two container ports, Noro and Honiara, which can service the export The sapwood of some seasoned hardwood species is of containerised sawn timber. Whilst offering reliable susceptible to lyctid borers and the Australian and New schedules to export markets, container shipment re- Zealand Quarantine and Inspection Services forbid the quires suppliers to ship their products from the outer entry of timbers with untreated lyctid-susceptible sap- islands to the ports and a commitment to meet shipping wood into Australia and New Zealand. deadlines. The easiest and most effective timber treatments are the Standard twenty foot containers are used for export of water-soluble inorganic borate salts that contain a fun- sawn timber and these can accommodate a consign-

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3 ment size of about 18 m . Generally, shipments are Furniture bundled before stacking in the container. Packing tim- ber into containers is a task which needs great care as There are a number of manufacturers of wooden furni- the consequences of timber falling while in transit ture in the SI. These must compete in price and quality mean additional unloading expenses at the destination. with imports from countries such as Vietnam and In- donesia which have very sophisticated wood furniture Shipments to Australia need to be fumigated using industries. methyl bromide and this is done to Australian stan- dards by Island Enterprises (a Honiara-based company) With a reliable supply of high quality cabinet wood and at a cost of about US$214 per container. If this is not a captive expatriate community and expanding need for done accurately, the consignee faces significant addi- furniture for urban growth, there is an opportunity for tional costs for quarantine procedures in Australia. value-adding in the SI to be expanded through a furni- ture industry. The paperwork for container export of sawn timber is complex and time-consuming. The services of experi- Manufacturers interviewed were open and enthusiastic enced agents are normally engaged. Considerable costs for new design concepts and recognised the need to use and losses of time can accrue if correct procedures are well-seasoned wood in their products, many of which not followed and paperwork maintained. will be exported to countries with low humidity. Ex- amples of locally-made furniture available in Honiara Table 3.2 (ex Eddowes, Annex 4), provides recent FOB are offered in Figure 3.1. One of the principle chal- prices for several SI species from the container ports of lenges experienced by manufacturers is well-trained the Solomon Islands. craftsmen who can offer high level finishing.

Table 3.2 Price information (Source: Eddowes, Annex 4)

Key species Trade name Timber sizes Grade Condition *fob price Comments (r/s) (AUD/m3)

Agathis macro- kauri pine 25,38 & 50 mm x100 mm & Select Air dry 600–900 Susceptible to blue stain. phylla wider (see Item 7-Market Intelligence) Possibly also 50x50, 100x100, 150x150 & 200x200 mm

Calophyllum spp. calophyllum 28, 38 & 50 mm x 100 mm & Select Air dry 500 Drying problems. Needs to be wider quarter-cut and well seasoned prior to shipment.

Campnosperma campnosperma Not marketed or established into brevipetiolatum markets except in round-log form. (see Item 7-Market Intelligence)

Dillenia spp., incl. dillenia Selected logs (with black, Select Green Very difficult to season. Needs D.alata (simpoh) pencil stripe) may be a possi- more research & marketing. Not bility for veneer flitches e.g. established or accepted in cur- 150-200x200 mm rent market.

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Table 3.2 (continued) Price information (Source: Eddowes, Annex 4)

Key species Trade name Timber sizes Grade Condition *fob price Comments (r/s) (AUD/m3)

Gmelina moluc- white beech 25,38 & 50 mm x 100 mm & wider Select Green- 700–800 (see Item 7-Market Intelli- cana (canoe Shipping gence) wood) dry

Intsia bijuga kwila 25x75 mm & 100 mm; 25, 38 & 50 Select Green 800–1200 In strong demand and in- mm x 150 & wider. 75 mm x 150 creasing. Prices also on mm, 175 & 200 mm; 50x 50, upward trend. 100x100, 125x125, 150x 150, 200x200 mm

Palaquium spp. pencil cedar 25, 38 & 50 mm x 150 mm & wider Select Air dry 550–650 Susceptible to blue stain (see Item 7 - Market Intel- ligence)

Paraserianthes white albizia Not marketed or sold into falcataria current markets. (see Item 7 - Market Intel- ligence)

Pometia pinnata akwa 25, 38 & 50 mm x 100 mm & wider. Select Air dry 500-600 Susceptible to pinhole (taun) Also, 100x100 mm borer and brittle heart (doze) in log. (see Item 7 - Market Intel- ligence)

Pterocarpus rosewood 25, 38 & 50 mm x 100 mm & wider. Select Green- 750–950 Highly susceptible to pin- indicus Also for veneer flitches e.g 150- Shipping hole borer (Ambrosia bee- 200x200 mm dry tle). (see Item 7 - Market Intel- ligence)

Terminalia bras- brown ter- Little or no aesthetic ap- sii minalia peal. Difficulty in drying. Better suited in log form for rotary veneer.

Vitex cofassus vasa 25x75 mm & wider. 75x150 mm & Select Green- 600–800 Would benefit greatly from vitex wider. Shipping further marketing and pro- 38&50 mmx150 mm & wider. dry motion. Takes a long time 100x100, 150x150 & 200x200 mm to dry. Footnote: *Denotes: Re. FOB price/m3 – Price information sourced and supplied by Asia Pacific Timber Consultants T/A Grokelo Pty Ltd. Prices based on the current, average FOB price for timbers being imported into Australia and New Zealand from the Solomon Islands and Papua New Guinea as at 31.12.08.

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Side board Species: Vitex Approx. size: 2800 x 800 mm (top) Retail price (US$): $651

Dining table Approx. size: 1200 x 2400 mm (top) Species: Rosewood Retail price (US$): $475

Bedside table Approx. size: 500 x 500 mm (top) Species: Vitex Retail price (US$): $88

Sunchair Approx. size: 800 x 600 mm (seat) Species: Vitex Retail price (US$): $109

Dresser Species: Vitex Approx. size: 1200 x 600 mm (top) Retail price (US$): $176

Very large dining table Species: Rosewood Approx. size: 3600 x 1400 mm (top) Retail price (US$): $746

Figure 3.1 Examples of locally-made furniture available in Honiara (Courtesy Tropical Quality Furniture, Honiara)

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Costs in export markets Value-adding opportunities for Once a container of sawn wood has left the Solomon kwila and teak Islands and arrived in Australia, there remain many Value-adding opportunities for all SI sawn timbers is significant costs before the wood is available from a enhanced through consistent and reliable supply; con- wholesaler. An incomplete summary of these costs is sistent grading; compliance with requested qualities, provided in Table 3.3. In addition to these costs, there sizes and lengths; supply of seasoned and/or treated timber and accurate labelling of consignments and are costs for additional seasoning, estimated at 3 3 shipping documentation. Opportunities for two species Aust$150/ m for air-drying and Aust$250/m for kiln- which are expected to be part of the long-term SI tim- drying. ber industry are discussed. Sub-standard operations in the Solomon Islands can Kwila (Intsia bijuga) is among the most popular sawn have serious cost repercussions in the importing coun- wood exports from the Solomon Islands. It can poten- tries, especially if quarantine checks and manual re- tially command high prices because of its properties of stacking are involved. durability, strength and colour. If the issues of supply and quality control are met, the main additional and Table 3.3 Summary of costs between FOB and Australian logical value-adding option for kwila is kiln-drying and wholesaler (Courtesy: Woodage, NSW) bundling into respective sizes (thickness) prior to ex- port. These packs/bundles can then be distributed to Item Cost (Aust$) end-users immediately upon receipt of container by importers. An important additional treatment is to en- Per 20’ con- Per m³ sure that ends of all boards have been heavily coated tainer (aver- with end-sealant to alleviate splitting and face check- age capacity ing. Eddowes (Annex 4) report that wholesalers would 18.5 m³) be willing to pay upwards of A$250/m3 extra for well- Freight from SI 1642 91.2 presented, graded, kiln-dried material in sized packs. Lift on/lift off 65 3.6 Additional value-adding options such as mouldings and manufacture of items such as T&G flooring are not Quarantine 65 3.6 considered feasible for the Solomon Islands at this Re- delivery 320 17.3 stage. Production of high quality flooring materials requires strict moisture content controls and high capi- tal investment to purchase and install quality moulding AQIS processing 37 2.1 machinery and end-matching equipment. The majority of Australian and New Zealand manufacturers prefer to Unpacking 365 20.3 manufacture and supply their own moulded products as Cartage (Syd – Mittagong) 525 29.2 there can be severe repercussions from the ultimate consumer, if items such as T&G flooring do not meet FCL booking fee 20 1.1 the required standard, quality of product and specified Fuel surcharge 147 8.2 moisture content. Professional fees 120 6.7 Notional costs and recovery rates through the value chain for kwila are offered in Table 3.4. Quarantine declaration fees 37.5 2.1 A collection of prevailing prices for kwila logs, sawn Quarantine fees 33 1.8 timber and mouldings in the international markets is CMR (cargo management 17.5 1.0 provided in Table 3.5. re-engineering) compliance Plantation teak (Tectona grandis). The global markets EDI (electronic data inter- 5 0.3 for plantation-grown teak are analysed in Chapter 4. change ) fee Given the relatively small size of the teak logs avail- Brokerage 15 0.8 able in the SI, the main options for export are either as small roundlogs or as squared logs in containers. The Tailgate check (incurred 176.5 9.8 Indian market which represents 70% of the global mar- 50% of time) ket for teak market is understood to accept squared logs down to dimensions of 100x100 mm. Well-graded Subtotal 3590.50 198.99 squares almost eliminate the sapwood content of the (+ 10 % GST) 359.05 19.90 log and allow for additional volume to be placed into containers thus reducing the freight cost per unit of wood. Challenges facing fast-grown, short rotation plantation- grown teak include knots and a wide sapwood band. The Solomon Islands is not in a position to produce sawn material to the exacting standards required by traders in this particular species.

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Table 3.4 Selected notional costs for kwila (US$) and recoveries in the value chain

Product/volume (m3) Roundlog Rough sawn timber – Export sawn green timber – FOB Kiln dried, finished timber - merchants door 1.62 m³ retail in Australia 6 m³ 1.8 m³ 1.38 m³

Residue 0% 70% 10% 15% Price (US$/m³/round log) 126 (FOB) 63 83 372 Price (US$/m³) 126¹ 380 ³ $6506 223412 Notional costs (US$/m³) Harvesting Trans-island shipping 4 100 Re- sawing, docking & $50 Freight and as- 250 13 Haulage PRODUCTION COSTS5 partial air drying, grad- sociated costs ing, loading etc 7 Roading Fuel 9 Fumigation- Kiln drying 14 250 Logging company 75.60 Oil 1 8 profit Australia 214 Spare parts 6 Processing 15 400 NZ9 0 Food 4 Other10 104 Equipments 14 Container (to and from 65 License 3 11 Government tax 31.5 port) Marketing 16 2.5 Replacement 14

Loans 14 18.9 Overheads 17– 100 Labour 28 Royalties (licensee) labour, rent, Casuals 33 power etc. Loading 1 Royalties 71

39 Profit

Total costs 126² 220 115 - 379 1077.5

¹SIG 2008. ² See introduction for (60:25:15 breakdown of revenue from determined value). ³ Average price from timber merchants. 4 VATA, Silent world Logistic 5Estimated costs of a village sawmilling operation (Natural Resource Development Fund). 6 Average price (FOB) kwila ( MoF, unofficial data, Feb. 2008) NOTE: Ranges from 234 to 1100 FOB. 7 Pers. comm. M. Scott & P. Eddowes (2008). 8 Island Enterprise (per container) 9 Pers. comm. M. Scott (2008) (SI fumigation is not accepted in NZ) 10 TIMOL, for countries other than Aust. & NZ (per container) 11 VETE 12 Pers. comm. P. Mussett (2008) 150 × 50 mm, finished four sides 13 Pers. comm. P. Mussett (2008) sub-contracted: SI  NSW, Aust. 14 Pers. comm. P. Mussett (2008) Sub- contracted in NSW. 15 Pers. comm. M. Scott, P. Eddowes (2008). 16 & 17 Pers. comm. M. Scott (2008)

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Table 3.5 International prices for logs and sawn timber of kwila

Price (US $/m³) Place Product Source Date 687 Guangzhou (China imported log prices in Timber Mar- Round Log ( < 79cm) International Wood Markets 1/2009 kets) Group 716 Guangzhou (China imported log prices in Timber Mar- Round Log (> 100cm) International Wood Markets 1/2009 kets) Group 105 FOB, Solomon Islands Round Log (> 600mm x 5m) URS 2003

329 Guangzhou (China imported log prices in Timber Mar- Round Log (>60 cm) International Wood Markets 1/2009 kets) Group 292 Guangzhou (China imported log prices in Timber Mar- Round Log (50-60cm) International Wood Markets 1/2009 kets) Group 644- 776 Guangzhou City Imported timber market Round log (6m, 60cm) ITTO 1/2009 804 Guangzhou (China imported log prices in Timber Mar- Round Log (80- 99cm) International Wood Markets 1/2009 kets) Group 334-369 Peninsular Malaysia (FOB) Round Log (Sawlog Quality) ITTO 1/2009 100, 90, 81 FOB Solomon Islands Round log, (>600mm, 500 -600mm, SI Government Determined 12/2003 <500mm respectively) Value 134, 121, 109, FOB Solomons Islands Round log, (>600mm, 500 -600mm, SI Government Determined 12/2006 <500mm respectively) Value 115, 105, 100 FOB Solomons Islands Round log, (>600mm, 500 -600mm, SI Government Determined 6/2007 <500mm respectively) Value 126, 115, 109.5 FOB Solomons Islands Round log, (>600mm, 500 -600mm, SI Government Determined 5/2008 <500mm respectively) Value 160 Mill gate Hoinara Roundlog OMEX 12/2008

544-587 FOB, Noro. SI Sawn Timber Harry Jas 12/2008

410 FOB, Honiara (to the Gold Coast) Sawn Timber MoF 12/2008

468 FOB, Hoinara (to the Philippines) Sawn Timber MoF 11/2008

800 FOB, Honiara (to Auckland) Sawn Timber MoF 6/2008

580 FOB, Hoinara (to Brisbane) Sawn Timber MoF 5/2008

897 FOB, Honiara (to Malaysia) Sawn Timber MoF 4/2008

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Price (US $/m³) Place Product Source Date 468 FOB, Honiara (to Hong Kong) Sawn Timber MoF 3/2008

400 FOB, Hoinara (to Shanghai) Sawn Timber MoF 2/2007

234 FOB, Hoinara (to Auckland) Sawn Timber MoF 2/2007

400 FOB, Hoinara (to Shanghai) Sawn Timber MoF 2/2007

351 FOB, Honiara (to New Caledonia) TT Sawn Timber MoF 2/2007

429 FOB, Honiara (to New Malaysia) Sawn Timber MoF 2/2007

550 FOB, Honiara (to Auckland) Sawn Timber MoF 2/2007

400-450 Mill door Sawn timber (RS with chainsaw Top Timber 2/2008 free hand) 480 Mill Door Sawn Timber (Community timber VETE 2008 labelled/certified) 546 Mill Door Sawn Timber (Eco timber la- VETE 2008 belled/certified) 426 Mill Door Sawn Timber (Eco timber la- VETE 1/2007 belled/certified) 756 FOB, Hoinara Sawn Timber Rough Sawn Timol 1/2009

882 FOB, Honiara Sawn Timber Rough Sawn Timol 1/2009 (8 x8) 1100 FOB, Hoinara Sawn Timber Rough Sawn Timol 1/2009

1238 Retail, Mittagong Sawn Timber Rough Sawn ( kiln Woodage 1/2009 dried) 1010 Retail, Mittagong Sawn Timber Rough Sawn (rough Woodage 1/2009 stack) 1100 Retail, Mittagong Sawn Timber Rough Sawn (rough Woodage 1/2009 stack, air dried) 1848 - 2773 Retail, Mittagong Sawn Timber Sawn (6 X 2 kiln Woodage 1/2009 dried, door jam or finished four sides) 617 FOB, Hoinara Sawntimber, Roughsawn Woodage 1/2009

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Price (US $/m³) Place Product Source Date 1169 Retail, Honiara Sawntimber/second grade decking Harry Jas 12/2008

497- 549 Malaysia (domestic)( Retail/wholesale?) Sawnwood ITTO 1/2009 1130 FOB (Rotterdam) Sawnwood Kiln Dried ITTO 1/2009

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Markets and Prices for Plantation-Grown 4 Teak (Tectona grandis)

Plantation teak and teak in the India remains the world’s largest market for teak wood (Somaiya 2005; Padmanabha 2006) although substan- Solomon Islands tial demand for teak exists in servicing the large teak Teak plantations have been established around the world processing industries of China and Vietnam which are to complement dwindling timber supply from natural for- largely based on imported logs and Thailand which has to ests. The total area of teak plantations worldwide is in the supplement its own domestic supply. Most of this proc- order of 2.2 million hectares. Close to 95% of this planta- essed product is exported to Europe and North America as tion area is in tropical Asia - mainly in India (around finished consumer items such as furniture or as sawn timber 980,000 hectares) and Indonesia (680,000 hectares), as destined for decorative uses, boat building and outdoor well as Thailand, Myanmar and Sri Lanka. The large decking. majority of the world’s teak plantations have been estab- lished under government planting programs, and the quality In Thailand, harvesting teak from natural forests has of these teak stands varies considerably. Solomon Islands been banned since 1989 and in Indonesia, which has teak resource is well located to supply Asian markets substantial teak plantations, there is an export ban on with teak timber. teak logs. India banned teak harvesting in natural for- ests in 1982 and in 1997 the Supreme Court of India Teak was first planted on a large scale in Solomon Isl- ordered further restrictions on the felling of timber of ands in 1984 and there are now an estimated 4500 hec- any kind in the natural forests of India. tares of planted teak across the Islands. Kolombangara In the early 1980’s the total size of the teak market in Forest Products Limited (KFPL) is managing its 650 ha 3 commercial plantation teak stands and government India was 7.5 million m per year. All teak logs now consumed in India are now imported with 2.5 million plantings in the Shortlands (248 ha) and Viru (100 ha) 3 have also been established and managed. Much of this m of teak log imported in 2005 (Padmanabha 2006). teak resource was established between 1980 and 1989. Teak of natural forest origin is imported from Myan- mar, however approximately 60% of total teak imports In recent years, teak has become the primary species to India are from plantations in countries in West Af- planted by villagers and communities often in small rica, and Central and South America. Much of this is plots among crops and natural forest and this has been young plantation teak logs ranging in age from 6 to 15 promoted by Government extension services. Since years old. Timber coming from thinning operations has 2003, an estimated 3500 ha of teak has been estab- flooded Indian markets and has adversely affected the lished in many smallholdings of an average 0.5 ha in prices (Somaiya 2005). There are fears within the teak size. Smallholders established approximately 2000 ha industry that supplies of teak logs from Africa will be of planted teak in 2003 and 1400 ha in subsequent constrained within 5 years. years (URS 2006). For Solomon Islands, the most significant export mar- kets are in India, China, Vietnam, Australia and New International teak markets Zealand. There is also strong demand for teak in Europe. The physical and aesthetic qualities of teak have given However, most European buyers import large volumes of it a worldwide reputation as a premium timber. It is teak products manufactured in Asia, particularly in Thailand, highly sought after for shipbuilding and for the manu- China and Vietnam. facture of both interior and exterior furniture. With 3 Given that Thailand has significant domestic resources current total global production of around 3 million m of plantation teak and can access resources from per year, teak occupies a small position in terms of the neighbouring Laos and Indonesia has substantial re- total volume of world timber production, yet it is rec- sources of high quality plantation teak, the most prom- ognized as a high-value hardwood timber in global ising market for Solomon Islands’ teak will appear to timber markets. It enjoys special status and a sustained be India followed by the furniture manufacturing cen- strength in the market place. tres in China and Vietnam. There will be occasional opportunities for export to boat-building industries in New Zealand and Australia for high quality large size logs with good wood features.

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International prices for plantation Within the plantation teak component of the market, there are again some distinctions with higher prices teak being paid for large, long rotation (>50 years), slow Suppliers in the world markets for plantation teak be- grown teak of Java, West Africa and elsewhere. Small lieve that there is only a small risk of teak prices drop- size logs from fast grown plantations on 20 year rota- ping over the next 30 years because of the high demand tions or plantation thinings occupy a different (and and the long rotation period (Precious Woods 2005). cheaper) market niche. The importance of certification in the global market- place is also increasing and, although certain traditional When examining market prices it is important to dis- teak markets are not yet too concerned with this, many tinguish between the types of logs being sold as the teak producers will seek to meet the various criteria of price structures are different. The market price for a 30 sustainable forestry management and certification un- cm top log from a tree grown on a 70 year rotation will der credible schemes, on order to ensure the long-term be different to that for a 15 year old 30cm log from a viability of their ventures (Hardwoodmarkets 2004). thinning program. These differences are reflected in the variety of prices offered in Table 4.1 (Perez 2008) Teak wood prices are presently determined based on where investment companies use market prices and visual assessment and case-to-case basis; there are no trends for native teak to support economic arguments systematic or consistent grading rules with correspond- for investment in short-rotation plantation teak. ing price values. However, some quality and size re- quirements such as age (related to wood quality) and In addition to these differences are the markets for log diameter (relative to size and yield) are being stan- squared logs. This applies mostly to small sized logs dardized. Average teak wood prices for different log which are often sold as ‘squared logs’ where most of quality and size were defined using the available in- the sapwood has been removed. This offers value to the formation for Costa Rican teak wood (Figure 4.1). The buyer and facilitates easy loading and transport by con- parameters for quality were log shape, defects such as tainer. pith eccentricity, knots and sapwood content (Moya Table 4.1 provides a summary of teak wood prices and Perez 2008). Within the plantation teak markets, publicly announced in the internet by reforestation there is a fundamental distinction between native teak companies. Some of these prices are optimistic and are and plantation teak with higher prices being paid for related to their plantation marketing programs. teak from natural forests. Only Myanmar offers com- mercial quantities of natural teak to the international market.

Figure 4.1 Estimated average prices for plantation teak wood in relation to (a) age and (b) log diameter (Moya and Perez 2008)

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Table 4.1 Sources of Web-based information on teak prices in Central America (Perez 2008)

Source Information Price (US$/m3) Observations Tropical Plantations Ltd. USA FOB price for teak logs 1260 Based on average pricing www.tropicalplantations.net from ITTO, and USA retail prices Inversiones el Rosario FOB price for teak logs of 12-year-old: 260 (local) ‘The United States Wood (INROSA). Costa Rica. different ages 18-year-old: 919 (export) Association informs that teak www.natureinvest.net has had an increase of 225% 20-year-old: 1131 (export) in price from 1988 to 1992.’ 25-year-old: 1403 (export) ‘The wood for construction that was sold for US$ 1311- 1967 per m3 is now sold for US$4370 per m3.’ Tropical American Tree Farms. Value per tree 7-year-old: 73 No further information Costa Rica. 10-year-old: 176 www.tropicalhardwoods.com 13-year-old: 755 17-year-old: 2165 21-year-old: 6900 Global Green Services. Costa Report of international teak Year 1990: 450 Consider that the basis of Rica. prices Year 1994: 650 calculation includes conserva- www.globalgreenservices.com tive future teak prices Year 1995: 700 Year 1996: 800 Kauai Tropical Timbers. Kauai, Value per tree 8-year-old: 145 See further description in the USA. www.kauaitimbers.com 12-year-old: 792 body text below. 16-year-old: 2724 20-year-old: 6069 Friendly Forest Products. USA. Current teak lumber inven- Clear: US$ 7.0 per BF Character grade: sound knots, www.exotichardwood.com tory. FOB Miami (US$3059 per m3) minimal sap and possibly Clear one face: US$ 6.0 per some pith. BF (US$ 2622 per m3) Character grade: US$4.0 (US$ 1748 per m3) Myanmar Inter Safe Co. Myan- Diversity of products, from For teak squares, for example, Teak is difficult to obtain in mar. squares to boards and decks prices vary from US$ 4190 Myanmar as it is strongly www.forest-treasure.com and of different grading or per ton of 50 ft3 (US$ 9744 controlled by the State, who quality per m3) to US$ 3100 per ton sells it by auctioning and re- of 50 ft3 (US$ 7209 per m3), sellers increase the price con- this for SELECTED siderably. Prices correspond SPECIAL TEAK. Common to those registered in the or ‘market’ teak show prices Myanmar of less than half of those of Timber Enterprise (MTE). selected teak MTE is the sole and major government- owned enter- prise in the timber business Panacea Growth Limited. Belize Market price for teakwood US$ 830 (although stated that These prices are used in the www.panaceagrowth.com (no specifications) as of today it has risen to financial analysis of the US$1900). growth scenarios. Prime Forestry Panama. Panama Growth scenarios with In- 4-year-old: 52 Prices correspond to mer- www.primeforestry.com comes and log prices 7-year-old: 160 chantable volume in logs. Different profit scenarios are 10-year-old: 210 presented with 0%, 3%, and 14-year-old: 340 6% yearly teak price incre- 20-year-old: 525 ments.

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In general terms, Padmanabha (2006) offered the fol- • US$450per m3 for 14 year old teak logs of 24cm lowing guidelines for FOB prices for plantation teak diameter (at mid-log length) and 8 metres total log logs: length); and 3 • US$169 per m3 for 6 year old teak poles of 13cm • A$750 per m for 18 year old teak logs of 31cm diameter (at mid-log length) and 8 metres total diameter (at mid-log length) and 8 metres total log pole length; length. • US$270 per m3 for 10 year old teak logs of 18cm A summary of global prices for teak from several diameter (at mid-log length) and 8 metres total log sources and studies is provided in Table 4.2 (Salwood length; Asia Pacific, 2009).

Table 4.2 Prices of teak (Salwood Asia Pacific, 2009).

Price (per m3) Source and commodity Log specifications Comments Local US$ ITTO Market Reports (2007) http://www.itto.or.jp Indonesia <20 cm dia. 1.5M 166 Log yard price. Lower quality less +/- $33–55 20–30 cm dia. 2.0M 221 Log yard price. Lower quality less +/- $33–55 >30 cm dia 3.5M 387 Log yard price. Lower quality less +/- $33–55 Costa Rica 11–13 cm dia 155 Certified logs + 20% 13–16 cm dia 175 ‘ 16–22 cm dia 190 ‘ 22–25 cm dia 229 ‘ 25–29 cm dia 250 ‘ 29–32 cm dia 277 ‘ 32–35 cm dia 303 ‘ > 35 cm dia 320 ‘ Brasil <12 cm dia 10 Guetamala >16 cm sed 240 Logs FOB (Indian marlet) Myanmar US$75/ft3 2648 Best quality sawn lumber US$63/ft3 2224 #2 Grade sawn lumber India (Native forest) Poles 4500 113 At district forest office Logs 26 000 653 ‘ India (Plantations) Poles 2600 65 ‘ Logs 20 000 502 ‘ India Study (Midgley et al. 2007a) Mumbai Logs ex PNG 240 CIF India (US$145 FOB Pt Moresby) – the same for all small plantation logs 455 (FOB) CIF US$550 ‘large’ plantn logs Kandla Logs ex Ghana (includ- 400–600 CIF. ing squares) Ex Ivory Coast (only 600–700 CIF. Good grain and colour. Generally round logs – mostly large size large Ex Togo(small 350–400 CIF squares) Ex Ecuador 300–350 CIF (small roundwood) Indonesia ACIAR Study (Midgley et al. 2007b)

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Price (per m3) Source and commodity Log specifications Comments Local US$ Muna (on farm) A1: <20 cm sed Rp1.2M 132 A2: 22–28 cm sed Rp1.8M 198 A3: >30 cm sed Rp2.2 243 Muna (certified) 1.5M 165 Squared logs, farm gate 5.3M 585 Squared logs, FOB Kendari Muna (non-certified) 500– 55–77 Squared logs, farm gate 700000 1.5M 165 Squared logs, FOB Kendari Kendari Average for all sizes 653 FOB (US$ /tonne). (squared logs) Jepara A1: 16–19 cm 2M 220 Round logs delivered to factory A2: 22–28 cm 3.5M 386 A3: >30 cm 6M 662 Perum Perhutani Furni- A3 logs average for all 4.5M 496 ture, Cepu log grades. A3 Rough-sawn lum- 3800 Average ber

A1/A2 Rough-sawn lumber 3200 Average Cepu – Private furniture A3 squared logs (ex 3.2–4.0 353–442 manufacturers Java). A3 squared logs ex 4.2–4.7 464–519 Muna Laos, Luang Prabang Study (Midgley et al. 2006) Luang Prabang 16 cm sed. 50 (On-farm, standing trees) 20 cm 70 30 cm 100 35 cm 150 Vientiane (squared logs 10 x 10 cm 184 ex Luang Prabang) 20 x 10 cm 263 10 x 15 cm 316 20 x 15 cm 368 20 x 20 cm 368 Solomon Islands (SIFMP, October 2007) >35 cm sed Roundlogs 480 in containers. FSC certified 15–34 cm sed Round- 280 logs in containers. FSC certified 15–30 cm sed round- US$230 Assume market is India logs in 100 m3 lots breakbulk FOB. 17–20 years old 30cm+ sed roundlogs US$450 Assume market is India in 100 m3 lots break- bulk FOB. 17–20 years old Mixed sized roundlogs US$500 Container shipments to NZ (2 contain- (12–30 years old) FOB ers) in containers AsiaTimber.net (July 2008) Ecuador Rough squared logs US$185 and

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Price (per m3) Source and commodity Log specifications Comments Local US$ FOB Guayaquil up Ghana Plantation logs – vari- US$290 ous sizes. FOB Costa Rica Plantation logs FOB US$350 Caldera, Costa Rica. Sed 16–32, length 2.2– 2.3 m

In Lao PDR, the main markets for plantation teak are In India prices for plantation teak depends upon size those in neighbouring Thailand. Logs are converted to and colour with dealers favouring teak imported from squared logs close to the plantations and then shipped the Ivory Coast because of good grain, colour and large in trucks or containers to processing factories in Thai- size. In 2007, indicative teak prices in Kandla (round land (Midgley et al. 2006). The prices offered in the logs, CIF, Kandla) were (Midgley et al, 2007a). warehouse are presented in Table 4.3. Ghana US$400–600/m3. (including squares) Table 4.3 Delivered mill door prices for 2 metre squared logs Ivory Coast US$600–700/ m3. (only round logs – in Vientiane (for export to Thailand: Midgley et al. 2006) mostly large) Togo US$350–400/ m3 (small squares) 3 3 Squared log profile Baht/ m US$/ m Ecuador US$300–350/ m3 (small roundwood) 10 x 10 cm 7000 184 20 x 10 cm 10000 263 In Solomon Islands, teak grown on average sites for 15 10 x 15 cm 12000 316 years can be expected to produce sawlogs with small 20 x 15 cm 14000 368 end diameters of about 200 mm. Based on the refer- ences above, the average FOB price for plantation teak 20 x 20 cm 14000 368 of this diameter would be about USD150-200/m3. Us- ing the assumptions from URS (2003), in adopting a 3 Table 4.4 2003 price schedule based on sales of plantation conservative USD180/m , and subtracting an indicative 3 teak logs from Solomon Islands to Vietnam, 2003 (URS USD40/m for transport to port and loading, the esti- 2003) mated price to growers is USD140/m3 .Given that de- mand for teak logs remains strong and supply is likely Log size Price Price point to remain limited, this price can be expected to remain 3 (sed cm) (US$/m ) steady or increase over the medium to long-term. 15-19 120 Loaded in containers, wharfside Despite the promise of good prices for plantation- 15-19 150 FOB bulk log load grown teak, growers in the Solomon Islands face sig- 20-24 150 Loaded in containers, wharfside nificant challenges with the logistics of assembling an 25-29 210 Loaded in containers, wharfside economically viable shipment from many small, geo- 30-34 250 Loaded in containers, wharfside graphically scattered smallholdings. Many of the is- 35-39 280 Loaded in containers, wharfside sues facing effective marketing of Flueggea outlined in 40-44 330 Loaded in containers, wharfside Chapter 5 apply to teak. 45+ 350 Loaded in containers, wharfside

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Table 4.5 Examples of teak prices from company interviews in Central America 2002–2003 (extracts from Perez 2008)

No Price Country Buyer/Seller Age Description Observations Reference (US$/m3) (yr) 1 42 El Sal- Seller: Private owner 9 Logs of vary- Trees sold in the plan- 2003. Per- vador ing lengths tation. Dbh 10–15 cm sonal inter- and total heights of view. 15m 2 250–500 Costa Seller: Reforestaciones Tecatica 12 - Squares and Price at Costa Rican 2003. Per- Rica Internacional S. A. Email: 18 logs port sonal inter- [email protected] view 3 450 Costa Seller: Private Owner 22 Logs Logs loaded on trucks 2003. Per- Rica in the plantation sonal inter- view 4 300 Costa Buyer: Spanish Royal Teak. 20 Logs Logs from unmanaged 2002. Per- Rica Email: [email protected] plantations sonal visit to company 5 460 Costa Buyer: Diamond Teak. 20 Logs Min. log diameter 15– 2002. Per- Rica www.diamondteak.com 20 cm sed depending sonal visit to on log and wood qual- company ity 6 1200 Costa Buyer: Cabo Rico >15 Parquet Product free of knots 2002. Per- Rica www.caborico.com and sapwood sonal visit to company 7 590 Costa Seller: Aserradero Del Rio <15 Processed Heartwood only. Used 2002. Internet Rica Daniel wood, any for fingerjointing document via dimensions ITTO 8 66–200 Costa Seller: Confidential 5 - Squared logs Min dimension 12 cm. 2002. Per- Rica 10 Ideal 14 x 14 cm x 2.5 sonal visit to metres company 9 450 Costa Seller: Confidential 15 Logs and FOB Prices 2002. Per- Rica squared logs sonal visit to company

Teak logs awaiting export, Pulisingau, Kolombangara

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Potential Markets and Prices for Flueggea Poles into Australia and New Zealand for 5 Horticultural Industry and Other Purposes

Background to Flueggea flexuosa Returns from planting Flueggea In Western Samoa, Flueggea can be harvested at age Flueggea flexuosa is a small to medium tree typically 8–10 years and used for small durable poles. The price 10–16 m tall. It occurs naturally in the Philippines, in 2004 was about WS$15–30 (equivalent to US$5–10) eastern Indonesia, the Solomon Islands, and northern per 3 metre length of small pole (10–15 cm diameter). Vanuatu. In the Solomon Islands the tree has a re- Most trees yield two 3 metre poles, and two fence posts stricted habitat in lowland coastal forests on coralline (the latter selling for about WS$2–3 each). Whole trees soils and beside rivers on poorly drained sites. return for about WS$35–60 each (Thomson 2006). Flueggea is highly regarded throughout the South Pa- In the Solomon Islands, Flueggea logs are traded and cific for production of highly durable timber, being sold between villages on some islands and are sold for especially favoured for building construction uses, es- typically SI$10 per 3 metre pole (~Aust$2/pole) pecially as round fence posts and construction poles. In 2 (Blumfeld, pers. comm. ) the Solomon Islands and Vanuatu, the species grows rapidly and straight without big branches and is widely exploited for local uses. Potential markets as vineyard posts in Australia and New Zealand The species is well suited for planting in various agro- forestry systems in the Solomon Islands, offering op- The horticultural industries in Australia and New Zea- portunities for small-scale plantations and community land represent a substantial potential market for durable forestry and has potential as a tree crop in a canarium posts. Vineyards alone, occupy over 200 000 ha in the nut/rattan (Canarium indicum/Calamus spp.) mixed two countries (est. 173 00 ha in Australia and 29 000 farming system. ha in New Zealand) (Australian Bureau of Statistics 2008; Anon. 2008). The annual demand for posts to Planted trees can produce naturally durable logs on service these industries is 5.5–6 million posts3. short rotations, e.g., 6–7 years for fenceposts and 12– 15 years for construction poles. Yields are estimated to The trellis posts most commonly used in Australian be about 4–6 m3/ha/yr during the early years. Process- vineyards are pine posts treated with the chemical pre- ing is simple and includes cutting to length and bark servatives creosote or copper-chromium-arsenate removal (Thomson 2006). (CCA). These preservatives protect the timber against termites and wood rot. Use of these posts is of concern In the description offered by Thomson (2006), Flueg- to the organic industry due to the lack of a safe disposal gea has a heavy heartwood; the density has been vari- 3 method and concerns about possible contamination of ously recorded as 900 kg/m on a dry weight basis, 770 soil and crops. kg/m3 at 12% moisture content (m.c.), and 810–935 kg/m3 at 15% m.c.. The heartwood is pale yellowish brown or reddish brown, and sometimes hardly distin- 2 Blumfeld, T. (2009). Personal communication. Centre for guishable from the pale sapwood, present as a 1–3 cm Forestry and Horticultural Research, Griffith University. wide band. The grain is straight and the texture moder- ACIAR Project: FST/2007/020. Improving silvicultural ately fine. Although very hard and strong, the timber is and economic outcomes for community timber plantations easily worked, resistant to drywood termites and fungi, in the Solomon Islands by interplanting with Flueggea and very well suited for service in ground contact. The flexuosa and other Pacific agroforestry species sapwood is not durable in the ground but is non- 3 susceptible to Lyctus attack. Uses include house poles, This estimate assumes that vineyard posts are used at 6 m x fence posts, ground posts, and light aerial members in 3 m spacing or 555/ha suggesting an Australian vineyard house construction, bridges, and marine piles. post ‘population’ of about 96 million and a New Zealand ‘population’ of 16 million. Assuming an annual replace- ment at 5%, the annual demand for posts, is about 5.5–6 million.

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National and international organic standards vary in Economies could be realised through transport of 5-m their approach to treated posts, but the move is clearly logs rather than 2.5-m posts; but the small barges are towards excluding CCA and creosote posts from or- loaded by hand and logs need to be a size that can be ganic properties. The current situation under Australian lifted by men. Hence, it has been assumed that 2.5-m organic standards is that: logs will be favoured. Unloading at Noro or Honiara, storage, debarking and loading into containers and fu- • Treated posts already installed in vineyards are ac- migation to acceptable quarantine standards are neces- cepted; sary costs. • CCA posts are not permitted for new or replacement The dimensions of the standard container (Table 5.1) use; and and the requirements of the Australian vineyard indus- • Creosote posts are prohibited by some certifiers and try (posts of 2.4 m) mean that posts must be stacked permitted (but recommended against) by others. lengthways in containers. (Madge, 2007). Table 5.1 Standard internal container dimensions (20’ containers) These conditions clearly offer opportunities for un- treated, durable posts which can be supplied at a ac- Length 5.87 m ceptable cost. Width 2.33 m Treated radiata pine posts are typically 2.4 metres in Height 2.35 m length and 75 – 100 mm small end diameter and their End-door width 2.28 m strength and durability ratings (H4) meet industry re- End-door height 2.26 m quirements. Flueggea posts will have to compete with Volume 32.85 m3 these products if they are to offer realistic options to vineyard managers in Australia and New Zealand. Quarantine Quoted prices from processors and wholesalers of treated pine logs in Australia (Gippsland Treated Pine Both Australia and New Zealand have strict quarantine http://www.gtpine.com.au and International Timber regulations. AQIS standards suggest that Flueggea logs must be debarked and fumigated using methyl bromide Solutions) vary according to size (75 mm or 100 mm before they can be exported to Australia. Island Enter- sed) with notional wholesale costs (incl. GST) being prises, based in Honiara, are accredited to fumigate Aust$5.40 per post ex-mill for 75 mm 2.4-m posts and exports of wood products to Australian (AQIS) stan- Aust$8.00 for 100 mm posts. Using these costs as a dards. guide, the market for vineyard posts is worth about Aust$30 million annually. Prices for treated radiata Wood properties pine posts fluctuate and are linked with global prices Whilst Flueggea enjoys a reputation for strength and for softwood chip – the two markets compete for re- durability among the communities of the South Pacific, source and when the global demand for softwood chips these properties must be quantified and demonstrated is high, prices for treated radiata posts increase. before markets will accept Flueggea as a realistic alter- native for treated radiata posts. In a collaborative pro- Issues ject with the Forestry Division, Solomon Islands Department of Natural Resources supported by Logistics ACIAR4, Griffith University and the Queensland Gov- The logistics of gathering commercial quantities of ernment’s Department of Primary Industries and Fish- Flueggea logs/posts in a convenient central location eries are currently undertaking tests to assess these adjacent to the container ports of Noro or Honiara are essential wood properties. It is unlikely that any market impact will be possible until strength and durability challenging. In addition to unloading and loading ex- ratings are available to those responsible for marketing penses, the logs must be debarked for quarantine and Flueggea in Australia and New Zealand. Any market- the loaded containers fumigated to AQIS (or NZ) stan- ing program for Flueggea posts should include ade- dards. These costs plus the marshalling costs suggest quate field demonstrations at central and convenient an estimated FOB cost of Aust$4500 per 20’ container locations. with 17 m3 cargo or ~Aust$9 per post (Table 5.2). Shipment of Flueggea logs/posts from outer islands to the container terminals at either Noro or Honiara is expensive. Current costs associated with transport of 3 sawn lumber are estimated at SI$700–1000 /m and this 4 ACIAR Project: FST/2007/020. Improving silvicultural and offers an indication of costs for transporting posts. economic outcomes for community timber plantations in the Solomon Islands by interplanting with Flueggea flexu- osa and other Pacific agroforestry species

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Can Flueggea compete? to AQIS standards, shipped to Australia, out of the port, out of customs, and delivered to a wholesale site Table 5.2 attempts to quantify the expected costs of where a vineyard manager might buy them. To be assembling a commercial quantity of Flueggea posts competitive in the market, these costs should be close from scattered islands in the Solomons to a central to the Aust$5.20 wholesale price for a treated radiata port, debarked and stacked into a container, fumigated post.

Table 5.2 Schedule of anticipated costs related to export of Flueggea posts to Australia and subsequent delivery to the vineyard industries .

Item Cost (SI$) Cost (Aust$) per m3 per 20’ container In the Solomon Islands Payment for 2.5-m log delivered to beachhead @ SI$5.00/log (large end diameter 160 150 mm and small end diameter 100 mm, length 2.5 m = volume 0.0311 m3) Shipping to Honiara + loading and unloading (per m3) – depends on distance. Esti- 850 mate SI$700–1000. Debarking (per m3) 20 Stacking and marshalling (per m3) 70 Fumigation (@SI$1800/container) 105.90 Agents fee (estimated SI$2000 per container) 117.65 Estimated FOB cost Honiara (SI$ per m3- assumes 17m3 of posts/container) 1323.55 Estimated FOB cost Honiara (Aust$ per 20’container ) 4500 In Australia5 Freight costs (container Honiara–Sydney). Per container — 17 m3 1642 Lift on/lift-off 65 Quarantine 65 Re-delivery 320 AQIS processing 37 Unpacking 365 Cartage to rural wholesale outlet 525 FCL booking fee 20 Fuel surcharge 147 Professional fees 120 Quarantine declaration fees 37.50 Quarantine fees 33 CMR compliance 17.5 EDI fee 5 Brokerage 15 Tailgate check (road check) 176.50 Sub total 3590.5 (+10% GST) 395.05 Total costs (in Australia) 3985.55 Total delivered costs (per container carrying 17 m3) 8485.55 Estimated price per post (assuming 500 posts/20’container) 16.97

5 Personal communication. Peter Mussett, The Woodage, Mittagong.

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It is assumed in Table 5.2 that Flueggea logs will have 0.0311 m3. It is also assumed that 17 m3 of posts can be a 100 mm small-end diameter and an estimated large- loaded into a 20’ container offering about 500 posts to end diameter of 150 mm and be overcut to 2.5 m a container. length, offering a volume for an individual post of Sea freight, loading, unloading, quarantine costs plus perience with the log export and sawn lumber export road costs and GST to market come to about sectors of the industry suggest that problems will be Aust$3985 per container-load of posts. Added to this encountered in offering reliable and steady supply of are the Solomon Island costs (inter-island shipping + Flueggea posts. The markets in Australia and New debarking + fumigation + marshalling + port fees) of Zealand are aware of this and should be addressed if Aust$4500. The estimated cost to a wholesale distribu- further consideration is to be made for trade in Flueg- tion point in Australia per container load of 500 posts gea posts. will be about Aust$8485 or about Aust$17.00 per post — almost 3 times the price of a treated radiata post. A major part of offering reliable supply of a product is Minimal merchant’s margins have been included in knowledge of the resource size. Market discussions these figures. will be helped by knowledge of the size and location of the potential Flueggea resource in the Solomon Islands Challenges At the moment, there are no technical standards for Flueggea posts. It is expected that the work of the It is clear that Flueggea posts will struggle to gain ACIAR Project being managed by Griffith University market penetration in the vineyard industries of Austra- will provide data to underpin technical standards. lia and New Zealand with these price structures in Technical data relating to the strength and durability place – even assuming a modest Aust$1.00 per log paid characteristics of Flueggea posts are essential if this to the growers at the beach landing site. Indications are wood is to be marketed widely. that the delivered costs (above) for Flueggea posts will be three times those for treated radiata posts. An analy- Flueggea is not well known outside the South Pacific. sis of the breakdown of costs suggests that the logistics If it is to gain market recognition in the potential mar- and costs associated with accumulating commercial kets of Australia and New Zealand, it is important that quantities of Flueggea posts for export will make this credible demonstrations of its properties be offered. particular market unworkable. Further examination for potential domestic markets for Flueggea poles and posts is warranted including new A major factor in international trade is the ability to applications such as pre-fabricated housing. supply adequate quantities reliably and regularly. Ex-

Fleuggea flexuosa planted 1982, Poitete Forestry School arbore- tum; photo December 2008

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6 Market Opportunities for Solomon Islands Wooden Handicrafts

Background Whilst most sales of wooden carvings are completed in the Solomon Islands, some special commissioned Handcrafted wooden artefacts represent a vibrant part works are exported to Australia, USA and NZ, includ- of the living culture of the Solomon Islands. A wooden ing larger items such as totem poles and bulk heads for carving from the Solomon Islands is a readily identifi- beds, posts and large figureheads, nguzu nguzu, for able symbol of the Solomons experience. The carvings boats. So far, there appears to have been no attempt to are well known and respected in the Pacific and are blend the skilled carving of the Solomon Islands into exported and sold in tourist outlets in Fiji, Vanuatu, its emerging wood furniture industry. Cook Islands, Guam and Hawaii where they are sold as mementos of the broader Pacific experience. Wallis & The quality of carvings varies and price is influenced Fortuna and Fiji represent particularly strong markets, by several issues including: meeting the needs of their expatriate populations and tourism. Anecdotal reports suggest that, typically, carv- • The skill of the artist and the significance of the ings are sold at about twice (to thrice) the prices com- carving itself manded in the Solomon Islands. At the International • The uniqueness of the carving – for example, dol- Expo 88 in Brisbane, large volumes of Solomon Is- phins are produced in large numbers lands wooden carvings were sold however market mo- • The distance of the carver from the point of sale mentum was unable to be maintained. There are no known Government restrictions to the sale and export • If the sale is being made by the carver himself of carvings however carvings are obliged to meet quar- • The species of wood used antine regulations in importing countries. • Incorporation of shells, shark teeth and other non- Solomon Islands carvings are hand crafted in the vil- wood features, and lage environment and wood-working machinery is not • The quality of the wood used especially the pres- used in their manufacture. They fall into 4 broad cate- ence or absence of cracks or faults and capacity to gories (WWF 2008): withstand changes in humidity and remain stable • Bowls: Of varying sizes and weight in a new country. Unfortunately, few carvers recognise themselves as • Figurines: Shapes of people, heads etc. artists and regard their carving as a basic livelihood. • Sea life: Depictions of fish, dolphins and shells The artistic value of their own carving is recognised by • Accessories: Serving spoons, plates etc. few carvers (the best known and skilled) and, for ex- ample, very few sign their work. The situation appears The largest domestic markets are those serving tourism to be similar to that with Aboriginal art in Central Aus- and other visitors to the Solomon Islands (such as tralia where it took many years before the unique artis- RAMSI) and, as with other Pacific countries, with most tic merit was broadly recognised by more than a visitors buying a small carving to take back to their specialist few. countries as a memento of their visit. For visitors, unfamiliar with the Solomon Islands, the Most carvings are sold through resorts or specialist question of how much to pay for a carving is difficult. shops in large centres. Retailers have been unable to Most visitors are willing to pay a fair price and are not deal wholesale with carvings and the carver’s price is inclined to disadvantage the carver or the seller; how- individually negotiated and relatively high (compared ever they have a justifiable fear of paying excessively with carvings from Asia). Retail shops and resorts sell for their Solomons carving. carvings on a commission basis; after agreeing on a selling price with the carver, the retailer agrees to keep The purchase of a carving would be assisted if the an agreed commission (about 10%) for storing and buyer had access to additional information on the carv- marketing the carving. No money changes hands until ing itself. There is little readily available information the carving is sold. on Solomon Islands carvings, and sales would be as-

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sisted through providing the buyer with basic back- Challenges ground: Competition • The type of wood used. Popular species include kerosene wood (Cordia subcordata), rosewood Carved wooden artefacts are widely produced through (Pterocarpus indicus), ebony (Diospyros spp), Asia, especially Vietnam and Indonesia, where com- ironwood (Xanthostemon melanoxylon), canoe- munities have their own strong traditions for high qual- wood (Gmelina moluccana), kwila (Intsia bijuga) ity wood carving. These carvings are marketed widely and coconut (Cocos nucifera). and are of high quality and cheap compared with those from the Solomon Islands. In the non-discerning mass • The significance of the piece. Explanations of why markets of Australia and other western countries, it will dolphins or certain fish species are popular carv- be difficult for Solomon Islands carvings to match the ings; the significance of shark teeth or coloured competitive prices for Asian carvings and to find a shells market niche which is financially viable. • The carvers themselves – who they are, and what are their backgrounds Information on Solomon Islands carvings • The provenance of the carving: date of carving, Despite the cultural significance of wood carvings and where the carving originated, information on the the importance of their sales for local communities, Province. there are few readily available, popular, authoritative sources of information on the carvings. The excellent Some carvers have expressed concern at the emerging publication Handicrafts of the Solomon Islands (1986) difficulty in finding reliable sources of suitable wood is now out of print and there are few other sources to for carving. In particular, the popular carving woods offer information on the rich variety of Solomons carv- kerosene wood and ebony are becoming difficult to ings. locate. From discussions with carvers in Gizo and Honiara, it Shipping and freight is apparent that the carvers themselves lack basic mar- In many of the markets of Asia, retailers offer clients a ket information. Market information relating to the shipping service to send carvings and artefacts back to needs of the tourist and expatriate markets in the Solo- their countries. Such a service allows visitors to pur- mon Islands is lacking: what size is popular; what chase large or heavy artefacts without compromising woods; what designs. Carvers were largely unaware of their travel with unwieldy luggage. This was discussed the quarantine and customs requirements for import to with the Solomon Islands agent for DHL, a major in- Australia and might wish to reduce their use of materi- ternational courier. Unfortunately the Solomon Islands als such as particular species of shells or dolphin’s retailers are scattered across many resorts in the islands teeth to facilitate smooth passage into western markets. where logistics are challenging and often unreliable and the markets are relatively small and variable. The current volume of carvings to be shipped does not war- rant the creation of a special agency in popular tourist centres such as Gizo. This limits the size of most carv- ings which can be sold to visitors.

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God of War Known as ‘Nguzunguzu’, it is the traditional God of War in Western Solomons.

Kerosene wood

Dimensions: W28cm x H25cm

Retail price: US$91

Small bowl

Kerosene wood

Dimensions: Diameter11.8cm x H6.5cm

Retail price: US$11

Oval bowl

Coconut wood

Dimensions: L29.2cm x W22cm x H11cm

Retail price: US$45

Dolphin

Ebony wood

Dimensions: L22.5cm x W4.8cm Retail price: US$15

Marine turtle

Rosewood Inner chamber with the turtle back designed as a lid.

Dimensions: L54cm x W28.5cm Retail price: US$241

Source: Solomon’s Handicraft Treasury (http://www.solomoncrafts.com/default.htm) Right-hand photos: Melanesian Handicrafts, Ranadi, Hoinara.

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Market Opportunities of Blocks of Speciality Timbers for Wood Turners/Craftsmen 7

Wood arts and craftsmen around pathogenic attack. Invariably these burls have complex the world capture the essence of wood in their individ- textures, colours and grains. Consequently wood- ual pieces to enhance the unique grain, texture and col- craftsmen prize these pieces of timber. However there ours. The fulfilling act of woodwork is attracting more is still a demand for the characteristics inherent in con- and more people and woodturning is enjoying unprece- ventionally sawn timber (Aspden 1999). dented popularity. The wood needs of this community and the wood needs for other speciality wood products The most important factors in marketing speciality such as billiard cues, clocks, fine furniture, custom timbers are market acceptance for the species con- knife handles, musical instruments, flooring (including cerned and knowledge of its wood properties. Interna- parquetry flooring), tool handles, and carved objects tional research indicates that the following market are increasing. The unique wood properties of Solomon acceptance for the species, the five most important fac- Island hardwoods would be appreciated in the special- tors affecting the choice of speciality timbers are, in ity timber markets, and perhaps attract high prices. order of importance, colour, grain, volume availability, suitability for use and price (Gresham 1995). Where a Woodcraftsmen seek timbers that have eccentric new species is seeking to break into the market, it is grains, contrasting colours or unusual textures. Solo- common to build upon market preference for tradi- mon Islands timbers come in a range of colours and tional timbers and select a well-known market ana- densities and possess the individualistic qualities that logue (such as teak, mahogany or rosewood) and use woodcraftsmen prize. this relationship as a marketing tool. Unlike the regular timber industry where the industrial A series of unstructured and informal telephone inter- end uses often demand a consistent product, the spe- views were conducted in Australia as part of this study. cialty timber industry is not confined to providing tim- Generally, most informants were positive about the ber with consistent properties but on the contrary is market potential of Solomon Island speciality timbers often encouraged to provide timber of an inconsistent and believed that these could be traded successfully nature. One such example that has a substantial com- provided certain conditions were met and a number of mercial value are burls. Burls are the cankerous out- issues were raised. growths of trees, usually the result of some injury or

Figure 7.1 Products from turning speciality Australian woods (Aspden 1999)

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Market knowledge of Solomon Is- low reliability of timber supply and lack of information about the wood properties, processing characteristics land speciality timbers and techniques, and suitable uses for the Solomon Is- Speciality timbers from the Solomon Island are not lands timbers compared with those from other coun- well known and there is a need for active marketing to tries. create the Solomon Islands brand. There was nothing to distinguish Solomon Islands rosewood from PNG During interviews, complaints were heard about unpro- rosewood or rosewood from Asia which is better fessional supply chain management for timber sales known. The question was raised of how to differentiate from the Solomon Islands and these lead to frustrating Solomon Island timbers from the same species from and costly dealings with suppliers. other countries. Products and market needs The generally reactive nature of timber industries means that promotional activities, including exhibitions It is uncertain of where the market options for special- (Rivera et al. 2003) and the publication of ‘glossy’ ity timbers lie. The potential markets include manufac- promotional booklets (e.g. Teixeira et al. 1988), are turers of items such as billiard cues, clocks, fine often considered essential for establishing species from furniture, custom knife handles, musical instruments, new sources in the market. The Solomon islands has flooring (including parquetry flooring), tool handles, partly completed this task with the publication of and turned and carved objects. The variation in species, Solomon Island Timbers by Peter Eddowes colour and densities of Solomon Islands timbers sug- (www.solomontimbers.com.sb) . This collection of gests that the needs for many of these products could species’ descriptions needs to be expanded to include be met. Retailers understand this variation but require the range of species which might find a niche in the information on aspects of quality; dimensional stabil- speciality timbers markets. ity, gluing and screwing properties for example. This variation suggests that container shipments would be segregated to meet various end needs. Market reliability Retail outlets involved with the speciality timber busi- Some clients require rough sawn air dried timber and ness in Australia demand reliability as key to their will be demanding of quality standards. Other clients require timber cut to prescribed dimensions (Table business. After reliability, issues of responsiveness to market needs and quality and presentation are consid- 7.1). It is important that these client standards be met ered. consistently. One of the main reasons for a perceived lack of interest in specialist timbers from the Solomon Islands is the Table 7.1 Dimensions of timber boards required by product manufacturers (Venn and Whittaker 2003)

Product Thickness (mm) Width (mm) Length (mm) Billiard cues 35 35 1600 Flooring 12–25 60–150 30–6000 Furniture 20+ 75–100+ 100–4000 Musical instruments Flute 40 40 70–700 Guitar — side 50 135 900–1000 Guitar — face and back 50+ 230 550 Guitar — neck 40–75 140+ 400–600 Guitar — fingerboard 10 50 300–500 Violin 50 50 750 Xylophone 20–50 38–50 150–350 Veneer 100–250 150–250 2500–2900 Woodcarving 50 100 500

Costs issue facing any proposed export of speciality timbers from the Solomon Islands will be the challenges and The logistics associated with the Solomon Islands tim- expenses associated with assembling a commercial ber industry offer costs which substantially increase quantity of these speciality timbers at either Noro or delivered costs in Australian markets. By far the largest Honiara container ports. The costs of delivering wood

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to a beach head, sea transport to Noro/Honiara, storage, However, the markets of Europe and North America loading, fumigation, will make the FOB price for SI have an sophisticated appreciation for ‘exotic’ woods speciality timbers high (see, for example costs outlines and are far larger than those of Australia and New Zea- in Parts 3 and 5). Based on the experience with con- land. If the Solomon Islands timbers are to compete tainer exports of rough sawn utility timbers such as with the rich tropical wood resources of Asia, South Kwila or Vitex, it is unlikely that speciality timbers and Central America and Africa, then a marketing pro- would be landed in Australia for less than Aust$1200 gram will be necessary. per m3. Venn and Whittaker (2003) provided a list of estimates Anecdotal evidence suggests that Australian and inter- of current prices paid by wood craftsmen and timber national timber product manufacturers have paid high merchants for western Queensland hardwoods. Al- prices for small volumes of Solomon Island hard- though these hardwoods are quite different to Solomon woods, however, it is unclear whether sufficient de- Islands hardwoods, they face similar market chal- mand could be generated from high-value timber lenges; they are not well known; only recently has manufacturers to warrant expanded import of these technical data on timber properties become available. timbers. The prices offer an order of magnitude for the prices paid for speciality timbers in the Australian market. 3 Size of markets Craftsmen reported prices from $335/m for green rough sawn boards to between $2000/m3 and $3000/m3 The Australian markets for speciality timbers are very for rough sawn, dried timber. Timber merchants indi- small by global standards - many of these businesses cated that they purchase western Queensland hard- consume annual timber volumes measured in kilo- woods for between $650/tonne to $3000/tonne for logs, grams, not cubic metres (Venn et al. 2005). In their and $3000/tonne to $5000/tonne for dressed timber. similar study on markets for western Queensland hardwoods, Venn and Whittaker (2003), reported esti- mated that the current total traded volume in these Marketing Queensland hardwoods does not exceed approximately Informal questions to speciality wood merchants in 200 m3 per annum - and the logistics of supply are sim- Australia suggest that Solomon Island hardwoods are pler than those from the Solomon Islands. relatively unknown to the speciality sectors of the Aus- tralian and international timber industry and are only traded in small volumes.

Figure 7.2 Products from turning speciality Australian woods (Aspden 1999)

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Penetration into the international markets for speciality • Determine the timber condition required by par- timbers from the Solomon Islands will require a large ticular product manufacturers (KD, rough sawn and well-directed marketing campaign. This campaign etc) must seek to differentiate SI timbers from those of • Determine the dimensions required by particular PNG and Asia, which might be better known and more product manufacturers – this will influence appro- readily available. This campaign must be balanced with priate harvesting, processing and seasoning meth- the views expressed by some Solomon Islands carvers ods that some high value species such as ebony are in short supply and will be needed to meet domestic needs. • Estimate the potential domestic and international market demand for Solomon Island speciality Conclusions hardwoods. • Provide a reliable estimate of what volumes of Some homework remains to be done if Solomon Is- wood might be availability from the Solomon Is- lands timbers are to find a niche in speciality timber lands markets: This chapter has been drawn largely from the reports • Wood properties of species to be marketed must be and the approach adopted by Venn et al. (2004), in freely available. The published work of Eddowes their study Utilisation of Western Queensland Hard- (2005) could be expanded and disseminated woods as Speciality Timbers (RIRDC Publication number 04/130).

Figure 7.3 . Wood-turned articles from specialist Tasmanian species (Aspden, 1999)

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Market Intelligence 8

The major current markets for of seasoned and/or treated timber and accurate label- Solomon Island sawn timbers are in Australia and New ling of consignments and shipping documentation. Zealand. Both countries are familiar with the timber Once these parameters had been addressed, there were species available especially the commodity-type spe- a number of new opportunities and considerations cies such as Kwila and Rosewood. Other timber spe- which might enhance the Solomon Islands export in- cies that have established niche markets in both dustry of logs, sawn timber and wood products. countries include akwa, pencil cedar, vitex and white beech. Rosewood is used in greater volumes in Austra- Most large wholesalers and retailers are beginning to lia than in New Zealand. find market pull for legal timber, timber from sustain- able sources and certified timber. Bunnings, the Woo- The main demand in Australian and New Zealand mar- dage (in NSW) and NZ wholesalers all require some kets is for durable structural grade timbers (F17 & F27) measure of ‘greenness’ to their products. The commu- and timbers for general joinery including window and nity value of SI timbers helped offer this perception of door frames, window sills, wooden doors, shop-fitting environmental responsibility and gave exporters and items and general building construction such as deck- buyers the opportunity to sell into the environmentally ing, screening, posts and flooring. Wood furniture, cus- conscious market. tom-made in Australia, is also manufactured but this is limited as most Australian-made furniture has diffi- Specific comments received from the Sydney markets culty competing with imports from Vietnam, Indonesia include: and China. Kwila remains popular as a species for out- • Timber from FSC certified, transitional and self door garden furniture. certification schemes such as Greenpeace in SI of- Other countries importing Solomon Islands timbers fers a degree of accountability which finds reso- include Noumea and Tahiti where durable species such nance with buyers. as Kwila and Vitex are popular for exterior joinery and • Demand outstrips supply for both Taun and Akwa building purposes associated with the tourist industry, • e.g. heavy decking and posts and for accommodation Vitex is getting more recognition dwellings. • An increase in demand for Rosewood for joinery has been experienced since western red cedar has Other possibilities exist in lucrative, specialized inter- become less available national markets, such as Japan. The Japanese market has rigid specification and quality standards for sawn • Kwila is one of the few species which is fire rated timber and requires standard sizes specific for the in NSW where it competes successfully with other Japanese market – these dimensions differ to those fire rated species such as spotted gum, iron bark standard dimensions in the Australian and New Zea- and turpentine because of its much better working land markets. Provided the rigid specification and qual- properties. ity standards can be met, and on-shore grading and • Kwila decking is a low-value, high-volume prod- kiln-drying completed prior to export, markets may uct, and it is difficult to compete with Indonesian- develop for Kauri Pine, Pencil Cedar, White Albizia, sourced Merbau. Kwila decking, especially as Rosewood and Vitex. The Japanese are very ‘quality’ wider boards, may become attractive as the ex- conscious but will pay excellent prices for the right change rate with the Australian dollar changes. product. • Certified timber, timber sourced from legal sources In the course of this study, the team met and discussed and from community operations are suitable for opportunities for the Solomon Islands with many play- particular applications or projects which have an ers in the timber industries in New Zealand and Austra- accountability requirement. lia. This chapter attempts to bring together a broad • By global standards, the Solomon Islands timber number of suggestions which might benefit those in- resource is relatively small and there is a need to volved in the industry. The messages which were most work cooperatively in establishing a credible niche strongly and frequently received were the need for con- market for SI timbers, based on accountability and sistent and reliable supply; consistent grading; compli- sustainability. ance with requested qualities, sizes and lengths; supply Comments from the New Zealand markets included:

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• The opportunities for SI • Market demand for both Vitex and Calophyllum is timbers would be enhanced if increasing and both have started to receive market the presentation of timber can recognition. improve and companies such • Timbers from the Solomon Islands compete with as Top Timber and Honiara hardwood timbers from PNG, Australia, Indonesia, Timber Traders in SI are lead- Western Africa, and oak and beech from Europe. ing the way. Timber import- 9 ers in New Zealand are keen • Many of the species which compete with Solomon to get develop improved saw Islands hardwoods for Wharf timbers come from milling operations in the Solomon Islands to foster Central and South America, mainly Peru. Gener- improved management of the resource and to en- ally Vitex can compete with these timbers as it is hance quality control. cheaper. • In New Zealand, the trade in Merbau is decreasing • The main use for teak in NZ is as decking and because of a market perception of its poor envi- general boat building. The volumes required are ronmental credentials. relatively small and dark, heavy teak from very old plantations or native forests is preferred . • Solomon Island timbers enjoy a great deal of goodwill in New Zealand and this is expected to • The gingery/orange colour of plantation teak is not remain so as long as perceptions surrounding sus- fashionable at the moment. tainability and legality are unambiguous. • The transition of plantation teak to the general • There is little market demand for finished wood markets needs to be managed and marketed care- products from the Solomon Islands unless the fully and an ideal product range established (i.e. wood is kiln-dried. An exception to this is Vitex dressed boards). which is extremely stable, air dries well and can be used outside or in wharfs.

Air-dried kwila prepared for ex- port, Timol Timbers, Honiara

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Conclusions and Recommendations

Conclusions Given the influence of export markets on the manage- ment of both natural and plantation forests, information The Solomon Islands has a high quality natural wood on prices and opportunities will be an important part of resource for which there will be a steady demand in the success of this program. It is recommended that: both domestic and international markets. The current economic crisis has caused a temporary downturn in The FACT project offer inputs to the formulation the export markets for logs and sawn timber, however, of the Forest Livelihood Program, perhaps through demand for tropical hardwood logs and wood for ply- an expert team to contribute to its development . wood, construction, furniture and flooring is predicted to recover. Despite the significance of tropical hard- To assist in the exchange of knowledge, market infor- woods to the economy of the Solomon Islands, the mation and project opportunities in the international country does not maintain a membership of the Interna- forestry sector, it is recommended that: tional Tropical Timber Organisation. FACT continue to encourage the Solomon Is- There is well-documented evidence to indicate that the lands to become a member of ITTO. resource is diminishing rapidly and that most commer- There is a substantial quantity of excellent information cially-accessible natural forests will be logged by 2011. and publications of relevance to the Solomon Islands The consequences of this to the industry, local em- ployment and to SIG revenues have been well- and their Pacific partners which is not readily available. publicised. It is recommended that: Conditions for growing trees in the Solomon Islands FACT approach the owners of information useful are excellent. There is an expanding resource of some to the log and wood export sectors (the AusAID- 26 000 ha of large-scale and smallholder plantations of supported SIFMP in particular) and have this made commercial species and there is an expectation that this publically accessible on the Web. will expand further in response to future export oppor- The small value-adding community in the Solomon tunities. Islands is disadvantaged through limited sharing of Despite a proven capacity to grow and manage trees knowledge. It is recommended that: commercially, the major challenge facing export- FACT assist dissemination of knowledge through oriented, commercial development of large and small encouragement and support of: plantation programs is that of logistics. The challenges of harvesting small numbers of trees in many locations • The production of a VATA periodical and delivering these as a commercially-viable con- (monthly or quarterly) which would incorpo- signment at a central export point are substantial and rate information from the Export Database expensive. The potential for a commercial barge ser- maintained by the Ministry of Forestry and the vice to meet this demand deserves re-consideration. Central Bank of the Solomon Islands. The infrastructure and skills for an effective value- • A synthesis of export data on sawn timber and adding sector are limited and this is potentially com- log exports from MoF, CBSI and Customs for promised by uncertain technical standards and poor provision to VATA. quality control . There are opportunities for improve- • An inventory of the wood processing infra- ments in sawing and seasoning standards which will structure of the Solomon Islands which will enhance export opportunities. The current proliferation offer industry members information on facili- of portable sawmills in the Solomon Islands needs to ties, capacities and skills. be reviewed. To ensure that these are not wasteful and • An expansion of the species covered in the remain economically viable, it is important for each book Solomon Islands Timber mill to be accompanied by a package of skills and knowledge to make sure that most profitable use is The wooden furniture industry has the potential to util- made of the facility and the resource. ise and display the superior features of high quality timbers from the Solomon Islands. This industry is Recommendations small and unsophisticated and would benefit from a The Australian Agency for International Development program of technical support to help it expand. It is (AusAID) is currently formulating a Forest Livelihood recommended that: Program as part of ongoing support to the forest sector.

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FACT seek sources cial benefits to small rural communities. It is recom- of technical support for mended that: the Solomon Islands wood furniture indus- FACT support a strategic marketing program try which raises the profile of Solomon Islands carv- ings and highlights the symbolism of wooden carv- Teak plantations com- ings as part of visitors’ Solomons’ experience. 10 prise an estimated 70% Components in this strategy might include: of the 6000 ha small- holder plantations in the Solomon Islands. The poten- Encouragement for carvers to accept intellectual tial value of this resource in export markets has been a ownership and recognition for their carvings as art feature of the extension efforts which have encouraged and sign their work. and supported the establishment of plantations. The Work with NGOs, resorts and retail outlets to largest market for plantation-grown teak is India and it provide improved market information to the carv- is recommended that: ers; which carvings do tourists prefer; what size is popular; what woods; what designs? FACT support a consulting visit to the region by Mr R. T. Somaiya, President, Timber Importers As- Provision of information to buyers. SPC / FACT sociation of India to provide advice on how best to can work with the Solomon Islands Department of meet the demands of the Indian markets. Industry and local handicraft retailers to: Planted trees of Flueggea flexuosa can produce natu- • Produce colourful and informative tags and rally durable poles on short rotations. Export and do- brochures to accompany carvings and support mestic market opportunities for these poles are limited sales at resorts and retail outlets. because of the lack of technical data relating to the • Reprint the booklet: Handcrafts of the Solo- strength and durability characteristics. There is consid- mon Islands (Ministry of Trade, Honiara, erable uncertainty as to the size of the Flueggea re- 1986) source in the Solomon Islands and its capacity to This additional information will enhance the visitors’ supply markets. It is recommended that FACT en- Solomon Islands experience and encourage sales. The courage: French have a sophisticated and strong appreciation for • The development and dissemination of infor- Melanesian art and Solomon Islands carvings are popu- mation on the strength and durability of lar in markets in New Caledonia and Wallis & Fortuna. Flueggea poles It is important that these documents, brochures and tags are published in both French and English. • An assessment of the size and location of the potential Flueggea resource in the Solomon In addition, it is recommended that FACT work with Islands Solomon Islands wood-workers to broaden the product • Foster credible demonstrations of the durabil- range. Examples included building blocks for pre- ity an strength properties of Flueggea, and school children and children’s toys. Of critical impor- • Examination of new applications for Flueggea tance will be high-quality finishing and good presenta- poles and posts such as pre-fabricated hous- tion for these items. ing. FACT might also consider studying the processes and Handcrafted wooden artefacts represent a vibrant part strategies involved in gaining artistic recognition for of the living culture of the Solomon Islands. For visi- Central Australian Aboriginal art and assessing if these tors to the country, wooden carvings are a readily iden- approaches are appropriate for the Solomon Islands. tifiable symbol of the Solomons experience. Sale of wooden carvings has the potential to offer many finan-

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References

Ago, K (2008) Status of Forests. Presentation to: Investing in Eddowes, P. J. (2005). Sawing and treatment of wood in the Forests for a secure future for our People. Solomon Solomon Islands. Manual 1. Solomon Islands For- Islands National Workshop. 1-5 December 2008. Ho- estry Management Project ll. 41pp. niara. Solomon Islands. Ministry of Forestry Eddowes, P. J. (2009). Specialist inputs into development of Andrewartha, R (2008). Forestry sector overview: Chal- a market information system for Solomon Island tim- lenges and Opportunities within the Solomon Islands bers. Asia Pacific Timber Consultants, T/A Grokelo sector. Presentation to Forest Trends on behalf of Pty. Ltd. Annex 4. This document. Solomon Islands Forestry Management Project II (SIFMP II) . October 2008. Eddowes, P. J. (2005). Solomon Islands Timbers. Solomon Islands Forest Management Project, Honiara. 48pp. Anon (2008). Wines of NZ. www.solomontimbers.com.sb http://www.winesofnz.com/Info.aspx Gresham, G. (1995), ‘In quest of the unknown: marketing is Aspden, R. (1999). Woodturning & Australian Timbers. The the key to increasing the use of lesser known species Australian National University. http://sres- in trade’, ITTO Tropical Forest Update, 5(2): 3-5. associ- ated.anu.edu.au/fpt/nwfp/woodturning/wood.html#an Gresham, G. E. (1977). A short guide to substitute selling of chor15322024 Papua New Guinea Timber. Forest Industries Coun- cil, Port Moresby, Papua New Guinea. Australian Bureau of Statistics (2008). Vineyard Estimates, Australia, 2007-08. http://www.abs.gov.au Groves, K. W. (2005). Review and Strategy Plan for Capacity Building in the small-scale sawmilling sector of the Battersby, Bryn (2008). Calculating the Determined Value Solomon Islands. SIFMP report by URS to AusAID. for export round logs. Economic Reform Unit, Minis- try of Finance. Presentation to SIG stakeholders. Groves, K. W. (2009). Portable Sawmills in the South Pa- cific. CIFOR. 41 pp. Bhat, K. M.., Balasundaran, M., Bhat, K. V., Muralidharan, E. M. and Thulasidas, P. K. (eds) (2008). Processing Hardwoodmarkets (2004 ). Special focus: Teak. and Marketing of Teak Wood Products of Planted http://www.hardwoodmarkets.com/site/news/ Forests. Proceedings of the Regional Workshop, 5-28 International Wood Markets (2009). China facing the brunt of September 2007, Kerala Forest Research Institute, a pending log supply shortage as a result of Russia’s Peechi, India. Kerala Forest Research Institute, current 25% Log Export Tax and the scheduled 80% Peechi, Kerala, and the International Tropical Timber Tax. Press Release: Organization, Japan http://www.woodmarkets.com/Press%20Releases/09- CBSI, (2008). Round Logs Export Approval Data (specific 01- authority) summary report – quarter one (1) 2008. 26%20FINAL%20Press%20Release%20for%20Full Exchange Control Unit – Exports Section. Central %20Russia%20Log%20Export%20Tax%20Rept1%2 Bank of Solomon Islands. Honiara, Solomon Islands 0RT.pdf (11/5/2008) International Wood Markets (2009a). China Bulletin, January CBSI, (2008). Round Logs Export Approval Data (specific 2009; February 2009 ( authority) summary report – quarter two(2) 2008. http://www.woodmarkets.com/p_chinabulletin.html) Exchange Control Unit – Exports Section. Central International Wood Markets (2009b). China Bulletin, Febru- Bank of Solomon Islands. Honiara, Solomon Islands ary 2009. (11/5/2008) http://www.woodmarkets.com/p_chinabulletin.html) Central Bank of Solomon Islands (2008). 2007 Annual Re- ITTO (2008) Tropical Timber Market Report. International port. Honiara, Solomon Islands. 113 pp available Tropical Timber Organization Market Information from: Service. Vol. 13. No. 23. 1-15 December 2008. ITTO http://www.cbsi.com.sb/fileadmin/PDF/reports/Arepo rts/AR2007.pdf (last accessed 25/1/09) ITTO (2009a). Tropical Timber Market Report. Volume 14 Number 1, 01 - 15 January 2009. Central Bank of the Solomon Islands (2007). Annual Report, 2007. P 16. ITTO (2009b). Tropical Timber Market Report. Volume 14 Number 2, 16-31 January 2009. Customs, and Excise Division, SIG (2009). Data supplied by customs tracking

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Kalafatis, S.P. (1985), ‘The introduction of lesser-known Group Teak Project 2006 – ARSN 119 363 727. tropical hardwood species: avoiding past mistakes’, Perth, Australia. Malaysian Forester, 48(1-2): 31-47. Pérez, D. (2008). Teak Wood Prices 2000-2005: An Over- Katsigiris, E. (2009). Accessing China Customs Data for Log view. Pp 318 – 328 in: Bhat, K. M.., Balasundaran, and Sawn Wood Imports from the Solomon Islands. M., Bhat, K. V., Muralidharan, E. M. and Thulasidas, Annex 3, this report. P. K. (eds) (2008). Processing and Marketing of Teak Wood Products of Planted Forests. Proceedings of the Konairamo, G. (2008). Overview of [the] Forest Sector in Regional Workshop, 5-28 September 2007. Solomon Islands. Presentation to: Investing in Forests for a secure future for our People. Solomon Islands Precious Woods (2005). Questions about the teak market. National Workshop. 1-5 December 2008. Honiara. http://www.preciouswoods.com Solomon Islands. Ministry of Forestry. Rivera, R., Vindel, C., Flores, J. and Tovar, O. (2003), ‘In- Madge, D. (2007). Organic Farming: Alternatives to Treated creasing the value’, ITTO Tropical Forest Update, Vineyard Posts. Agriculture Notes (AG1169). De- 13(1): 3-4. partment of Primary Industries, Victoria, Australia. http://www.dpi.vic.gov.au/notes . Solomon Islands Government (SIG), (2008). Determined Value Schedule. Effective of May 2008. Legal notice Midgley, S. J., Lal, P, Bhojvaid, P. and Brown, A. G. no: 32. Honourable Gordon Darcy Lilo, Acting Min- (2007a). A Strategy for Developing Market Opportu- ister of Finance and Treasury. 24/4/2008. nities for Australian Forest Products in India. A Re- port to the Forest Industries Branch Department of Somaiya, R. T. (2005). Teak Trade in India. In: Bhat, K. M., Agriculture, Fisheries and Forestry. 40pp. Nair, K. K. N., Bhat, K. V., Muralidharan, E..M. and http://www.daff.gov.au/__data/assets/pdf_file/0017/5 Sharma, J.K. (eds) (2005). Quality Timber Products 40224/20071216-indian-report.pdf . of Teak from Sustainable Forest Management. Kerala Forest Research Institute, Peechi. 669 p Midgley, S. J., Rimbawanto, A., Mahfudz, Anies Fuazi and Brown, A. G. (2007b). Options for Teak Industry Teixeira, D.E., Santana, M.A.E. and de Souza, M.R. (1988), Development in South-East Sulawesi, Indonesia. Re- Amazonian Timbers for the International Market, search study commissioned by the Australian Centre ITTO Technical Series No. 1, ITTO, Yokohama. for International Agricultural Research. 31pp. Thomson, L.A.J. (2006). Flueggea flexuosa (poumuli), ver. http://www.aciar.gov.au/node/3870 2.1. In: Elevitch, C.R. (ed.). Species Profiles for Pa- Midgley, S.J., Blyth, M, Mounlamai K., Midgley, D and cific Island Agroforestry. Permanent Agriculture Re- Brown, A. G. (2006). Towards Improving Profitabil- sources (PAR), Hōlualoa, Hawai‘i. ity of Teak in Integrated Smallholder Farming Sys- http://www.traditionaltree.org . tems in Northern Laos. Australian Centre for URS (2003). National Forest Resource Assessment, October International Agricultural Research (ACIAR). Can- 2003. Solomon Islands Forestry Management Project, berra, Australia. Technical Report 64. 69pp Phase 6. Prepared for AusAID and Ministry of Fore- http://www.aciar.gov.au/publication/TR64 stry, Environment and Conservation. Ministry of Forestry (2008) Forestry Division 2007, Work URS (2003). Marketing Plantation Teak and Mahogany Summary Report. Ministry of Forestry, SIG Grown in the Solomon Islands. Solomon Islands For- Ministry of Forests, Environment and Conservation (2001). estry Management Project. Phase 5. Report to Log Export Database: Operating Manual for Log AusAID and the Solomon Islands Ministry of For- Marketing System (Vers 1.0). Honiara, Solomon Is- estry, Environment and Conservation. lands. URS (2004). Independent Determined Price Review; Final Moya1, R and Perez, D. (2008). Processing and Marketing of Report. URS Report to the Solomon Islands Forestry Wood Products from Fast-Grown Teak Plantations in Management Project. Honiara, Solomon Islands. Costa Rica. Pp 312 – 317 in: Bhat, K. M.., URS (2004). A manual for sellers exporting small consign- Balasundaran, M., Bhat, K. V., Muralidharan, E. M. ments of Logs or Sawn Timber. Report to the Solo- and Thulasidas, P. K. (eds) (2008). Processing and mon Islands Forestry Management Project. Honiara, Marketing of Teak Wood Products of Planted For- Solomon Islands. ests. Proceedings of the Regional Workshop, 5-28 September 2007. URS (2006). Review of Determined Values, July 2006. URS Report to the Solomon Islands Forestry Management National Forestry Plantation Development Program (2008). Project. Honiara, Solomon Islands. Solomon Islands Government commitment to land- owner tree planting through the Ministry of Forestry. URS (2006). Solomon Islands National Forest Resource As- Presentation to: Investing in Forests for a secure fu- sessment Update 2006. Solomon Islands Forestry ture for our People. Solomon Islands National Work- Management Project ll. Solomon Islands Ministry of shop. 1-5 December 2008. Honiara. Solomon Islands. Forestry, Environment and Conservation. 26pp + An- Ministry of Forestry. nexes. Padmanabha, H. S. A. (2006). International Teak Market Report. Product Disclosure Statement; Rewards

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Venn, T. J. and Whittaker, K. (2003). Potential Specialty http://www.rirdc.gov.au/reports/AFT/04- Timber Markets for Hardwoods of Western Queen- 132sum.html sland, Australia. Small-scale Forest Economics, Management and Policy, 2(3): 377-395, 2003. World Bank, (2009). Commodity Price Data. Development Prospects Group. Development Economics Vice Venn, T. J., McGavin, R. L. and Leggate, W. W. (2004). Presidency. World Bank. Washington D.C, USA. Utilisation of Western Queensland Hardwoods as Speciality Timbers. RIRDC Publication no. 04/130, WWF (2008). Market Assessment Wood Carving Products of RIRDC Project No PN99.2004. Marovo Lagoon. Report prepared by WGL Consul- tancy Service. October 2008.

Logistics of transporting logs and sawn timber to a central point offer challenges in the Solomon Islands

Portable sawmills are popular, but require a package of skills and facilities to be commercially successful

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.. Annexes

11

Annex 1 Field Trip Itinerary, Solomon Islands

9–20 December 2008

Date Overnight Activity location Tuesday Honiara • Depart Canberra (QF 948 0625 CAN-BRI 0725) 9 December • Arrive Honiara (IE 713 0930 BNE-HIR 1320) • Delayed departure - leased plane from Air Vanuatu unserviceable so flew on a plane leased from Air Nauru – true Pacific collaboration. Arrived Honiara 01:30. • Overnight Honiara Hotel Wednesday Honiara • 08:30 Meeting with MoF – Mr Edward Kingmele (Permanent Secretary) and Mr Reeves 10th Moven, Forest Commissioner. • Meeting with SIFMP. Ross Andrewartha (Team Leader) and Peter Baldwin (Senior Advisor) • Meeting with VATA - Julius Houria VATA Timber Manager. • Meet with Silent World partners – discussions re logistics and shipping lumber between is- lands. • Tour of Rinandi/logging companies – appointments with Good Wood Director • Drinks at the Yacht Club. Discussions with John Casey, Peter Baldwin. • Overnight Mendana Hotel Thursday Hoinara • 09:00. Meet with Austin Holmes, Secretary, Solomon Islands Forestry Association and Man- 11th aging Director of Earth Movers (a logging company. • 11:00. Meet with John Casey, EU Sustainable Forestry Project. • Overnight Mendana Hotel Friday Honiara • 10:00 Meeting with Nicholas Wong, Omex sawmills. th 12 • 15:00 Meet with Mr L. P. Wong, Good Wood. • 15:30 Discussions with John Casey, EU Sustainable Forestry Project • 16:30. Meet with John Wong, Top Timber. • Overnight Mendana Hotel. Saturday Munda • Visited Honiara Port th 13 • 16:30 flight to Munda • Overnight Agnes Lodge Sunday Ringgi • Morning discussions th 14 • Discussions with Don Croft (NZ manager of Munda Lodge) re carvings. • Pick up by KFPL boat 15:30. Depart to Ringgi (KFPL) via Ziporo Huba Lodge on Lola. • Overnight KFPL House. Dinner with Andy Page Monday Ringgi • Meet with Andy Page to discuss KFPL markets. th 15 • Field visit to KFPL export facilities and plantations with Figert Roger, Chief of Technical Services. Visited Pulisingau port, Poitete sawmill and arboretum.

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Date Overnight Activity location • Dinner with Paul and Laura Andrews and Andy Page. • Overnight KFPL House. Tuesday Honiara • Depart KFPL for Noro by boat. th 16 • Inspection of Noro container terminal. . • Meet Buni Milling and reforestation. • Travel to Gizo: Lunch at Fat Boys Resort and discussions re carvings and durable timbers for construction. • Meeting with Ex-SWIFT NRDF – Wilco Bosma, Suti Stephen and Marlon Kuve to discuss marketing locally-sawn timber. • Meet with Danny Kennedy and Raini at Gizo Dive Shop re commission sales for carvings. • Overnight Gizo - Gelbania’s Wednesday Honiara • 07:00. Fly to Honiara th 17 • 12:00 Lunchtime discussions with SIFMP/ VATA/ MOF. Presentation on the mission and expected outputs. • 13.30 Customs - David Sadler and Christine Heiser • 16:00 Bruce Saunders BJS Carving + staff. • Australian High Commission – Wayne Smith, OSC. • Overnight Honiara Thursday Honiara • 09:00 Meet CBSI – Vincent Nomae (Rescheduled to 13:00) th 18 • 09:30. Meeting with Nanette Tutua, Timol Enterprises (Also Shane Tutua, Team leader ACIAR Fluggea/Teak project) • Meeting with Island Enterprises, approved agents for AQIS fumigation. • 11:00 VETE and Greenpeace; Geoff and Phillip Pupuka. • 13:00: Vincent Nomae, Manager, Economics Department, CBSI. • 14:00 Ministry of Finance, Bryn Battersby. • Inspection of species trials at Honiara Golf Club. • Overnight Honiara Friday Honiara • 09:00 Meeting with Nicholas Wong at Omex sawmill th 19 • 11:00 Meeting with Austin Holmes, SFA (cancelled) • Carving Shops – market surveys • Visit Tropical Quality Furniture. Robert Wao. • Meeting with Alan Smith, WWF. • 13:30 Meeting with Margaret Salini, Director, Economics and Marketing Division, Ministry of Forestry • 15:00 Meeting with SIFMP (cancelled) • Market fuelwood inspections. • Overnight Honiara Saturday Canberra • Depart Honiara 14:30 hrs. (IE 700 14:30 HIR-BNE) th 20 • Return to Canberra (QF 959 1905 BRI-CAN)

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Annex 2 People Consulted

L.P Wong John Casey Chairman, Goodwood (Solomons) Limited Project Advisor, EU Sustainable Forestry and Conser- PO Box R89, Honiara Solomon Islands vation Project PO Box 1703, Honiara John Wong Solomon Islands Director, Top Timber Company P.O Box 1836. Honiara Julius Houria Solomon Islands Chief Forester (Utilisation), and Technical Advisor to Value Added Timber Association (VATA) Alan Smith Ministry of Forestry. Honiara, Solomon Islands WWF Forestry P.O Box 1373 Margaret Salini SIDT Building, Old China Town, Chief Forester (Marketing), Ministry of Forestry Honiara, Solomon Islands PO Box G24, Hoinara, Solomon Islands Andy Page Mark Rowbottom - Allegra Capital Operations Manager, Kolombangara Forest Products Allegra Capital Pty Ltd ACN 119 502 984 Limited Level 1, 173 Mounts Bay Road PO Box 382, Honiara, Solomon Islands PERTH WA 6000 Basil Gua Mr Austin Holmes Chief Forester (Reforestation and Research), General Manager , Earth Movers Group of Companies Ministry of Forestry Secretary, Solomon Islands Forest Association (SFA) PO Box G24, Honiara, Solomon Islands Honiara, Solomon Islands Mr Bruce Saunders, OBE Nicholas Wong, Managing Director Sawmill Sales Manager BJS Group of Companies OMEX Industry Limited Honiara, Solomon Islands PO Box R110, Honiara Solomon Islands Chris Vincent, Director, South Pacific Timber Peter Baldwin 12 Carr Rd, Mt Roskill, Auckland, NZ Technical Assistant to the Commissioner, SIFMP II. Honiara, Solomon Islands Dave Cooke Director & Captain , Silent World Shipping Peter Eddowes PO Box 202, Honiara, Solomon Islands Director, Asia Pacific Timber Consultants PO Box 383, Runaway Bay, Queensland 4216 Meyric Slimming Australia Director & Captain , Silent World Shipping PO Box 202, Honiara, Solomon Islands Peter Mussett Managing Director, The Woodage David Sadler 235-239 Old Hume Hwy Solomon Islands Customs and Excise Division PO Box 919 Mittagong, (RAMSI) NSW 2575 PO Box G16, Honiara, Solomon Islands Phil Bradford, Edward Kingmele Managing Director, Island Enterprise Ltd. Permanent Secretary, MoF PO Box 364, Honiara, PO Box G24, Honiara Solomon Islands Solomon Islands

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Robert Wao, Geoff Dennis Tropical Timbers Chairman of VETE PO Box 391, Honiara Greenpeace, SIDT Building Solomon Islands Old China Town, Honiara Solomon Islands Ross Andrewartha Team Leader, Solomon Islands Forest Management Harry & Serimah Jas Project II. Buni Milling and Reforestation Honiara, Solomon Islands Yacht Club Store, Noro, Solomon Islands Tim Blumfield Centre for Forestry and Horticultural Research, Griffith Malcolm Scott University, Brisbane Chairman, Imported Tropical Timbers Queensland 4111 Group of New Zealand . Australia Nanette Tatua Simon Le Gassicke Manager, TIMOL Enterprises General Manager, Kolombangara Forest Products Lim- Ranadi, Honiara ited Solomon Islands PO Box 382, Honiara Solomon Islands Reeves Moven Commissioner Ministry of Forestry Bekery Zonga PO Box G24, Honiara, Solomon Islands Office Manager of SIFMP II & Secretary of VATA. Wilco Bosma PO Box G24, Honiara, Team Leader Natural Resources Development Founda- Solomon Islands tion (NRDF) Gizo, Solomon Islands Vincent D. Nomae Manager, Economics Department Wryne and Reagan Lingisasa Central Bank of Solomon Islands Carver (Reagan) and carving sales (Wryne) PO Box 634, Honiara, Solomon Islands Gizo, Solomon Islands Brad Burns, Ken Groves NSW & Victoria Region Timber Purchasing Manager, Forestry Consultant & Bunnings Australia Honorary Fellow, ANU Canberra, Australia Bryn Battersby Economic Reform Unit Ian Sedger Ministry of Finance and Treasury Director Honiara, Solomon Islands Pentarch Forest Products Pty Ltd Melbourne Danny Kennedy Adventure Sports, Dan Raymond PO Box 21,Gizo, Former Team Leader of Solomon Islands Forest Solomon Islands Management Project Kununurra, W.A,

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Annex 3 Accessing China Customs Data

For log and sawn wood imports from the Solomon Islands Based on several liaisons with China Customs in January 2009 Prepared and submitted by: Eugenia Katsigiris

This annex is designed to enable the reader to order to information on the data options and steps to be taken data on log and sawn wood imports to China from the to place an order with China Customs, the annex also Solomon Islands, by understanding both the options provides data and simple analysis as a ‘case study’ of available and specific steps and costs of obtaining such an order of Chinese Customs data. The case study cov- data. As such, it aims to contribute to future efforts to ers logs and sawn wood imports from the Solomon determine prices at which timber products from the Islands into China in March 2008 and is based on data Solomon Islands are being sold into China. In addition obtained from China Customs in January 2009.

The contents covered in this annex are: 1. Types of Data Available and Product Categories Page 59 2. Liaison with China Customs and Ordering Data from Abroad 60 3. Price for Various Data from China Customs 61 4. Results from Case Study – March 2008 Data 62 5. Hong Kong Customs Data 67 Sub-annex A: Listing of China Customs Categories of Wood and Wood Objects 72 Sub-annex B: Data from China Customs (in format received) 83

sification for Chinese Customs Statistics; and these are 1. Types of data available and required as a first step in placing an order for customs product categories data. Chapter 44 of the document covers wood and wood products. In this section, China Customs lists 206 Types of Data: China Customs has a division known different codes (i.e. product categories), along with as ‘China Customs Statistics Consulting Office,’ from product descriptions for each. We have included this which customs data can be ordered. To order import or listing in full, along with our translation of those cate- export data (for which both volume and value is pro- gories of greatest interest (logs and sawn wood), in vided), one must designate China customs product ‘Sub-annex A to this annex). There are 28 categories classification code(s) and time period (which can be a listed for logs (all begin with the number 4403) and 28 month or a year for each item requested). In addition categories listed for sawn wood (all begin with the to designating the product classification code(s) and number 4407). Category numbers include 4-digit num- time period, one can also get more detailed data by bers (such as for logs and sawn wood as just men- country of origin and/or port of entry. One can even get tioned), 6-digit numbers, and 8-digit numbers. The a listing of top importers for particular products (from a categories with fewer digits encompass categories with particular country and/or though particular ports if de- more digits, so that the 8-digit numbers offer the most sired); and the order could include from 10 up to 500 of detailed segmentation of products. When placing an these companies (if there are that many for the particu- order with China customs, one can choose to order 4- lar product-country-port combination in question). digit, 6-digit, or 8-digit product categories, just so these Along with the listing of top importers, one can get are listed in the official classification as included in either the volume or value of imports by each importer Sub-annex A. China Customs has explained to us that during the designated time period. China Customs con- the 6-digit numbers comply with international stan- firmed that we cannot, however, pay double to get both dards, whereas the 8-digit numbers add finer segmenta- volume and value for the top importers, suggesting an tion specific to China’s own system. issue of commercial confidentiality. Finally, data for individual shipments cannot be provided. Port data is available on the level of customs jurisdic- tion ports, of which there are about 40 across the coun- Customs Product Classification Codes: China Cus- try, including inland ones. That is, a certain customs toms publishes (in Chinese only) a listing of its product jurisdiction may have several physical ports, but these classification codes in the document Commodity Clas- are managed as a single unit and customs data is pro-

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vided in aggregate for that unit. Examples of very ac- (ICBC), Beijing Station Branch tive ‘customs jurisdiction’ ports for timber products are Account number: 0200064709067006406 Huangpu in Guangzhou (Guangdong Province), Shenzhen in Shenzhen (also Guangdong Province), and Speed of filling an order: Numbers can be provided in Nanjing (Jiangsu Province). one or two business days. With a rush fee, they might be provided even more quickly. Recentness of Data: Data for a particular month is Format of data transmission, translation, and issue first available at the end of the following month. As of readability of files sent: The preference of China mentioned, data may be ordered for a particular month Customs is to transmit the data ordered through email. (or particular months) or for a particular year (or par- ticular years). For the current year, year-to-date data If the data reports are ordered in English, the price will can be ordered. The price for each number, whether it be 1.5 times the original price as displayed in the sub- is for a month or for a year, is the same. sequent section. Ordering all reports in English will certainly be the best option for non-Chinese speakers if 2. Liaison with China Customs and cost is not considered. On the other hand, this obvi- ously raises the price significantly and we may wish to ordering data from abroad consider if there are some cases in which, based on the Liaison with China Customs and Ordering Data various codes used and past reports received, a transla- from Abroad: Data can be ordered from China Cus- tion would not be necessary, since a non-Chinese toms from abroad through email liaison (if necessary speaker might be able to work out from the Chinese supplemented by phone calls). The price for orders document what all the numbers mean. For example, through email will be the same as the prices paid for one may be able to look at data for different product the in-person orders discussed in this document. Yet, if categories based on the product code numbers and, the orders are to be translated into English, the price based on past data received, decipher which data given will be 1.5 times the basic price described. Email ad- are volume and which are value (in USD). So far, all dresses for ordering are [email protected] (will put one in volume numbers for logs and sawn wood from the touch with a Ms. Wang who assisted in the orders de- Solomon Islands have been offered in cubic meters and scribed in this document) or [email protected]. Emails that this is still the case could be confirmed with the can be written in English, but it is recommended to person we order from through email in the future. Also, write in short, simple, and clear English to facilitate the ports, while listed in Chinese, have numerical codes speedy and accurate response. The phone numbers are as well. Finally, in terms of top importers, if the pur- +86-10-65195623 (press ‘1’), or +86-10-6519-5923. pose is not to have the importers name, but rather just One can ask for Ms. Wang, though others can help as get an idea of the value of each importer’s shipments of well. When one sends an email, one will first receive the month, then a translation of that may not be neces- an immediate automated response (in Chinese), which sary. An important point is that we have found the promises to answer within one working day. We found China Customs Consulting Office to be helpful in ex- that our emails were sometimes answered in one work- plaining things. Thus, if a full translation is not needed, ing day, but sometimes it took longer. Thus, a phone they may be willing to explain an item or two (e.g. a call is recommended to move things forward if a re- code number for a port) by phone. sponse is not received in, say, two working days. A further issue, however, that may make translation more necessary if corresponding by email is that the China Customs Statistics Consulting Office (which Chinese in the Chinese language files transmitted by handles the sale of China Customs’ import and export customs are not readable on all computers. That is, for data) is located in a side building of the China Customs data received to date and using an English Windows headquarters in Beijing at 6 Jianguomennei Daijie, just operating system, we could easily see all numbers and inside the second ring road and north of Beijing Train read English words such as ‘Solomon Islands’, but the Station (the older one). They hold drop-in hours from 9 Chinese characters were rendered unreadable. Because am to 11 am only, weekdays, but accept calls during all we were able to visit China Customs in person, they working hours. (We found at times that we could not offered us a readable printout. When we asked them always reach someone immediately by phone, though about the origins of the problem, however, Consulting this may be due to the upcoming Chinese New Year.) Customs told us that this is often the case when for- Payment method: Purchases made from abroad can be eigners order data, even if they speak good Chinese paid for by bank transfer. Payments made within China (and thus presumably have the software for reading can be made directly at China Customs Statistics Con- Chinese on their computers). The conclusion they of- sulting Office. Bank transfer payment should be made fered is that this is not a software application issue (i.e. to the following account: it’s not the case that we could just order new software to solve the problem), but has to do with the English Name: Beijing Zhonghaitong Keji Company, Ltd. versus Chinese Windows operating systems. Given the Bank: Industrial and Commercial Bank of China situation, customs was willing to print out the files for

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us this time, but this may not be practical from a dis- country of origin. While this is less relevant to us, since tance. Yet, faxing may be a possibility. Another option we would likely always be designating the country of may be to ask customs to create a PDF file and see if origin (Solomon Islands), for reference, examples of the Chinese is readable in it. At this point, they were prices without country of origin are as follows: For not willing to commit to these possibilities without a imports (or exports) for a particular product code dur- real situation at hand, but these are perhaps options to ing a particular time period (and giving you both vol- discuss with them further if it is decided that in some ume and value), the price is 10 RMB. Data by port only cases we could do without the translation, but would designating the product code and time period would be only 20 RMB per designation (also giving you both like to be able to see the Chinese characters. volume and value for all ports in China through which For more discussion on the translation and readability that product passes – so several value-volume sets of issues, the best contact is probably Ms. Wang, whose numbers if the product is entering/existing China contact information is given above. through multiple ports). Listing the top 10 importing companies for a particular product code and particular time period would be 100 yuan (with no segmentation 3. Price for various data from China by country of origin or port). You could request either Customs volume or value (but not both) to go along with these In this section, we present the prices for acquiring top 10 importers raising the price to 200 yuan. China Customs data as quoted to us by China Customs The following price table (and the two notes following in January 2009. Pricing can be complex and rises it) offer the prices most relevant to us for further work. quickly as you add more parameters to your request. These prices in all cases are higher than those indicated The cheapest requests are those that are very simple, above as they designate country of origin (the Solomon such as volume and value for a particular product code Islands). during a particular time period without designating Exhibit 1. Price table

Item Price (for data reports in Chinese) By product: volume and value by product category number 20 RMB per product category (they also give you the total of for particular exporting country China’s imports aggregated for all countries of origin for this product category) By ports (all relevant ports included): volume and value for 100 RMB per product category (gives you the volume and imports, broken down by ports, for a particular product from a value of that product entering each port that is relevant) particular exporting country Top 10 importers by volume or value (without designation 700 RMB per product category – will give you the name of the of port) for a particular product category from a particular top ten importers as well as either the value or volume for each exporting country – Note: can only choose volume or value importer during the time period of interest (but will not break it and not both down by port) Top 10 importers by volume or value for each port that is 1500 RMB per product category – will give you the name of relevant for a particular product category from a particular the top ten importers for each port through which that product exporting country – Note: can only choose volume or value flows in, as well as either the value or volume for each im- and not both porter during the time period of interest Note 1 - Extra service fee: 120 RMB per order. If more than one order placed per month, service fee for first order is 120 RMB and for subsequent orders it is 70 RMB. Note 2 - Translation Fee: If the data reports are ordered in English, the price will be 1.5 times the original price as calculated above. That is, first calculate the cost of the order from Exhibit 1, then add the 120 RMB service fee, and then multiply the total by 1.5. 4. Case study results Data obtained for China’s imports from the Solomon Islands for the period March 2008 Data was purchased for the period of March 2008. We purchased the data in two phases, using the first phase to inform our second phase purchase. In the first phase, we ordered value/volume data for the period March 2008 for all categories of logs in the Commodity Clas- sification listing (see Sub-Annex A) we found to be of potential interest. We also ordered volume/value data by ports for 4403 (the general log category) to see which ports were the most active in terms of Solomon

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Island imports. From this first phase, we found that the • Ports: product import categories for logs and sawn wood con- o All log imports from the Solomon Islands dur- taining Solomon Island imports are very limited indeed ing the period came through either Nanjing and that only two ports were involved in log imports in Port (93.6% by volume) or Huangpu Port March 2008. In the next phase, we drilled down further (6.4% by volume) for the top product categories to see their ports of entry. As all logs imports were in the category of And, for the top (and only) 8-digit log category for o ‘other non-coniferous logs’ the port break- imports from the Solomon Islands, we requested the down for ‘other non-coniferous logs’ is the top 10 importers by port and requested the value of same as that given above for logs as a their imports in March 2008 as well. whole. From the results (displayed in detail in subsequent ex- o For the 184 m3 of sawn wood made from hibits), we see that in March 2008: Merbau (kwila, which represents 86% of China’s sawn wood imports by volume from • Logs: All logs from the Solomon Islands entering the Solomon Islands), 84% came through China in March 2008 are lumped into one 8-digit Shanghai Port and 16% came through Shantou category: ‘logs of those non-coniferous tree types Port (in Guangdong Province) not listed’ (‘not listed’ indicates those types not in- • Requesting the top ten importers by value for each cluded in other eight-digit categories). The value port importing logs (all of which are in the eight- of these totaled US$23.695 million or an average digit category ‘non-coniferous tree types not price of $186.57 per cubic meters. All other log listed’), we found that there were 9 importers in categories of eight digits showed zero imports March 2008 for Nanjing Port and just one importer from the Solomon Islands. for Huangpu Port. • Sawn wood: Sawn wood imports from the Solo- o The top importer of Solomon Island logs into mon Islands totaled only 215 m3 with a value of Nanjing Port shipped in a CIF value of $5.2 $97,603. Of this, 86% was in the six digit category million, which was 23.4% of the total value of 440729 (‘sawn wood made of other tropical Solomon logs into Nanjing port that month. wood’); and the full amount in this six digit cate- o Although you cannot order both volume and gory was also in the eight digit category 44072930 value for the importers, because there was (‘sawn wood made from Merbau (kwila)’), indicat- only one importer for Huangpu port that ing 86% of the sawn wood imports were Merbau month and we had requested the value through (kwila). Huangpu in a different data request, we can infer that the one importer through Huangpu imported 8,093 m3 of Solomon Island logs for an average price of $147.99 in March 2008. It would be interesting to ask ourselves whether this is likely to represents one shipment and one type of logs, in which case we can use this information to infer price for a particular tree type/grade.

The data obtained from China Customs is given in its original form in Sub-annex B. In this section, in Exhib- its 2 through 6, we display the data in more readable form along with some simple analysis (including aver- age prices and percent of total volumes or values, such as percent of total volume from the Solomon Islands or total value through a particular port, etc.).

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Exhibit 2. Log imports (4403) from the Solomon Islands (213) to China by port, March 2008

Item Volume Value Average price (calculated Fraction of (m3) (CIF in USD) from foregoing figures) total volume Nanjing Port: Solomon log imports through Nan- 118,913 $22,497,714 $189.19 per m3 93.6% of jing Port (in Nanjing, Jiangsu Province) volume from SI Huangpu Port: Solomon log imports through 8,093 $1,197,720 $147.99 per m3 6.4% of vol- Huangpu Port (in Guangzhou, Guangdong Prov- ume from SI ince) Overall log imports from Solomon Islands 127,006 $23,695,434 $186.57 per m3 100% of volume to China from SI Source: China Customs

Exhibit 3. China’s log and sawn wood imports from Solomon Island (and compared to China’s total imports in these categories), March 2008

Item Volume Value Average price Percent of Fraction of China’s (m3) (CIF in USD) (calculated from total volume imports in category foregoing) from SI by volume LOGS 4403 ‘logs, whether or not de-barked or 127,006 $23,695,434 $186.57 per m3 100% 3.9% roughly sawn into blocks’ from SI (log) 4403 China total 3,288,162 $557,528,979 $169.56 per m3 ------

44039990 (‘logs of those non-coniferous 127,006 $23,695,434 $186.57 per m3 100% (logs) 21% tree types not listed’) from SI 44039990 China total 604,395 $135,947,161 $224.93 per m3 ------

SAWN WOOD 4407 (‘sawn wood: wood sawn or 215 $97,603 $453.97 per m3 100% (sawn <0.1% chipped lengthwise, sliced or peeled, with wood) thickness > 6 mm’) from SI 4407 China total 583,345 $160,336,546 $274.86 per m3 ------

440729 (‘Sawn wood: wood sawn or 184 $88,259 $479.67 per m3 86% 0.6% chipped lengthwise, sliced or peeled, with (sawn thickness > 6 mm that is made of other wood) tropical woods’) from SI 440729 China total 30,293 $17,817,520 $588.17 per m3 ------

44072930 (‘sawn wood: wood sawn or 184 $88,259 $479.67 per m3 86% 2.6% chipped lengthwise, sliced or peeled, with (sawn thickness > 6 mm that is made of merbau wood) (kwila)’) from SI 44072930 China total 7,096 $4,166,350 $587.14 per m3 ------

Source: China Customs

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Exhibit 4. China’s total log and sawn wood imports in categories checked, but for which there were no imports from the Solomon Islands, March 2008

Item Volume Value Average price (calcu- Fraction of (m3) (CIF in USD) lated from foregoing) China’s total vol- ume of logs or sawn wood LOGS 44034100 ‘Logs of Meranti wood (dark red, 7,743 $1,765,434 $228.00 per m3 0.2% light red, and Bakau meranti)’ of logs 440349 ‘Logs of other tropical woods listed in 231,681 $73,972,828 $319.29 per m3 7.0% explanatory note 1 of this section’ of logs 6,711 $4,745,007 $707.05 per m3 0.2% 44034910 ‘Logs of teak wood’ of logs 44034930 ‘Logs of Dipterocarpus spp. Keru- 41,605 $9,739,522 $234.09 per m3 1.3% ing’ of logs 44034940 ‘Logs of kapur (Dryobalanops 12,486 2,988,510 $239.35 per m3 0.4% spp.)’ of logs 10,401 $4,630,162 $445.17 per m3 0.3% 44034950 ‘Logs of Intsia spp. (mengaris)’ of logs 44034960 ‘Logs of Koompassia spp. (mengaris 9,514 $1,588,626 $166.98 per m3 0.3% or kempas)’ of logs

3,263 $786,166 $240.93 per m3 <0.1% 44034970 ‘Logs of Anisopter spp.’ of logs 44034990 ‘Logs of tropical woods not listed in 42,982 $17,222,698 $400.70 per m3 1.3% explanatory note 1 of this section’ of logs 17,366 $21,213,722 $1,221.56 per m3 0.5% 44039930 ‘Logs of mahogany’ of logs

SAWN WOOD 44072600 ‘Sawn wood: wood sawn or chipped 2,781 $796,265 $286.23 per m3 0.5% lengthwise, sliced or peeled, with thickness > 6 of sawn wood mm that is made of yellow Meranti and other woods’ 44072910 ‘Sawn wood: wood sawn or chipped 4,356 $2,894,437 $664.47 per m3 0.8% lengthwise, sliced or peeled, with thickness > 6 mm that is made of teak’ 44072920 ‘Sawn wood: wood sawn or chipped 233 $264,608 $1,135.66 per m3 <0.1% lengthwise, sliced or peeled, with thickness > 6 mm that is made of African mahogany’ 44072990 ‘Sawn wood: wood sawn or chipped 18,608 $10,492,125 $563.85 per m3 3.3% lengthwise, sliced or peeled, with thickness > 6 mm that is made of other tropical woods’ 44079910 ‘Sawn wood: wood sawn or chipped 4,606 $4,018,453 $872.44 per m3 0.8% lengthwise, sliced or peeled, with thickness > 6 mm that is made of camphor, nanmu, or rose wood’ Source: China Customs

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Exhibit 5. Forest product from the Solomon Islands (213) to China by port for top two product categories, March 2008

Port/Product category Volume Value Average price (calcu- Fraction of total (m3) (CIF in USD) lated from foregoing volume from SI figures) 4403990: LOGS OF THOSE NON- CONIFEROUS TREE TYPES NOT LISTED Nanjing Port (Jiangsu Province) 118,913 m3 $22,497,714 $189.19 per m3 93.6% Huangpu Port (in Guangzhou, 8,093 m3 $1,197,720 $147.99 per m3 6.4% Guangdong Province) All ports (total) 127,006 m3 $23,695,434 $186.57 per m3 100% of volume from SI 44072930: SAWN WOOD MADE FROM MERBAU (KWILA), THICKNESS >6 MM Shanghai Port 155 m3 $70,021 $451.75 per m3 84% Shantou Port (Guangdong Province) 29 m3 $18,238 $628.90 per m3 16% All ports (total) 184 m3 $88,259 $479.67 per m3 100% Source: China Customs

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Exhibit 6. Top ten importers of 4403990 (‘Logs of those non-coniferous tree types not listed’) from SI (which also accounts for all SI log imports to China that month) by port, March 2008

Port/Product category Volume Value Average price (calcu- Fraction of total (m3) (CIF in USD) lated from foregoing value from SI figures) through respective port

NANJING PORT (Nanjing, Jiangsu Province) 1. Rizhao Meihua Trade Co., Ltd. NA $5,273,671 NA 23.4% 2. Ningbo City Hongguang Decoration NA $3,891,606 NA 17.3% Materials Co., Ltd. 3. Jiangsu Shuntian International Group NA $3,137,317 NA 13.9% Machinery Import Export Stock Co., Ltd. 4. Jiangsu Shuntian Machinery Import Co., NA $2,768,311 NA 12.3% Ltd. 5. Shanghai Shangshi International Trade NA $2,578,605 NA 11.5% (Group) Co., Ltd. 6. Jiangdu City Wanxin Wood Industry NA $2,484,199 NA 11.0% Co., Ltd. 7. Jiangsu Kaiyuan International Group NA $1,311,413 NA 5.8% Co., Ltd. 8. Jiangsu Jianglong Import Export Trade NA $738,817 NA 3.3% Co., Ltd. 9. Ningbo Hengli Wood Industry Co., Ltd. NA $313,775 NA 1.4% Other importers*: portion of total through 0 0 --- 0 Nanjing Port not included in above nine Total through Nanjing Port 118,913 $22,497,714 $189.19 100%

HUANGPU PORT (Guangzhou, Guangdong Province) 1. Foshan City Shunde District Dongshun 8,093 (inferred) $1,197,720 $147.99 100% Wood Industry Co., Ltd. Total through Huangpu Port 8,093 $1,197,720 $147.99 100% Source: China Customs *Note: Our understanding is that we were to get the top ten importers through each port. When we saw a total of only ten for both ports, we thought there had been a misunderstanding, but totalling the numbers we can see that it is just a coincidence that there were only a total of nine from the first port and one from the second port.

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5. Hong Kong data log imports) and imports in only one of the sawn wood categories (non-coniferous sawn wood) from Key findings on Hong Kong data are given in the bul- the Solomon Islands that month. lets below, with more details in the text and table fol- o The cost of such data (non-coniferous sawn lowing: wood imports from the Solomon Islands in March 2008) will be HK$16, indicating that it • Data of Hong Kong’s imports from the Solomon takes up one page or less. Islands is not included in the data from China Cus- toms and instead will need to be sourced from the o The statistician responding to our request in- Hong Kong Census and Statistics Department. dicates they can provide only information on aggregate value and aggregate quantity (by • Inquiries for data can be directed to month or year and by country of origin, if de- [email protected] (phone: 852-2582-4915). sired) for each customs category. She indi- • The price of data is Hong Kong $16 per page, cates that they cannot provide information by which can be emailed in a PDF file format (fulfill- trader or by shipment. From previous phone ing requests for excel file format will be much communications, we had the impression that more expensive). As noted further below, how- provision of information on importers may be ever, some data may be available for free. possible. We also understand that the Depart- ment may entertain some special requests. Payment can be made by money transfer in o Thus, once the team has confirmed the nature Hong Kong dollars to the following account: of its ‘dream data,’ it may be worth enquiring o Bank Name & Address: The Hong by phone again to double check. Kong and Shanghai Banking Corpora- o Available statistics are based on infor- tion Limited, 1 Queen’s Road, Central, mation contained in import/export dec- Hong Kong larations lodged by traders. As traders o Bank Swift Code: HSBCHKHH are allowed by law up to 14 days to o Account Name: The Government of the lodge the declarations from the date of Hong Kong Special Administrative Re- importation/exportation, there may be a gion Treasury No.1 Collection Account slight time lag between the month of (Census and Statistics Department) shipment and the month indicated in the o Account No.: 002-268126-008 trade statistics. The handling fee required by banks for wire o o The statistician handling our request through transfers is not included in the Department’s the email address given above charges of HK$16 per page. Thus, it is rec- ([email protected]) for March 2008 data ommended that we consult the bank regarding is named Ms. Jennifer Wong. Her phone num- the handling fee and have that credited direct ber is ++852-2582-4914. As she has already from our bank account. looked into the March 2008 case study re- o After the transfer, a copy of the bank receipt quest, she would probably be the best person should be sent to the Department by fax (852- to deal with if a decision is made to go 2802-1101) or email ([email protected]). through with ordering this data. Upon receipt of payment, the requested trade • Import statistics are published in the free monthly statistics will be sent as soon as possible. publication ‘Hong Kong Merchandise Trade Sta- o The Department indicates that the HK$16 cost tistics – Imports,’ which is available free for is on a single user basis and that in the case of download at duplication or transfer of the data in whole or http://www.censtatd.gov.hk/products_and_services part to any person, company, or organization, /products/publications/statistical_report/external_tr prior consent of the Department should be ob- ade/index.jsp Current month and year-to-date fig- tained. ures are shown in each issue. The data is less • Another division of the Hong Kong Census and finely divided than the for-purchase data and is Statistics Department provided us with a method country of consignment rather than of origin, but of identifying all log and sawn wood categories as may meet our requirements. We have found that delineated by Hong Kong Customs and as would data is available for a month or period just about be needed to make a data request. These include two months after the end of that month or period. seven log categories and fourteen sawn wood cate- o Statistics contained in the publications are gories as given in a table later in this section. classified by SITC codes (each SITC code • Preliminary queries regarding case study data for may include a few HS codes) and country of March 2008 for imports from the Solomon Islands consignment (the country from which the (as country of origin) revealed that Hong Kong commodity is imported into Hong Kong, not had no imports in the seven log categories (so no necessarily the country of origin). So the ad-

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vantage of purchased statistics is the finer de- organization. Yet, upon contact with Hong Kong Cus- gree of classification and confirmed country toms (www.customs.gov.hk and telephone 852-2815- of origin. 7711), we were told that Hong Kong Customs does not o The mapping between SITC and HS (which provide the kind of numbers we seek (even for a fee), are the more detailed codes we provide below but that we should contact Hong Kong’s ‘Census and and those on which the for-purchase data is Statistics Department’ to see if they have this type of based) are given at the end of the publication information available. ‘Hong Kong Merchandise Trade Statistics Classification’, which can also be downloaded Calls to the Hong Kong Census and Statistics Depart- at ment confirmed that we can indeed obtain wood prod- http://www.censtatd.gov.hk/products_and_ser uct data by country of origin from them. The website of vices/products/publications/classification_lists the department is http://www.censtatd.gov.hk. The key /index.jsp. We provide the mapping for HS contact point we have found within the Department is heading 4403 (logs) and 4407 (sawn wood) to the Data Enquiry Service for ‘Merchandise Trade Sta- SITC below our customs categories table. The tistics’, which can be reached at headquarters in results show that there are four SITC catego- Wanchai with the phone number 852-2582-4915 and ries for seven HS log categories and two SITC email [email protected]. We called this number categories for 14 HS sawn wood categories. and were told that the Department can provide data and charges HK$16 per page. They can provide informa- In terms of case study data, according to the o tion on quantity and value and country of origin. We publications indicated: were also told that they may be able to provide the In Jan. – Nov. 2008, there were no log o names of top importers, though subsequent email imports from the Solomon Islands. communication (as indicated in our key points above) There were sawn wood imports in the indicates this may not be the case. To determine how SITC category 24840 (non-coniferous many pages (and thus how much total cost) might be sawn wood with thickness greater than 6 involved, we would need to send an email detailing the mm) during the period of 452 m3, with data request to the foregoing email address. Initially, a value of HK$2,410,000 (about while we are not sure how much will fit on one page, it US$308,974 or average of US$684 per seems that this data will not be very expensive, if in- m3). None of these imports took place deed the data pre-exists in the format we desire. (One in November. advantage we have found over the charging method of o In March 2008, there were no log im- China Customs is that the Hong Kong organization will ports from the Solomon Islands; and tell you in advance if there were no imports in a certain coniferous sawn wood imports in SITC category for your time period of interest, rather than category 24840 were 87 m3 with a charging you for checking. Thus, they will only charge value of HK$558,000 (about you for those categories in which there were imports.) US$71,538 or average $822 per m3). If, however, the Hong Kong data needs to be prepared • This compares to (as indicated in a from scratch, the cost may be higher. Finally, also as previous section) 215 m3 of sawn mentioned, data with a less fine degree of detail and wood valued at US$97,600 or with country of consignment (from which imports are US$454/m3 imported into China made) rather than country of origin are available for from the Solomon Islands in March free in reports posted on the internet. 2008. Log imports from the Solo- The Enquiry service asked that we obtain the eight mon Islands into China for the same digit Hong Kong Customs code numbers for our prod- period were 127,006 m3 with total ucts of interest before getting back in touch with our value of about US$23.7 million or data purchase request. To get the product codes for timber products, we were referred to another part of the $187/m3. Department (reached at 852-2877-1818, press 3 for Additional details on findings and the steps we went English and then 1131). We spoke to a Mr. Wu, whose through to get to these are as follows: direct number is 852-2582-4912, to get the full set of While China Customs can provide information on eight-digit code numbers for logs and sawn wood, Mainland China’s imports from and exports to Hong which appear to be somewhat different than those used Kong, they told us we would have to contact Hong in Mainland China. (He actually provided us with a Kong Customs to get Solomon Islands-Hong Kong specific search method to get these listed from their data. China Customs further told us that Hong Kong website. For logs, we were to search for ‘wood’ and Customs has an organization from which we can pur- then choose the segment of seven listings from the chase data similar to China Customs Statistics Consult- search returns that covered logs. For sawn wood, we ing Office, but did not have further information on this were to search for ‘sawn wood’ and to then choose the

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segment of 14 relevant listings.) After review of the ume of data that can be easily retrieved might be pro- code numbers (given in the exhibit below), the next vided free of charge in one working day. Larger vol- step is to decide which numbers to order and then pro- umes in the form of photocopies of tabulations or ceed with contacting the enquiry division. magnetic diskettes/CD-ROM might be provided at charge. Users might also copy the data themselves Both of the persons with whom we talked on the phone (with no charge) if they come to the office. If requests (a women handling enquiries for data purchase and a for statistics not readily available from standard tabula- gentleman handling our questions on customs catego- tions are made, these will be considered at a charge ries) spoke English well enough to get the message based on the level of analysis required as well as con- clearly across, though sometimes questions or words siderations of confidentiality.’ Yet, from our direct had to be repeated. enquiry described above, it seems that for long- Other information we have gathered about the Data distance ordering, a Hong Kong $16 fee per page will Enquiry Service of the Hong Kong Census and Statis- be assessed; and the special requests (on importers or tics Department includes the following, although this individual shipments) we may have might not be some- was not confirmed from our experience: ‘A small vol- thing that the Department can provide to us.

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Exhibit 7. Hong Kong Commodity Codes Note: In contrast to China, all categories are eight digits. While some seem to encompass other ones (such as the first one, 44031000, which seems like China’s 4403) our initial impression is that the imports included in each category are distinct. Further confirmation on this issue, however, may be needed.

Code Description Units

Logs 44031000 Wood in the rough, whether or not stripped of bark or sapwood or roughly squared, treated m3 with paint, stain, creosote or other preservatives 44032000 Coniferous wood in the rough, whether or not stripped of bark or sapwood or roughly m3 squared, not treated 44034100 Dark red meranti, light red meranti and meranti bakau in therough, whether or not stripped of m3 bark or sapwood or roughlysquared, not treated 44034900 Other tropical wood in the rough, whether or not stripped of bark or sapwood or roughly m3 squared, nesoi 44039100 Oak (Quercus spp.) Wood in the rough, whether or not stripped of bark of sapwood, or m3 roughly squared, not treated 44039200 Beech (Fagus spp.) Wood in the rough, whether or not stripped of bark or sapwood, or m3 roughly squared, not treated 44039900 Non-coniferous wood in the rough, nesoi, whether or not stripped of bark or sapwood, or m3 roughly squared, not treated

Sawn wood 44071000 Coniferous wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44072100 Mahogany (Swietenia spp.), sawn or chipped lengthwise, sliced or peeled, whether or not m3 planed, sanded or end-jointed, of a thickness exceeding 6 mm 44072200 Virola, imbuia and balsa, sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44072500 Dark red meranti, light red meranti and meranti bakau, sawn or chipped lengthwise, sliced or m3 peeled, whether or not planed, sanded or end-jointed, of a thickness exceeding 6 mm 44072600 Tropical wood sawn or chipped lengthwise, sliced or peeled whether or not planned etc., of m3 white lauan, white meranti, white seraya, yellow meranti and alan, over 6 mm thick 44072700 Sapelli, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end- m3 jointed, of a thickness exceeding 6 mm 44072800 Iroko, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or end- m3 jointed, of a thickness exceeding 6 mm 44072900 Tropical wood, sawn or chipped lengthwise, sliced or peeled,whether or not planed, sanded or m3 end-jointed, of a thickness exceeding 6 mm, nesoi 44079100 Oak (Quercus spp.), sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44079200 Beech (Fagus spp.), sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44079300 Maple (Acer spp.), sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44079400 Cherry (Prunus spp.), sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44079500 Ash (Fraxinus spp.), sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm 44079900 Non-coniferous wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, m3 sanded or end-jointed, of a thickness exceeding 6 mm, nesoi

Exhibit 8. Mapping of HS Codes Above to SITC Codes, the latter for which annually and montly import data is available free on the internet

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SITC Code HS Code

Logs Logs 24730 4403 1000 24740 4403 2000 24750 4403 4100; 4403 4900 24790 4403 9100; 4403 9200; 4403 9900

Sawn wood Sawn wood 24820 4407 1000 24840 4407 2100; 4407 2200; 4407 2500; 4407 2600; 4407 2700; 4407 2800; 4407 2900; 4407 9100; 4407 9200; 4407 9300; 4407 9400; 4407 9500; 4407 9900

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Sub-annex A: China Customs categories of wood and wood products

Line Code Chinese description English description Units 1 44 第44章 木及木制品；木炭 Section 44: wood and wood products; charcoal --- 2 4401 薪柴；木片或木粒；锯末、木废料及碎片 Fuel wood; wood chips or wood particles; sawdust, wood waste, and kg wood scraps 3 Fuel wood (pieces of round wood, blocks, sticks, bundles, or similar kg 44011000 薪柴（圆木段、块、枝、成捆或类似形状） shapes) 4 44012100 针叶木的木片或木粒 Wood chips or particles made of coniferous wood kg 5 44012200 非针叶木的木片或木粒 Wood chips or particles made of non-coniferous wood kg 6 44013000 锯末、木废料及碎片 Sawdust, wood waste, and wood scraps kg 7 Charcoal (including that made from fruit peels and kernels), whether or kg 4402 木炭（包括果壳炭及果核炭），不论是否结块 not it is formed into blocks 8 44021000 竹炭，不论是否结块 Bamboo charcoal, whether or not it is formed into blocks kg 9 44029000 其他木炭，不论是否结块 Other charcoal, whether or not it is formed into blocks kg 3 10 4403 原木，不论是否去皮、去边材或粗锯成方 Logs, whether or not de-barked or roughly sawn into blocks m or kg 11 Logs that are painted or have been treated with coloring agents, cresol oil, m3 or kg 44031000 用油漆、着色剂、杂酚油等防腐剂处理的原木 preservatives, etc. 12 Other, coniferous logs m3 or kg 440320 其他，针叶木原木

13 Logs of Pinus koraiensis (Korean pine) and Pinus sylvestris (Mongolian m3 or kg 44032010 红松和樟子松原木 scotch pine) 3 14 44032020 白松（云杉和冷杉）原木 Logs of white pine (spruce or fir) m or kg 15 Logs of radiata pine m3 or kg 44032030 辐射松原木

16 Logs of larch m3 or kg 44032040 落叶松原木

17 Logs of those coniferous tree types not listed. m3 or kg 44032090 未列名针叶木原木

3 18 44034100 （深红色、浅红色及巴栲）红柳安木原木 Logs of meranti wood (dark red, light red, and Bakau meranti) m or kg 3 19 440349 其他本章子目注释1所列热带木原木 Logs of other tropical woods listed in explanatory note 1 of this section m or kg

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Line Code Chinese description English description Units

20 Logs of teak wood m3 or kg 44034910 柚木原木

21 Logs of okoume wood m3 or kg 44034920 奥克曼木Okoume（奥克榄）原木

3 22 44034930 龙脑香木Dipterocarpus spp.克隆木原木 Logs of Dipterocarpus spp.keruing m or kg 23 Logs of kapur (Dryobalanops spp.) m3 or kg 44034940 山樟木（香木Dryobalanops spp.）原木

24 Logs of Intsia spp. (mengaris) m3 or kg 44034950 印加木Intsia spp.（波罗格Mengaris）原木

25 Logs of Koompassia spp. (mengaris or kempas) m3 or kg 44034960 大干巴豆木（门格里斯或康派斯）原木

26 Logs of Anisopter spp. m3 or kg 44034970 异翅香木Anisopter spp.原木

3 27 44034990 未列名本章子目注释1所列热带木原木 Logs of tropical woods not listed in explanatory note 1 of this section m or kg 3 28 44039100 栎木(橡木）原木 Logs of oak wood m or kg 3 29 44039200 山毛榉木原木 Logs of beech wood m or kg 3 30 440399 其他非针叶木原木 Logs of other non-coniferous tree species m or kg 31 Logs of nanmu (Phoebe nanmu) m3 or kg 44039910 楠木原木

3 32 44039920 樟木原木 Logs of camphorwood m or kg 33 Logs of mahogany m3 or kg 44039930 红木原木

34 Logs of paulownia wood m3 or kg 44039940 泡桐木原木

35 Logs of ash wood m3 or kg 44039950 水曲柳原木

36 Logs of North American hard woods/broad-leafed tress (including cherry m3 or kg 44039960 北美硬阔叶木（包括樱桃木等）原木 wood, etc.) 3 37 44039980 未列名的温带非针叶木原木 Logs of those temperate non-coniferous tree types not listed. m or kg

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Line Code Chinese description English description Units 38 44039990 未列名非针叶木原木 Logs of those non-coniferous tree types not listed. m3 or kg 39 Hoop wood; split poles; piles, pickets, and stakes of wood; wooden sticks; kg chip wood and the like, etc. 4404 箍木、木劈条、木桩、木片及粗修整的木棒等

40 Hoop wood; split poles; piles, pickets, and stakes of wood; wooden sticks; kg chip wood and the like, etc. – all of which when made from coniferous 44041000 针叶木箍木、木劈条、木片及粗修整的木棒等 wood

41 Hoop wood; split poles; piles, pickets, and stakes of wood; wooden sticks; kg chip wood and the like, etc. – all of which when made from ‘other wood’ 44042000 其他木箍木、木劈条、木片及粗修整的木棒等 (i.e. non-coniferous wood)

42 Wood wool; wood flour kg 4405 木丝；木粉

43 44050000 木丝；木粉 Wood wool; wood flour kg 44 Railway and tramway sleepers (cross-ties) of wood m3 4406 铁道及电车道枕木

45 Railway and tramway sleepers (cross-ties) of wood that have not been m3 44061000 未浸渍铁道及电车道枕木 impregnated/filled 46 Railway and tramway sleepers (cross-ties) of wood that have been im- m3 44069000 已浸渍铁道及电车道枕木 pregnated/filled 47 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 4407 经纵锯、纵切、刨或旋切的木材，厚＞6mm thickness > 6 mm 48 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 440710 经纵锯、纵刨旋切的针叶木木材，厚＞6mm thickness > 6 mm that is made of coniferous wood 49 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44071010 纵锯纵切刨或旋切红松和樟子松木材,厚＞6mm thickness > 6 mm that is made of Korean pine and Mongolia scotch pine 50 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44071020 纵锯切刨或旋切白松(云、冷杉)木材,厚＞6mm thickness > 6 mm that is made of white pine (spruce and fir) 51 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44071030 纵锯、纵切刨或旋切的辐射松木材，厚＞6mm thickness > 6 mm that is made of radiata pine 3 52 44071040 经纵锯、纵切刨或旋切的花旗松木材,厚＞6mm Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m or kg

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Line Code Chinese description English description Units thickness > 6 mm that is made of Douglas-fir

53 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44071090 其他纵锯切、刨或旋切的针叶木木材,厚＞6mm thickness > 6 mm that is made of other conifers

54 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072100 经纵锯切刨或旋切的美洲桃花心木材,厚＞6mm thickness > 6 mm that is made of North American mahogany 55 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072200 经纵锯切刨或旋切的肉豆蔻木等木材,厚＞6mm thickness > 6 mm that is made of virola, etc. wood 56 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg thickness > 6 mm that is made of dark or light red meranti and meranti 44072500 经纵锯切刨或旋切的红柳安木材，厚＞6mm bakara

57 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072600 纵锯切刨或旋切的白黄柳安木等木材,厚＞6mm thickness > 6 mm that is made of yellow meranti and other woods

58 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072700 纵锯切刨或旋切的沙比利木材,厚＞6mm thickness > 6 mm that is made of sapele wood. 59 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072800 纵锯切刨或旋切的伊罗科木木材,厚＞6mm thickness > 6 mm that is made of iroko (African teak)

60 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 440729 其他经纵锯切刨或旋切的热带木木材,厚＞6mm thickness > 6 mm that is made of other tropical woods 61 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072910 经纵锯切刨切或旋切的柚木木材,厚＞6mm thickness > 6 mm that is made of teak 62 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072920 纵锯切刨或旋切非洲桃花心木木材,厚＞6mm thickness > 6 mm that is made of African mahogany 63 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44072930 经纵锯切、刨或旋切的波罗格木木材,厚＞6mm thickness > 6 mm that is made of merbau (kwila) 64 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg thickness > 6 mm that is made of other tropical woods 44072990 其他纵锯切、刨或旋切的热带木木材,厚＞6mm

65 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079100 经纵锯纵切、刨或旋切的栎木木材,厚＞6mm thickness > 6 mm that is made of oak

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Line Code Chinese description English description Units 66 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079200 经纵锯纵切、刨或旋切山毛榉木木材,厚＞6mm thickness > 6 mm that is made of beech 67 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079300 经纵锯纵切、刨或旋切枫木木材,厚＞6mm thickness > 6 mm that is made of maple 68 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079400 经纵锯纵切、刨或旋切樱桃木木材,厚＞6mm thickness > 6 mm that is made of cherry wood

69 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079500 经纵锯纵切、刨或旋切白蜡木木材,厚＞6mm thickness > 6 mm that is made of ash 70 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 440799 其他纵锯切刨或旋切的非针叶木木材,厚＞6mm thickness > 6 mm that is made of non-coniferous wood 71 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079910 纵锯切刨或旋切的樟木、楠木、红木,厚＞6mm thickness > 6 mm that is made of camphor, nanmu, or rose wood 72 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079920 经纵锯切、刨或旋切的泡桐木木材，厚＞6mm thickness > 6 mm that is made of paulownia wood 73 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079930 经纵锯切、刨或旋切的北美硬阔叶材,厚＞6mm thickness > 6 mm that is made of North America hardwood/broadleaf 74 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079980 纵锯切刨或旋切其他温带非针叶木材,厚＞6mm thickness > 6 mm that is made of other temperate non-coniferous woods 75 Sawn wood: wood sawn or chipped lengthwise, sliced or peeled, with m3 or kg 44079990 其他纵锯切、刨或旋切的非叶木木材,厚＞6mm thickness > 6 mm that is made of the wood of other leaf-less tress

76 Sheets for veneering, plywood, or other similar laminating wood, etc., kg 4408 饰面或制胶合板单板等木材，厚度≤6mm with thickness =<6 mm 77 440810 经纵锯、或切的针叶木木材，厚≤6mm kg 78 44081011 用胶合板等制的针叶木饰面用单板，厚≤6mm kg 79 44081019 其他针叶木饰面用单板，厚≤6mm kg 80 44081020 针叶木制胶合板用单板，厚≤6mm kg 81 44081090 其他纵锯切、刨或旋切的针叶木木材,厚≤6mm kg 82 440831 经纵锯切、刨或旋切的红柳安木木材,厚≤6mm kg 83 44083111 用胶合板等制饰面单板,红柳安木制,厚≤6mm kg

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Line Code Chinese description English description Units 84 44083119 其他饰面用单板,红柳安木制,厚≤6mm kg 85 44083120 制胶合板用单板，红柳安木制，厚≤6mm kg 86 44083190 其他纵锯切刨或旋切的红柳安木木材,厚≤6mm kg 87 440839 其他纵锯切、刨或旋切的热带木木材,厚≤6mm kg 88 44083911 用胶合板等制其他热带木饰面用单板厚≤6mm kg 89 44083919 其他其他热带木制饰面用单板,厚≤6mm kg 90 44083920 其他热带木制胶合板用单板，厚≤6mm kg 91 44083990 其他纵锯切、刨或旋切的热带木木材,厚≤6mm kg 92 440890 其他纵锯切、刨或旋切的非针叶木材厚≤6mm kg 93 44089011 用胶合板等制其他非针叶木饰面单板厚≤6mm kg 94 44089012 温带非针叶木制其他饰面用单板，厚≤6mm kg 95 44089019 其他非针叶木饰面用单板，厚≤6mm kg 96 44089021 温带非针叶木制胶合板用单板，厚≤6mm kg 97 44089029 其他非针叶木制胶合板用单板，厚≤6mm kg 98 44089091 温带非针叶木制经纵刨旋切的木材，厚≤6mm kg 99 44089099 其他非针叶木制经纵刨旋切的木材，厚≤6mm kg 100 4409 任何一边、端或面制成连续形状的木材 Wood continuously shaped along any of its edges, ends or faces kg 101 440910 任何一边、端或面制成连续形状的针叶木木材 kg 102 44091010 任一边、端或面制成连续形状针叶木地板条 kg 103 44091090 其他任一边、端或面制成连续形状针叶木木材 kg 104 440921 任何一边、端或面制成连续形状竹材 kg 105 44092110 任何一边、端或面制成连续形状的竹地板条块 kg 106 44092190 其他任何一边、端或面制成连续形状的竹材 kg 107 440929 任何一边、端或面制成连续形状其他非针叶木 kg

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Line Code Chinese description English description Units 108 44092910 其他任一边、端或面成连续状非针叶木地板条 kg 109 44092990 其他任一边、端或面成连续形状非针叶木木材 kg 110 4410 木或木质材料制碎料板、定向刨花板及类似板 Particle board or similar board of wood or other ligneous materials kg 111 44101100 木制碎料板 kg 112 44101200 木制定向刨花板（OSB） kg 113 44101900 其他木制类似板（例如，华夫板） kg 114 44109000 其他木质材料制碎料板、定向刨花板及类似板 kg 115 4411 木纤维板或其他木质材料纤维板 Fiberboard of wood or other ligneous materials kg 116 441112 中密度纤维板（MDF），厚度不超过5毫米 kg 117 44111211 未机械加工中密度板d＞0.8g/cu cm厚≤5mm kg 118 44111219 经机械加工中密度板d＞0.8g/cu cm厚≤5mm kg 119 44111220 中密度板0.5g/cu cm＜d≤0.8g/cu cu厚≤5mm kg 120 44111291 未加工中密度板d≤0.5g/cu cm厚≤5mm kg 121 44111299 加工中密度板d≤0.5g/cu cm厚≤5mm kg 122 441113 中密度纤维板（MDF），5mm＜厚≤9mm kg 123 44111311 未加工中密度板d＞0.8g/cu cm5mm＜厚≤9mm kg 124 44111319 加工中密度板d＞0.8g/cu cm5mm＜厚≤9mm kg 125 44111320 中密度板 0.5g＜d≤0.8g5mm＜厚≤9mm kg 126 44111391 未加工中密度板d≤0.5g/cu cm5mm＜厚≤9mm kg 127 44111399 加工中密度板d≤0.5g/cu cm5mm＜厚≤9mm kg 128 441114 中密度纤维板（MDF），厚度超过9毫米 kg 129 44111411 未加工中密度板d＞0.8g/cu cm 厚＞9mm kg 130 44111419 加工中密度板d＞0.8g/cu cm 厚＞9mm kg 131 44111420 中密度板0.5g/cu cm＜d≤0.8g/cu cm厚＞9mm kg

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Line Code Chinese description English description Units 132 44111491 未加工中密度板d≤0.5g/cu cm厚＞9mm kg 133 44111499 未加工中密度板d≤0.5g/cu cm厚＞9mm kg 134 441192 其他木纤维板，密度（d）＞0.8g/cu cm kg 135 44119210 未加工木纤维板，密度（d）＞0.8g/cu cm kg 136 44119290 加工木纤维板，密度（d）＞0.8g/cu cm kg 137 44119300 木纤板，0.5g/cu cm＜d≤0.8g/cu cm kg 138 441194 其他木纤维板，密度（d）≤0.5g/cu cm kg 139 44119410 木纤板，0.35g/cu cm＜d≤0.5g/cu cm kg 140 44119421 未加工木纤板，d≤0.35g/cu cm kg 141 44119429 加工木纤板，d≤0.35g/cu cm kg 3 142 4412 胶合板、单板饰面板及类似的多层板 Plywood, veneered panels, and similar laminated wood m or kg 3 143 441210 竹制胶合板、单板饰面板及类似的多层板 m or kg 3 144 44121011 薄板制竹胶合板至少一表层热带木层厚≤6mm m or kg 3 145 44121019 其他薄板制竹胶板单板饰面板多层板厚≤6mm m or kg 3 146 44121020 其他薄板制竹胶板,单板饰面板及类似多层板 m or kg 3 147 44121091 其他竹胶合板单板饰面板至少有一表层热带木 m or kg 3 148 44121092 其他竹胶合板类似多层板至少一表层木碎料板 m or kg 3 149 44121099 其他竹制胶合板、单板饰面板及类似的多层板 m or kg 3 150 44123100 其他薄板制胶合板至少一表层是热带木厚≤6 m or kg 3 151 441232 其他薄板制胶合板至少一表层是非针叶木 m or kg 3 152 44123210 其他薄板制胶合板至少一表层是温带木厚≤6 m or kg 3 153 44123290 其他薄板制胶合板至少一表层非针叶木厚≤6 m or kg 3 154 44123900 其他薄板制胶合板厚≤6mm m or kg 3 155 441294 其他木块芯、侧板条芯、板条芯胶合板 m or kg

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Line Code Chinese description English description Units 3 156 44129410 其他木块芯胶合板等至少一表层是非针叶木 m or kg 3 157 44129491 其他木块芯胶合板等至少一表层是热带木 m or kg 3 158 44129492 其他木块芯胶合板等至少一表层是木碎料板 m or kg 3 159 44129499 其他木块芯、侧板条芯、板条芯胶合板 m or kg 3 160 441299 其他胶合板、单板饰面板及类似的多层板 m or kg 3 161 44129910 其他胶合板等至少一表层是非针叶木 m or kg 3 162 44129991 其他胶合板等至少一表层是热带木层 m or kg 3 163 44129992 其他胶合板等至少一表层是木碎料板 m or kg 3 164 44129999 未列名胶合板、单板饰面板及类似的多层板 m or kg 165 4413 强化木，成块、板、条或异形的 Densified wood in block, plates, strips, or profile shapes kg 166 44130000 强化木，成块、板、条或异形的 kg 167 4414 木制的画框、相框、镜框及类似品 Wooden frames for paintings, photographs, mirrors, or similar objects kg 168 44140000 木制的画框、相框、镜框及类似品 kg 169 Packing and similar packings of wood; cable drums of wood; pallets and Items or kg 4415 木制箱、盒、桶等包装容器及电缆卷筒等 other load boards of wood; pallet collars of wood 170 44151000 木制箱、盒、桶及类似的包装容器；电缆卷筒 Items or kg 171 44152000 木托板、箱形托盘及其他装载木板；托盘护框 Items or kg 172 Casks, barrels, vats, tubs and other coopers’ products and parts thereof, of kg 4416 木制大桶、琵琶桶、盆等木制箍桶及其零件 wood 173 44160000 木制大桶、琵琶桶、盆等木制箍桶及其零件 kg 174 Tools, tool bodies, tool handles, broom and brush bodies and handles, of kg 4417 木制工具等；扫帚及刷子等；木鞋靴楦及楦头 wood; boot or shoe lasts and tress, of wood 175 44170000 木制工具等；扫帚及刷子等；木鞋靴楦及楦头 kg 176 4418 建筑用木工制品 Builders joinery and carpentry wood kg 177 44181000 木制窗、法兰西式（落地）窗及其木制框架 kg 178 44182000 木制门及其框架和门槛 kg

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Line Code Chinese description English description Units 179 44184000 木制水泥构件的模板 kg 180 44185000 木瓦及木制盖屋板 kg 181 44186000 木制柱及樑 kg 182 44187100 马赛克地板用已装拼的木地板 kg 183 44187200 其他多层已装拼的木地板 kg 184 44187900 其他已装拼的木地板 kg 185 44189000 其他建筑用木工制品 kg 186 4419 木制餐具及厨房用具 Tableware and kitchenware of wood kg 187 441900 木制餐具及厨房用具 kg 188 44190031 木制一次性筷子 kg 189 44190032 竹制一次性筷子 kg 190 44190039 其他木质一次性筷子 kg 191 44190090 其他木制餐具及厨房用具 kg 192 Wood marquetry and inlaid wood; caskets and cases for jewelry or cut- kg 4420 镶嵌木；木珠宝盒及装饰品等 lery, and similar articles of wood, etc. 193 442010 木制小雕像及装饰品 kg 194 44201010 木刻及竹刻 kg 195 44201020 木扇 kg 196 44201090 其他木制小雕像及装饰品 kg 197 442090 镶嵌木;珠宝或刀具木盒类似品;94章外木家具 kg 198 44209010 镶嵌木 kg 199 44209090 珠宝或刀具木盒及类似品；第94章以外木家具 kg 200 4421 其他木制品 Other articles of wood kg 201 44211000 木制衣架 kg

A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 80 DRAFT

Line Code Chinese description English description Units 202 442190 其他木制品 kg 203 44219010 木制卷轴、纡子、筒管、缝纫用线轴及类似品 kg 204 44219021 木制圆签圆棒冰果棒压舌片及类似一次性制品 kg 205 44219022 竹制圆签圆棒冰果棒压舌片及类似一次性制品 kg 206 44219029 其他木质圆签冰果棒压舌片及类似一次性制品 kg 207 44219090 未列名木制品 kg Explanatory Note 1: This was not included in the Chinese listing provided by customs. If needed, follow up with China Customs Consulting Office through email is suggested prior to making an order.

A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 81 DRAFT

Sub-Annex B: Data from China Customs in format received Note: This data was ordered in Chinese, but operating system issues render the Chinese text illegible, while numbers and English text can be read. Ordering data reports fully translated in English costs 1.5 times the price of those prepared in Chinese. First Order, Item 1: Volume and value of log (4403) imports from the Solomon Islands by port for March 2008 2008Äê3Ô½ø¿ÚËÄλÉÌÆ·/Ó¢ÎĹú±ð/¹Ø±ðÁ¿Öµ±í µ¥Î»£ºÃÀÔª ËÄλÉÌÆ· |¼Æ Á¿| 3Ô ӢÎĹú±ð | |------¹Ø±ð |µ¥ λ| Êý Á¿ | ½ð ¶î 4403 ԭľ£¬²»ÂÛÊÇ·ñȥƤ¡¢È¥±ß²Ä»ò´Ö¾â³É·½ Á¢·½Ã× 3,288,162 557,528,979 613 Solomon Is 127,006 23,695,434 23 ÄϾ©º£¹Ø 118,913 22,497,714 52 »ÆÆÒº£¹Ø 8,093 1,197,720

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First Order, Item 2: Volume and value of log and sawn wood imports from the Solomon Islands by product category for March 2008 Page 1 2008Äê3Ô½ø¿Ú°ËλÉÌÆ·/Ó¢ÎĹú±ðÁ¿Öµ±í µ¥Î»£ºÃÀÔª °ËλÉÌÆ· |¼Æ Á¿| 3Ô ӢÎĹú±ð | |------|µ¥ λ| Êý Á¿ | ½ð ¶î 44034100 £¨ÉîºìÉ«¡¢Ç³ºìÉ«¼°°ÍèࣩºìÁø°²Ä¾Ô­Ä¾ Á¢·½Ã× 7,743 1,765,434 44034910 èÖľԭľ Á¢·½Ã× 6,711 4,745,007 44034930 ÁúÄÔÏãľDipterocarpus spp.¿Ë¡ľԭľ Á¢·½Ã× 41,605 9,739,522 44034940 ɽÕÁľ£¨ÏãľDryobalanops spp.£©Ô­Ä¾ Á¢·½Ã× 12,486 2,988,510 44034950 Ó¡¼ÓľIntsia spp.£¨²¨ÂÞ¸ñMengaris£©Ô­Ä¾ Á¢·½Ã× 10,401 4,630,162 44034960 ´ó¸É°Í¶¹Ä¾£¨ÃŸñÀï˹»ò¿µÅÉ˹£©Ô­Ä¾ Á¢·½Ã× 9,514 1,588,626 44034970 Òì³áÏãľAnisopter spp.ԭľ Á¢·½Ã× 3,263 786,166 44034990 δÁÐÃû±¾ÕÂ×ÓĿעÊÍ1ËùÁÐÈÈ´øľԭľ Á¢·½Ã× 42,982 17,222,698 44039930 ºìľԭľ Á¢·½Ã× 604,395 135,947,161 613 Solomon Is 127,006 23,695,434 44072600 ×ݾâÇÐÅÙ»òÐýÇеİ׻ÆÁø°²Ä¾µÈľ²Ä,ºñ£¾6mm Á¢·½Ã× 2,781 796,265 44072910 ¾­×ݾâÇÐÅÙÇлòÐýÇеÄèÖľľ²Ä,ºñ£¾6mm Á¢·½Ã× 4,356 2,894,437 44072920 ×ݾâÇÐÅÙ»òÐýÇзÇÖÞÌÒ»¨ÐÄľľ²Ä,ºñ£¾6mm Á¢·½Ã× 233 264,608 44072930 ¾­×ݾâÇС¢ÅÙ»òÐýÇеIJ¨ÂÞ¸ñľľ²Ä,ºñ£¾6mm Á¢·½Ã× 7,096 4,166,350 613 Solomon Is 184 88,259 44072990 ÆäËû×ݾâÇС¢ÅÙ»òÐýÇеÄÈÈ´øľľ²Ä,ºñ£¾6mm Á¢·½Ã× 18,608 10,492,125 44079910 ×ݾâÇÐÅÙ»òÐýÇеÄÕÁľ¡¢éªÄ¾¡¢ºìľ,ºñ£¾6mm Á¢·½Ã× 4,606 4,018,453

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Page 2 2008Äê3Ô½ø¿ÚËÄλÉÌÆ·/Ó¢ÎĹú±ðÁ¿Öµ±í µ¥Î»£ºÃÀÔª 82 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 82 DRAFT

ËÄλÉÌÆ· |¼Æ Á¿| 3Ô ӢÎĹú±ð | |------|µ¥ λ| Êý Á¿ | ½ð ¶î 4407 ¾­×ݾ⡢×ÝÇС¢ÅÙ»òÐýÇеÄľ²Ä£¬ºñ£¾6mm Á¢·½Ã× 568,345 160,336,546 613 Solomon Is 215 97,603

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Page 3 2008Äê3Ô½ø¿ÚÁùλÉÌÆ·/Ó¢ÎĹú±ðÁ¿Öµ±í µ¥Î»£ºÃÀÔª ÁùλÉÌÆ· |¼Æ Á¿| 3Ô ӢÎĹú±ð | |------|µ¥ λ| Êý Á¿ | ½ð ¶î 440349 ÆäËû±¾ÕÂ×ÓĿעÊÍ1ËùÁÐÈÈ´øľԭľ Á¢·½Ã× 231,681 73,972,828 440729 ÆäËû¾­×ݾâÇÐÅÙ»òÐýÇеÄÈÈ´øľľ²Ä,ºñ£¾6mm Á¢·½Ã× 30,293 17,817,520 613 Solomon Is 184 88,259

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Second Order, Item 1: Volume and Value by Port for Import of Two Top Product Codes (44039990 and 44072930) from Solomon Islands for March 2008 2008Äê03Ô½ø¿Ú°ËλÉÌÆ·/Ó¢ÎĹú±ð/¹Ø±ðÁ¿Öµ±í µ¥Î»£ºÃÀÔª °ËλÉÌÆ· |¼Æ Á¿| 03Ô ӢÎĹú±ð | |------¹Ø±ð |µ¥ λ| Êý Á¿ | ½ð ¶î 44039990 δÁÐÃû·ÇÕëҶľԭľ Á¢·½Ã× 604,395 135,947,161 613 Solomon Is 127,006 23,695,434 23 ÄϾ©º£¹Ø 118,913 22,497,714 52 »ÆÆÒº£¹Ø 8,093 1,197,720 44072930 ¾­×ݾâÇС¢ÅÙ»òÐýÇеIJ¨ÂÞ¸ñľľ²Ä,ºñ£¾6mm Á¢·½Ã× 7,096 4,166,350 613 Solomon Is 184 88,259 22 ÉϺ£º£¹Ø 155 70,021 60 ÉÇÍ·º£¹Ø 29 18,238

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Second Order, Item 2: Top 10 importers by port for product code 44039990 from Solomon Islands, giving value imported in March 2008

2008Äê3Ô½ø¿Ú°ËλÉÌÆ·/Ó¢ÎĹú±ð/¹Ø±ð/¾­Óªµ¥Î»Ç°10λÁ¿Öµ±í µ¥Î»£ºÃÀÔª °ËλÉÌÆ· |¼Æ Á¿| 3Ô ӢÎĹú±ð | |------¹Ø±ð/¾­Óªµ¥Î» |µ¥ λ| Êý Á¿ | ½ð ¶î 44039990 δÁÐÃû·ÇÕëҶľԭľ Á¢·½Ã× 604,395 135,947,161 613 Solomon Is 127,006 23,695,434 23 ÄϾ©º£¹Ø 118,913 22,497,714 3711961056 ÈÕÕÕÃÀ»ªÃ³Ò×ÓÐÏÞ¹«Ë¾ 5,273,671 83 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 83 DRAFT

3302961039 Äþ²¨Êкì¹â×°ÊβÄÁÏÓÐÏÞ¹«Ë¾ 3,891,606 3201919018 ½­ËÕË´Ìì¹ú¼Ê¼¯ÍÅ»úе½ø³ö¿Ú¹É·ÝÓÐÏÞ¹«Ë¾ 3,137,317 3201919287 ½­ËÕË´Ìì»úе½ø¿ÚÓÐÏÞÔðÈι«Ë¾ 2,768,311 3104915037 ÉϺ£ÉÏʵ¹ú¼ÊóÒ×(¼¯ÍÅ)ÓÐÏÞ¹«Ë¾ 2,578,605 3210960607 ½­¶¼ÊÐÍòÐÂľҵÓÐÏÞ¹«Ë¾ 2,484,199 3201919199 ½­ËÕ¿ªÔª¹ú¼Ê¼¯ÍÅÓÐÏÞ¹«Ë¾ 1,311,413 3210950636 ½­ËÕ½­Áú½ø³ö¿ÚóÒ×ÓÐÏÞ¹«Ë¾ 738,817 3302941171 Äþ²¨ºãÀûľҵÓÐÏÞ¹«Ë¾ 313,775 52 »ÆÆÒº£¹Ø 1,197,720 4422931066 ·ðɽÊÐ˳µÂÇø¶«Ë³Ä¾ÒµÓÐÏÞ¹«Ë¾ 1,197,720

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84 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 84 DRAFT

Annex 4 Value-Adding Options for Solomon Island Timbers

Report prepared for the Facilitating Agricultural Commodity Trade (FACT) Project, Secre- tariat of The Pacific Community, Suva, Fiji. Author: Peter J. Eddowes Asia Pacific Timber Consultants T/A Grokelo Pty Ltd PO Box 383, Runaway Bay Queensland 4216 Australia

Introduction So as to enable these private mill operators to obtain greater value for their sawn product, and to stop unnec- The original ‘concept’ of the portable/mobile sawmill essary wastage and loss of revenue, an education pro- was for cutting large slabs and/or flitches for a specific gramme needs to be implemented to address the purpose e.g. railway ties or for ‘breaking-down’ the current problems where a better quality sawn product felled, merchantable bole into convenient handling could be produced by following some simple, basic sizes for ease of transportation back to a main sawmill steps, in value-adding. This information may be had for ‘re-sawing’ into specified sizes, preferably by a through the organisation and running of technical thin-kerfed (3mm) bandsaw (100mm) blade. Unfortu- workshops and/or in the field with the mill operators. nately, this concept has now been all but ignored, and the mobile/portable mills have been turned into a If these ‘basic’ (field) problems are addressed to ‘commercial-type’ production mill which is not what achieve a better quality sawn product, this will then be they were originally intended or designed for. Portable the first step in ‘value-adding’ before proceeding to mills cutting to specified orders e.g. 25, 38 & 50mm x the next stage of preliminary air-drying and thence 100mm and wider, incur far too much wastage due to possible consideration of kiln-drying. It is not believed cutting off of sapwood, sizing/squaring-off of log (side that the Solomons Timber Industry should be looking wings) and including the bottom (bed) wing upon at ‘manufacturing’ of wood products, at this stage of completion of sawing, plus the loss of wood due to the industry development, for the export market. wide (circular), saw kerfs (5mm min.) both vertically and horizontally upon every pass through the log. A review of value adding options A centralised (value-adding) processing plant, centrally 1. Tree selection located near major port facilities e.g. Honiara and Noro, is worthy of serious consideration. The envis- The first step in value adding is at the stump, that is the aged processing plant would be able to buy in large conversion of the merchantable bole into sawn boards slabs and or flitches, with greater returns re. sawn re- or squares or flitches or slabs. Tree selection is very covery to the millers, including sapwood, for actual important as the ‘form’ of the merchantable bole will downstream processing including re-sawing of dictate the sawn recovery rate. Ideally, the merchant- slabs/flitches into the specified/standard sizes of 25, 38 able bole should be 60cm (min.) in diameter (dbh). & 50 x 100mm and wider. The sawn material can then Crooked, twisted, spiralling of grain (e.g. Calophyllum) be preliminary air-dried, prior to kiln-drying, and un- and leaning stems should be avoided as trees with these dergo pressure treatment, where sapwood is present, so types of irregularities can result in loss of sawn produc- as to ensure durability of sawn product and to comply tion and incur further losses due to degrade upon sea- to international standards. soning. Therefore, the consideration of value-adding options, 2. Log and sawn timber protection in this report, is made by taking into account the cur- The implementation of a prophylactic, spraying re- rent ‘nature’ of the milling industry in the Solomon gime, needs to be considered where certain (most) tim- Islands. It is small and fragmented comprising of a ber species are susceptible to attack from either large number of privately owned, mobile/portable pinhole borer (Ambrosia beetles) and/or blue (fungal) sawmills. A large number of these mobile mill owners, stain. Failure to implement prophylactic measures can and operators, are quite ignorant of what the export lead to ‘down-grading’ of sawn product and loss of market seeks and demands in the way of grade and revenue. Timbers such as rosewood (Pterocarpus in- quality as well as their perceived price expectations. dicus) especially, are highly susceptible to pinhole 85 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 85 DRAFT

borer attack and sawn boards with this defect are not 4. Correct sawn (sizing) and saw acceptable to end-users as rosewood is used exclu- allowances sively for its aesthetic appearance. Similarly, other timbers such as kauri pine (Agathis macrophylla) and All sawn material needs to be cut to the ‘correct’ size pencil cedar (Palaquium spp.) are susceptible to blue as specified by the customer. Generally, an allowance stain and therefore require ‘immediate’ prophylactic of +5mm on thickness, 5–10% on width of boards treatment, with ‘anti-fungal’ solution, as soon as the (10% over 150 mm wide) and +50mm allowance on log has been felled, and immediately upon the cutting lengths of all sawn material. Logs should be cross-cut of boards. (docked) to the ‘standard’ lengths required plus 50mm allowance. e.g 2.4 m standard length plus 50 mm al- 3. Correct sawing profile — quarter-cut lowance (2.450 m). The best cutting practice that should be encouraged and 5. Cutting sizes for export adopted, is that all sawn material should be ‘quarter- cut’. After the first one or two cuts (horizontal) are The cutting and export of large-sized flitches is only taken across the top (width) of the log to create a flat acceptable for a limited number of timber species des- (level) working surface, all subsequent cuts should be ignated for a specific end use e.g rosewood vertical to the horizontal (plane) face. The major reason (300x200mm) for custom slicing (see Table 1). Other for producing ‘quarter-cut’ (sawn) material is for better than that, large slabs are not suitable for the Australian quality drying in alleviating such drying defects as cup and New Zealand markets as the Importers (Wholesal- and twist which can be a common drying defect on ers) will have to pay a lot less (FOB price) due to the back-sawn (horizontal) boards. expense of them having to then ‘sub-contract’ the large slabs out for ‘re-sawing’, plus wastage/loss factor in- curred of the actual invoiced amount (FOB value & volume) as against the ‘actual’ (recovered) volume.

86 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 86 DRAFT

Table 1. Price information

Key species Trade name Timber sizes Grade Condition *fob price Comments (r/s) (AUD/m3)

Agathis macrophylla kauri pine 25,38 & 50 mm x100 mm & wider Select Air dry 600–900 Susceptible to blue stain. Possibly also 50x50, 100x100, 150x150 & 200x200 mm (see Item 7-Market Intelligence)

Calophyllum spp. calophyllum 28, 38 & 50 mm x 100 mm & wider Select Air dry 500 Drying problems. Needs to be quarter-cut and well seasoned prior to shipment.

Campnosperma bre- campnosperma Not marketed or established into markets except vipetiolatum in round-log form. (see Item 7-Market Intelligence)

Dillenia spp., incl. dillenia Selected logs (with black, pencil stripe) may be a possibility Select Green Very difficult to season. Needs more research & D.alata (simpoh) for veneer flitches e.g. 150-200x200 mm marketing. Not established or accepted in cur- rent market.

Gmelina moluccana white beech (canoe 25,38 & 50 mm x 100 mm & wider Select Green- 700–800 (see Item 7-Market Intelligence) wood) Shipping dry

Intsia bijuga kwila 25x75 mm & 100 mm; 25, 38 & 50 mm x 150 & wider. 75 mm Select Green 800–1200 In strong demand and increasing. Prices also on x 150 mm, 175 & 200 mm; 50x 50, 100x100, 125x125, 150x upward trend. 150, 200x200 mm

Palaquium spp. pencil cedar 25, 38 & 50 mm x 150 mm & wider Select Air dry 550–650 Susceptible to blue stain (see Item 7 - Market Intelligence)

Paraserianthes fal- white albizia Not marketed or sold into current markets. cataria (see Item 7 - Market Intelligence)

Pometia pinnata akwa 25, 38 & 50 mm x 100 mm & wider. Also, 100x100 mm Select Air dry 500-600 Susceptible to pinhole borer and brittle heart (taun) (doze) in log. (see Item 7 - Market Intelligence)

Pterocarpus indicus rosewood 25, 38 & 50 mm x 100 mm & wider. Also for veneer flitches Select Green- 750–950 Highly susceptible to pinhole borer (Ambrosia e.g 150-200x200 mm Shipping dry beetle). (see Item 7 - Market Intelligence)

Terminalia brassii brown terminalia Little or no aesthetic appeal. Difficulty in dry- 87 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 87 DRAFT

Key species Trade name Timber sizes Grade Condition *fob price Comments (r/s) (AUD/m3) ing. Better suited in log form for rotary veneer.

Vitex cofassus vitex 25x75 mm & wider. 75x150 mm & wider. Select Green- 600–800 Would benefit greatly from further marketing 38&50 mmx150 mm & wider. 100x100, 150x150 & Shipping dry and promotion. Takes a long time to dry. 200x200 mm Footnote: *Denotes: Re. FOB price/m3 – Price information sourced and supplied by Asia Pacific Timber Consultants T/A Grokelo Pty Ltd. Prices based on the current, average FOB price for timbers being imported into Australia and New Zealand from the Solomon Islands and Papua New Guinea as at 31.12.08.

88 A M ARKET I NFORMATION S YSTEM FOR S OLOMON I SLANDS T IMBERS 88 DRAFT

As well, Quarantine regulations in both Australia and nary air-drying will vary according to the timber spe- New Zealand, stipulate that all imported sawn material cies and the respective thickness e.g. from 30 to 60 can only have one dimension at a ‘maximum’ (thick- days for 25 mm material and from 3 to 6 months for 50 ness) of only 200 mm. This is so as to allow for pene- mm (max. drying thickness) material. tration of the methyl-bromide gas used in the It is important to note that when kiln-drying, only fumigation process of all wood material, prior to ex- one (1) timber species in any one (1) thickness, can be port. kiln-dried at a time. There are also various and ‘differ- It is conceded that mobile mill operators prefer to cut ent’ kiln-drying schedules for each species and each certain sizes (and lengths) for ease of handling e.g. 50 thickness. Some basic kiln-drying schedules have been x 100 mm and wider, in lengths of 1.8 m up to 4.2 m. developed for most of the major ‘Key’ timber species. However, not all of these sizes are as required by Im- These schedules have been developed and tested by porters (see Table 1). If the timber industry in the various research organisations and private industry Solomon Islands is to progress, it must address its cur- including the CSIRO of Australia. Some of these dry- rent marketing problems and supply to customer re- ing schedules have been modified (for 25 mm thick quirements. timber) to suit Solomon Island timbers and can be found in the various references including ‘Solomon The foregoing five steps are the ‘basic’ considerations Islands Timber’ (Peter J. Eddowes, Asia Pacific Tim- toward ‘value-adding’ and/or in realising a better price ber Consultants) published by AusAID (Australian for producers and exporters. The following (on-shore) Government) 2005. ‘value-adding’ options are given as follows: Cost of a conventional drying kiln Air drying and kiln drying The choice of type of drying kiln is extremely impor- It is very important that all sawn material is treated and tant. This report does not allow for ‘in-depth’ discus- handled with care, especially at the point of the sawn sion on this subject as it is a lengthy and complex production and so as to avoid ‘distortion’ that may oc- matter. However, the recommendation would be for a cur during the ‘initial’ drying period. To alleviate any ‘custom-made’ drying kiln with a drying capacity of possible degrade of sawn boards, during this initial 20m3 of sawn material in any one charge. The heat drying period, drying stacks should be made up with source to be via hot flue gas generated from a hand- ‘spacers’ (20 mm thick) in between each row of boards fired, waste-wood, burning furnace. Kiln slab (con- (to allow for air circulation). These timber drying crete) and shed, insulated with plywood and water- stacks should be placed onto wooden bearers or bed proofed fibre cement lining, can be constructed from logs, up off the ground and aligned in a straight line (to local materials (on-site) as per custom-made (kiln) de- keep boards straight). It is also preferable that the tops sign. Ancillary equipment including fans (stainless of the drying stacks are kept covered and protected steel), heating pipes, steam valves etc., plus computer- from the sun and rain. A simple ‘leaf hut’ can be built ised (operating) equipment re. settings (wet & dry bulb with poles and a roof of thatched palm fronds to protect etc.) would be made up, supplied and then installed by the sawn timber from the sun and rain during this ini- the manufacturer e.g., ex. Brisbane kiln manufacturer. tial drying period. The conservative estimate of the cost of this type of (high quality) custom-made kiln, up and running, All timber brought into say, Honiara or Noro, would would be in the vicinity of AUD100,000. firstly need to be graded and properly sorted, by spe- cies, into their respective thickness. Drying packs Kiln-drying charges and costs would then need to be made up with 20 mm ‘stickers’ or ‘spacers’ between each row of boards and spaced at Once the sawn materials have been preliminary air- say 450–600 mm along the length of ‘each’ row of dried (30-35% m.c), the time taken (on average) for boards so as to allow for proper air-flow. each charge (20m³) including all thicknesses, should be at least one (1) full charge per week i.e 4 container Upon completion of making-up of individual packs, loads (min.) per month. If the drying yard is structured the packs then need to be strapped (metal strapping) to fully utilise waste wood from re-sawing, docking and the ends of boards coated with a wax emulsion etc., the running costs of the kiln are ‘minimal’ allow- type end-sealant or approved lumber-paint. Each pack ing for six (6) casual labourers to keep the hand-fired, is then taken to the designated air-drying area and waste-wood boiler operative for 24 hours a day. It is placed on bearers (up off-the-ground) to undergo a envisaged that the drying/holding/sorting yard will be preliminary drying period prior to going into the kiln big enough to stock sufficient sawn timber to keep up for final drying. Preliminary air-drying allows for the throughput to the drying kiln including 25,38 & 50 mm respective timbers to ‘equilibrate’ to an even moisture material of sawn e.g rosewood. Providing the sawn content so that all of the sawn members will reach on material has been well stacked and preliminary air- equal (average), moisture content, and so ensure an dried to 30-35%, the yard should achieve the objective ‘even’ drying period when placed in the kiln. Prelimi- of completing one (1) full charge every 6–7 days in-

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cluding loading and un-loading of the kiln. As the provide a back-up service and in the acquisition and waste-wood furnace will be operating continuously for installation of a pressure treatment plant using ACQ 24 hours a day , the yard will need to employ 6 casual (Naturewood) wood preservatives. Some second-hand labourers (on 3x8 hour shifts) to ensure the furnace is (re-conditioned) plants are available at various costs kept ‘firing’ with waste-wood. These same (6) labour- e.g., (A$50-100,000.) installed. ers, would also be responsible for general yard duties including the making-up of drying (stickered) stacks Rotary veneer — production plant for air-drying, and subsequent kiln-drying. The yard There exists an ever-growing demand for rotary (hard- would also require a general (yard) manager as kiln wood) veneer for both face, backs and core stock due operator and a machinery operator for the fork-lift or to decreasing supplies from S.E. Asia. We (Asia Pa- rubber-tyred skidder. cific Timber Consultants) have been approached by companies seeking an opportunity for installing a ro- Charge for kiln-dried material (export) tary-veneer, peeler (production line) alongside an exist- A charge of A$150-200/m³ could be easily applied and ing log production concession with suitable species and would be readily acceptable by potential importers. of course a guarantee of tenure. Such a business op- This gives a readily ‘saleable’ product and eliminates portunity offers good prospects as say a Joint Venture the cost of importers having to send their (imported) with private enterprise, local land-owners and/or Gov- materials for sub-contract drying upon importation, and ernment. One such resource that would be worthy of at greater expense e.g., transporting to and from a ‘sub- consideration is Kolombangara and its plantation spe- contract’ dryer, plus cost of drying. cies incl., that of Eucalyptus deglupta. Solomon Islands could look at ‘outside’ investment by selected rotary Outline of costs veneer operations in Australia including the investment Assuming that the kiln is operative for 24 hours, seven by the Malaysian company Ta Ann in Tasmania, as this days a week, and that a volume of 20m3 per charge is may offer an example of what is involved, including dried at a going rate of say A$150/m³ (conservative), the terms and conditions sought by the Investor, and this would give a gross return of A$12,000.00 p.m or the guarantee of secure tenure required to attract such maximum of say $144,000.00 p.a (approx.). The aver- investment. age cost in e.g Australia for the kiln-drying of ‘pre- Possibilities may also exist for ‘outside’ investment by dried’ hardwoods is around $140-180/m3 including a Company in custom ‘slicing’. However, ‘sliced’ ve- preparation in stickering of packs and thence de- neer is a more ‘selective’ field of manufacture and stickering and bundling upon kiln-drying. On top of market dictates ‘specialty’ woods with specific ‘aes- this is the cost (to the Importer) of transportation to and thetic’ appeal and in being able to follow international from the yard of the sub-contract drying facility, which market trends and demands. One timber species that can be around $50/m³ each way i.e $100/m3 incurred currently fits into the sliced/decorative veneer market is in transport costs alone. rosewood. Other equipment Value-adding options for specific species The yard would require a rubber-tyred skidder (pref- 1) Kwila (Intsia bijuga) erably) with forks. A good quality, second-hand (re- conditioned unit) can be obtained for around The only value-adding option that needs to be consid- A$50,000.00. To complement the ‘materials’ yard and ered for kwila is kiln-drying and bundling into respec- drying kiln, it is suggested that a Band re-saw and tive sizes (thickness) prior to export. These Docking saw be purchased together with a packs/bundles can then be distributed to end-users im- planer/thicknesser. The cost of these other items for mediately upon receipt of container by im- good quality (re-conditioned) machinery, would be porter/wholesaler. Important to ensure that ends of all around A$75,000.00 (max.) giving a total, all-up cost boards have been heavily coated with end-sealant e.g of say A$225,000-250,000.00. wax emulsion (to alleviate splitting and face checking). Wholesalers would be only too happy to pay upwards of A$250/m3 extra for well presented, graded, kiln- dried material in (sized) packs. Additional value- Pressure treatment plant adding re. moulding and for manufacture of items such Consideration should also be given to the installation as T&G flooring is not considered feasible. Production of a pressure treatment plant. This would allow for of high quality flooring materials requires strict mois- even greater utilisation of sawn materials incl., round ture content controls and high capital investment to poles or plantation thinnings (sap on) and ensure a purchase and install quality moulding machinery and greater durability of hardwoods for local building and end-matching equipment. The majority of Australian construction purposes as well the export market. There and New Zealand manufacturers prefer to manufacture are (chemical) companies who would be willing to and supply their own moulded products as there can be severe repercussions from the ultimate consumer, if

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items such as T&G flooring do not meet the required Market intelligence and trend for standard, quality of product and specified moisture content. Solomon Island timbers 2) Plantation teak (Tectona grandis) Introduction Through past experience, our personal belief is that Summary-The major markets currently available for plantation-grown teak is better off to be exported in Solomon Island Timbers are in Australia and New Zea- round-log form. The only other value-adding option land. Both countries are familiar with the timber spe- worth consideration for material ex. Solomons, would cies available especially the ‘commodity-type’ species be to cut the logs into squares e.g 50x50, 75x75, such as kwila (Intsia bijuga) and rosewood (Pterocar- 100x100 mm and possibly 150x150 mm incl., pus indicus). However, the latter (rosewood) is not core/heart. The major importing and manufacturing used in any ‘large’ volumes in New Zealand. c.f Aus- countries of teak, including India, which accounts for tralia. Other timber species that have established niche approximately 70% of the teak market, would be markets in both countries include akwa (taun), pencil happy to accept well-graded squares as this would all cedar, vitex and white beech. but eliminate the sapwood (non-usable) content and The Australian and New Zealand markets mainly have allow for additional volume to be placed into contain- demand for structural grade timbers (F17 & F27) as ers thus reducing the freight cost per volume (cubic well as general joinery purposes incl., window and metre) of wood. door frames, window sills, wooden doors, shop-fitting The main problem with the plantation-grown teak is items and general building construction, where dura- the inability to produce ‘clear-faced’ boards longer bility is the main criterion eg. decking, screening, posts than 100 cm, due to occurrence of knots. The wide and flooring. Furniture items are also manufactured but sapwood band (up to 38 mm) also reduces sawn recov- mainly ‘custom-made’ items as it is not possible to ery rates. The value of teak (ex. Solomons) lies mainly compete on any large scale (furniture) manufacturing in its round form so as to allow for importing (special- due to (cheap) imports from China. Outdoor garden ist) manufacturers to maximise sawn recovery and furniture ex. kwila is popular. However, the Australian greater utilisation of the round timber. The Solomon and New Zealand manufacturing industry is not large Islands is not in a position nor able to produce (sawn) and is somewhat specialised. material to the ‘exacting’ standards as required by Other importing countries include Noumea and Tahiti manufacturers and/or wholesalers for this particular but their imported species are mainly confined to that species. of kwila and vitex (durable), mainly for exterior join- Also, from past experience ‘other’ plantation-grown ery and building purposes as aligned to the tourist in- species have little aesthetic appeal in Australia and dustry e.g heavy decking and posts, for accommodation New Zealand in a value-added (e.g. sawn) timber mar- dwellings. ket. This is due to a variety of reasons including, grain Possibilities also exist for other and more lucrative irregularities, colour variance, internal fungal stain etc. type, specialised international markets, such as Japan. As well, their strength and durability properties do not The Japanese market is somewhat ‘specialised’ as its lend themselves for higher structural grade use e.g. imported (sawn) materials are manufactured mainly for F17. However, this is not to say that they will not be in local consumption and as such, their standard sizes demand in twenty years time. differ to those standard (sawn) sizes as exported to Australia and New Zealand. There does however, exist some very lucrative market opportunities providing Footnote: Drying, pressure treatment plants, rotary their (Japan) rigid specification and quality measures & sliced veneer manufacturers can be met. Timber species such as kauri pine, pencil Asia Pacific Timber Consultants T/A Grokelo Pty Ltd, cedar, white albizia, rosewood and vitex have good are aligned to highly reputable , high quality manufac- market potential as well as plantation teak. However, turers specialising in rotary and sliced veneer, custom- all of these timber species would need to be subject to built drying kilns and chemical companies that special- the most stringent quality controls and on-shore grad- ise in the services of supply of chemicals and supply ing and kiln-drying prior to export. The Japanese are and installation of treatment plants incl., pressure cyl- very ‘quality’ conscious but will pay excellent prices inders, in accordance with International Standards and for the right product. best environmental practices. Recommendations The following recommendations are made based on the foregoing report as well as endeavouring to portray a vi- sion for the future, whereby Solomon Island timbers can be better utilised, marketed, promoted and accepted

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into international markets. One of the main criteria is to AQIS/Quarantine/Customs regulations in both work toward getting Solomon Island timbers incorpo- Australia and New Zealand. rated and listed into the relevant Building Standards and Codes of Practice in both New Zealand and Aus- Provision within the TOR would also be tralia. The majority of Solomon Island timbers are not required for the following: included in the respective building codes of either New The possible ‘testing’ of timber species to veri- Zealand or Australia. In summary, this means that the o fy/confirm their strength properties so as to ensure relevant Building and Works Authorities only consider and their compliance to international building codes approve those timbers that are listed in the build- (stress ratings) for structural purposes (F8 toF27). ing/specifying codes. This work generally undertaken by Forest State De- So as to get Solomon Island timbers approved and in- partments or CSIRO Australia. corporated into the relevant building codes, thus ensur- o Testing of authentic wood specimens of those timb- ing their acceptance and thereby their fuller utilisation, ers considered to be durable but to confirm their du- it is suggested that a proposal be drawn up for submis- rability rating. sion (for funding) along the following type of T.O.R to o Organisation and conducting of Timber Information include: Seminars. This would be done via and under the aus- pices of the respective Timber Importer’s Associa- 1) Research and appraisal of existing published tech- tions (N.Z and Australia) as promotion and nical data on tests undertaken on Solomon Island marketing work timbers to determine their physical and mechanical o Workshops - especially in the Solomon Islands to properties. outline and discuss all of foregoing regarding re- 2) Prepare and publish a standard Nomenclature of quirements and compliance trade and botanical names for Solomon Island o Implementation of a quality control regime incl., timbers and timber species. prophylactic treatments to alleviate pinholeborer (Ambrosia beetle) attack, blue stain fungi, grading, 3) The incorporation of Solomon Island timbers into packaging & bundling the relevant Building Codes and respective Stan- Formulation of kiln-drying schedules, for adoption, dards of Government and Building Authorities to o for the respective ‘key’ timber species. meet the criteria of: o Lyctine susceptibility Period o Treatments HI – H5 levels • Minimum 120 days depending on requirements o Durability (natural) and tasks to be undertaken o Stress grades • Additional time required to arrange and organise o Engineering and design seminars, workshops and meetings with relevant o Light framing code departments and subsequent travel. Exterior joinery incl., window frames re. fire (re- o • Additional time required to develop standards to tardant) proofing finality e.g. a nomenclature and timber treatment Permeability of hardwoods to pressure treatment o standard. Note: This will entail preparation of submissions and meetings with the relevant institutions including gov- • Additional time required to collate existing data ernment departments, building authorities (local and formulate suitable kiln-drying schedules for and state), timber importer’s associations etc., in the key timber species. both Australia and New Zealand. References 4) Discussion with relevant institutions and authorities Eddowes. Peter, J (in ed.). Wood in Papuasia — TheTimbers, re codes of practice and compliance in respect of: their Properties and Uses. Gold Coast, Queensland, 4.1 Type of timber treatments. Australia. 4.2 Chemicals/Applications (as acceptable). Eddowes. Peter, J (2005). Solomon Islands Timber. Solomon 4.3 Hazard levels re. HI–H5. Islands Forestry Management Project (SIFMP II). AusAID, Canberra, ACT, Australia. 5) Development and publication of a Solomon Isl- Eddowes. Peter, J (2005) Sawing and Treatment of Wood in ands Standard on timber treatments/application the Solomon Islands -Manual 1. Solomon Islands etc. regarding domestic and export markets. Forestry Management Project (SIFMP II) AusAID, Canberra, ACT, Australia. 6) Prepare and publish (for local operations) a work- Eddowes, Peter, J (1995-2005). The Forests and Timbers of ing manual in simplified English to explain and Papua New Guinea (unpublished data). outline the requirements for ‘compliance’ with

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Eddowes. Peter, J (1998). Evaluation of the conservation port prepared for the Economic Social Commission status and utilisation of threatened tree species of Asia & Pacific (ESCAP). Bangkok, Thailand. Papua New Guinea and, including those species of Eddowes. Peter, J (1980). ‘Lesser Known Timber Species’ of Solomon Islands and Irian Jaya as appropriate. In: SEALPA Countries -A Review and Summary. Final The World List of Threatened Trees; Sara Oldfield, publication of the long term study commissioned by Charlotte Lusty & Amy MacKinven. World Conser- the South East Asia Lumber Producer’s Association vation Press. IUCN Publications Services Unit, Cam- (SEALPA). Jakarta, Indonesia. bridge, United Kingdom. Eddowes Peter, J (1977). The Utilisation of Papua New Eddowes. Peter, J (1992). Timber Utilisation in the Papua Guinea Timbers (Revised Edition) Office of Forests, New Guinea Building Industry. Paper prepared for Hohola, Papua New Guinea. and presented to Papua New Guinea Institute of Ar- chitects Seminar; Building Towards 2000. ‘Timber Eddowes. Peter, J (1977). Commercial Timbers of Papua Utilisation and Wood Preservation’. Port Moresby - New Guinea - Their Properties andUses. Office of Papua New Guinea. Forests, Hohola, Papua New Guinea. Eddowes. Peter, J (1990). Backwards to the Future - Is Proc- Foreman. D.B (1971). Checklist of the Vascular Plants of essing in Papua New Guinea a Viable Proposition? Bougainville, with descriptions of some common for- In: Millett, John (Ed.) Log Export to Processing - est trees. Bot. Bull, Division of Botany., Dept. of Policies Revisited the Forests, Lae, Papua New Guinea. Risk Evaluation. Institute of National Affairs, Port Moresby, Forestry Division, Ministry of Natural Resources (1979). Papua New Guinea. Solomon Islands Timbers, timber booklet No. 1 (ma- jor species) and timber booklet No.2 (minor species). Eddowes. Peter, J & Tong Kok Hung (1990). Asia Pacific as Government Printing Office, Honiara, Solomon Is- Markets for Tropical Hardwoods Paper prepared for lands. and presented at the Malaysia Timber Industry Board (MTIB), Gunn. B., Agiwa. A., Bosimbi, D., Brammall. B., Jarua. L& Uwamariya. A. (2004). Seed Handling and Propaga- Asia Pacific Timber Conference. Kuala Lumpur. Malaysia. tion of Papua New Guinea’s Tree Species. CSIRO Eddowes. Peter, J (1989). Development of a Processing Sec- Forestry and Forest Products, Canberra. Australian tor in the Papua New Guinea Forest Sector. Ref: SCS Centre for International Agricultural Research. ADB/89-116. Report prepared for the Asian Devel- Keating. W.G., & Bolza, E (1982). Volume 1 Characteristics, opment Bank, Manila, Philippines. Properties and Uses of Timbers. Eddowes. Peter, J (1988). Value Adding: A Case Study - South-east Asia, Northern Australia and the Pacific. Division ‘Log Exports Versus Processing’. of Chemical Technology (formerly Division of Build- Paper prepared for and presented to the Institute of National ing Research). Commonwealth Scientific and Indus- Affairs (INA) Forestry Seminar. Port Moresby, Papua trial Research Organisation (CSIRO). Inkata Press. New Guinea. Melbourne, Sydney and London. Eddowes. Peter, J (1985). The Forest Resources of Papua McCombe. B.M (1968). Trials of British Solomon Island New Guinea. Species for Plywood Manufacture. Paper prepared for and presented to The Australian Timber Lab., Report No.1, Division of Forest Products, CSIRO, Industry Stabilisation - AUSTIS Conference. Port Melbourne, Australia. Moresby, Papua New Guinea. Pleydell. G.J (1970). Timbers of the British Solomon Islands. Eddowes. Peter, J (1984). Utilisation of Small Dimension Lever Pacific Timbers Limited. BSIP Protectorate. Logs and Under-Utilised Timber Species - Review United Africa Co. (Timber) Limited, London. Paper (Indonesia, Malaysia, Philippines, Singapore). Sosef. M.S.M., Hong. H.T., & Prawirohatmodjo. S (Editors) - FAO: RAS/78/010. Working Paper No: 28. Forest Industries 1998. PROSEA- Plant Resources of South East Asia Development Group-Asia Pacific Region. Food and 5. (3) Timber trees: Lesser-known timbers. Backhuys Agriculture Organisation (FAO) of the United Na- Publishers, London 1998. tions. Kuala Lumpur, Malaysia. Whitmore. T.C (1966). Guide to the Forests of the British Eddowes. Peter, J (1981). The Utilisation of ‘Lesser Known Solomon Islands. British Solomon Islands Protector- Species’ of Tropical Timber in South East Asia and ate Government. Oxford University Press. U.K. South West Pacific Region. Study undertaken and re-

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Annex 5 Documentation for export of logs from the Solomon Islands (Ministry of Forestry)

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Annex 6 Documentation for export of sawn timber from the Solomon Islands (Ministry of Forestry)

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