By Orton Kiishweko, featured in Daily News 6th October 2009
The Government’s efforts to effect a value added goods market received a boost yesterday when a forestry company announced its foray into wood supply chain with expected annual export revenue of 130bn/-.
The company’s entry into the processing industry incidentally comes following recent UN data, showing that demand for paper products in Europe is expected to increase by 80 per cent by 2030.
Europe is one of the projected high end major markets for Kilombero Valley Teak Company (KVTC) products expected to start leaving the Dar es Salaam port in two months time, according toe the Forest Products Manager, Mr Hans Lemm.
Mr Lemm said the East African high end markets would eat up 10 per cent of the company’s products in the projected market size in the next six months after processing started in September this year.
On certainty of the products’ reception onto the European markets, the General Manager, Mr Riaan Van, noted during the announcement yesterday that KVTC had already been certified under the TLTV scheme which guarantees buyers that the products were legally sourced and are sourced from well-managed forests. This is a step taken by large scale wood producers all over the world in line with the European law passed earlier this year, calling for all wood companies to start providing information about the source of the products they trade in the EU.
The EU is one of the main projected markets for Tanzanian companies’ products.
The move by European markets was to ostensibly protect the forests but also clean the trade as Governments streamlined the commercialisation of forest produce.
Such large scale companies have been in the spotlight in their quest to get land for their activities, but KVTC cleared the air when they noted that all their procedures had been audited by both national and international bodies.
Their venture into processing has seen the company construct a modern sawmill and wood processing facility from which teak flooring and other products will be exported from the country.
The processing plan, which is the largest sawmill in Africa outside South Africa, was commissioned in August, this year and is expected to generate export revenue in excess of $10 (130bn/) each year.
It is a result f the company’s transformation programme from plantation development into commercial forestry and wood processing operation.
Mr Van said other important markets were the United States, Southeast Asia and the Indian domestic market, explaining that: “We expect significant sales due to the fact that we add value to our products.”
By 2015, the company will be buying products from small-scale producers, some of whom are neighbours in Kilombero, being supported with technical knowledge and teak tree seeds for their schemes.