3.1 Forest resources
3.2 Regeneration of forests
3.3 Forest Industries
3.4 Export and import of Processed Wood Products
3.5 Sawmilling
3.6 Sliced veneer
3.7 Plywood
3.8 Particleboard
3.9 Furniture and joinery products
3.10 Ger production
3.11 Development programme
3.12 Forest legislation
The total forest area of Mongolia is 17.5 million ha or 11.2% of the total land area. The area of potentially exploitable forest is estimated to be between 5 and 6 million ha. The average growing stock in the northern forests vary between 54 and 79 cubic meters/ha in the whole forest area, and between 100 and 154 cubic meters/ha in the exploitable forests by regions. The total growing stock is 1.3 billion cubic meters and the exploitable volume 6 million cubic meters. The average tree size in exploitable forests varies between 0.45 and 0.58 cubic meters. Shares of Tree Species gives in Table 2. The forests are mainly located in the northern parts of the country along the Russian border forming a transition zone between the Siberian taiga forest and the Central Asian steppe zones. The forest areas of Mongolia are given in Map 1.
Table 2 - Shares of Tree Species by Main Regions.
|
Tree species |
Region |
||
|
Central |
Western |
Eastern |
|
|
Larch (Larix Sibirica) |
54 |
94 |
66 |
|
Pine (Pinus Silvestris) |
16 |
|
10 |
|
Cedar (Pinus cembra, var. sibirica) |
12 |
6 |
12 |
|
Spruce (Picea obovata) |
3 |
|
|
|
Birch (Betula spp) |
13 |
|
12 |
|
Total |
100 |
100 |
100 |
There are also significant areas of arid forest and shrub land in the southern and southwestern parts of the country. According to the year 1987 estimates this area consists of 90% Saxaul forest and 10% Tamarix spp. This forests are strictly protected and subject only to limited exploitation to meet local needs for fuelwood. The forest zone is located 800-2,500 m sea level. The forest area is divided into following slope classes;
|
Slope class |
Percent of forest area |
|
0- 10o |
5 |
|
11-20o |
55 |
|
21o + |
40 |
All forests and land in Mongolia are state owned. The Ministry of Nature and Environment (MNE) has the main responsibility for the management of forests. The Forestry and Wildlife Research Institute under the MNE is responsible for forest resources inventory, and scientific and technological development in forestry. The Units of forest and Ranting under the provincial governments are responsible for forest management at local level.
The annual logging volume was on the level of 2.5 million cubic meters in the 1980s. The MNE reduced the annual allowable cut (AAC) to one million cubic meter to control deforestation in 1990.
According to MNE the forest area has decreased by 1.2 million ha during the last 20 years. Forest fires are damaging some 200,000 ha of forests annually. About 50,000 ha have been planted during the last 20 years, but parts of the cut-over and burned areas are regenerating naturally reducing the total losses.
The main objective of forest resource management would be to protect and develop the existing forests of Mongolia so that they make maximum contributions to soil and watershed protection, and conservation of existing ecosystems. At the same time the forests would produce, on a sustainable basis, increased volumes of industrial wood, fuelwood and minor forest products to the needs of people, and earn highly needed foreign currency through the export of wood products. The proper management and utilization of forests would create employment and income to people in the less developed parts of the country.
It is expected that the production of commercial wood and fuelwood could be increased from the current level of 1.0 million cubic meter a up to 3.0 million cubic meter a by the year 2010 by more intensive management forests, by regenerating the cut-over and burned areas effectively, by reducing logging waste, and by opening new forest areas for development though building and upgrading roads. However, this must be verified by forest management plans.
Forestry is a long-term activity which must be guided by far-sighted strategy and planning to ensure the balanced development of resources. Proper planning takes into account e.g. forestry, institutional, economic, environmental and social objectives of the country. Without an overall plan the different subsections will be developed without adequate integration.
There are some evident and urgent development needs which should be started immediately. Such urgent tasks include:
· Continuation of the national forest inventory
· Preparation of forest management plans for major forest areas
· Development and use of more effective regeneration methods
· Development of wood harvesting methods
· Construction and upgrading of access and forest roads
· Development of forest policies and institutional framework (including human resource development).
It is estimated that during the period 1975-1995 only 10% of the harvested areas were regenerated by planting. The annual rate of new planting has increased from 4,000 hectares in 1991 to 5,000 hectares in 1994. In 1995 the Forestry and Wildlife Research Institute prepared a report forecasting new areas of planting to 2010. The report provides a medium term forecast describing the five years out to the year 2000. The report estimates new planting to be between 6,000 hectares and 8,000 hectares per year during this period with a best estimate of 7,000 hectares.
In the longer term, from the year 2001 to the year 2010, the report expects new planting to be between 8,000 hectares and 40,000 hectares with a best estimate of 24,000 hectares per year1.
1 This would be a major jump from the average of only 2,500 ha/year over the past 20 years (Editor).
Even if some areas regenerate naturally after logging the situation is not satisfactory. Without artificial regeneration the share of birch and aspen will increase, and some areas may be converted into grassland in the harsh climate. According to the Forest law of Mongolia the logging enterprises are responsible for the regeneration of cutting areas, but only the biggest logging companies have taken care of the regeneration, while the smaller ones have ignored it. It is still unknown, if the new Forest law will improve the situation, but in general the laws and regulations are ineffective if the economic base is missing.
The current regeneration method consists of piling and burning of logging waste, manual site preparation and planting of bare-root seedlings. The nursery grown seedlings are 2-3 years old. The most common planted species are pine and larch. The survival rate of seedlings is reported to be only 30-65%. The low survival rate is due to the following reasons:
· harsh and dry climate
· poor quality of seedlings produced in nurseries
· inadequate site preparation and poor planting techniques
· neglected maintenance of plantations
· uncontrolled grazing.
As the areas requiring reforestation are much larger than the available resources, the optimum working methods should be developed. In the first phase the whole regeneration system should be thoroughly analyzed. The conditions where natural regeneration gives acceptable results should be clarified, and natural regeneration be used in such conditions. Where natural regeneration of desired species cannot be achieved, planting or sowing should be used. The development of planting methods includes the following:
· seed selection and genetic improvement of planting material
· improved nursery techniques
· site preparation
· planting techniques
· maintenance of plantation.
The development of forest regeneration will require extensive research, which should be done simultaneously with the development. Foreign know-how and financing would be necessary to get the development started
Under the centrally planned system most industries were state-owned or joint ventures with the former COMECON countries. The industrial development took place mainly in the north-central region where part of the forest resources are located and which had easy access to the Soviet Union which, at time, was the main trading partner of Mongolia. Mongolia's most important forest industry regions are the Selenge province and Ulaanbaatar.
Industry was strongly import-dependent in technology, industrial consumable and chemicals, and it was highly subsidized. The USSR, Romania and Poland were the joint venture partner in wood industry. Towards the end of the 1980s the forest industry production, with the help of the mentioned countries, grew rapidly. The collapse of cooperation arrangements and the subsequent recession in Mongolia, caused an economic crisis in the industry with decline in production volumes and investments. Currently the forest industry is utilizing less than 30% of its previous production capacity.
The forest industry was controlled before year 1987 by the Ministry of Forestry and Wood Industry. After that the management of natural resources was under the responsibility of the Ministry of Nature and Environment.
The management of the wood working sector was under the responsibility of the Ministry of Agriculture and Industry. In the beginning of the 1990s the government formulated a reform programme for transition from centrally-planned economy to the free market economy. In the very beginning of the reform the forest industry was left aside, and attention was paid to more critical sectors of the industries. However, later on the reform was extended also to forest industries. This included the privatization of state-owned enterprises and many reforms in industry. Large industrial enterprises were divided into smaller production units of individual factories. These units and other previously state-owned enterprises have been reorganized into joint stock companies.
The number of wood working companies operating in Mongolia, according to the 1994 statistics, is 49 of which most are sawmills and small scale joinery or furniture factories. The other mills include one veneer slicing unit, one plywood mill and two particleboard factories. Besides these there is one tissue paper mill, one cardboard paper mill and one match factory. The locations of the main wood industry units are given in Map 2. The division of big mill complexes into smaller units for privatization caused an increase in the number of wood working enterprises. The number of enterprises has increased also through new companies established by private capital. The number of employees has decreased rapidly in forest industry after the restructuring and privatization program was started. During the last three years the number of employees has come down from 10,500 people to about 7,000 people. The number wood working units employees given in Table 3.
Table 3 - Number of Wood Working Units and Their Employees
|
item |
1991 |
1992 |
1993 |
1994 |
|
units |
34 |
23 |
51 |
49 |
|
employees |
9,053 |
10,500 |
8,150 |
6,980 |
There is substantial difference between the operations of privatized companies and the new private enterprises established after the year 1990. One reason for the difference is that the privatized companies have still as a burden the old operating systems of the centrally planned economy. It takes time to reorganize the management, labour force and operations of the companies to cope with the market economy. The new private enterprises seem to have better organized management and operations than the privatized companies. The condition of private companies seems to be better financially as well as technically. These companies also achieve better productivity and product quality than the privatized companies. The production of main forest industry products in 1990-1994 is given in Table 4.
Table 4 - Production of Main Forest Industry
|
item |
unit |
1990 |
1991 |
1992 |
1993 |
1994 |
|
Sawnwood |
1000 cubic metre |
509 |
270 |
124 |
98 |
129 |
|
Plywood |
1000 cubic metre |
3.4 |
1.9 |
1.0 |
- |
- |
|
Particleboard |
1000 cubic metre |
5.5 |
1.1 |
0.8 |
- |
- |
|
Windows and doors |
1000 cubic metre |
398 |
98 |
15 |
14 |
16 |
|
Furniture |
Million T |
31 |
- |
45 |
42 |
98 |
|
Matches |
Mill boxes |
26 |
29 |
17 |
25 |
25 |
|
Cardboard |
t |
819 |
968 |
- |
- |
- |
The consumption of industrial forest products per capita in Mongolia is very low. The consumption of sawnwood, which is the main industrial forest product, was 0.04 cubic metre per capita in 1994 while the average consumption in Europe is far higher. The consumption of other products such as plywood or particleboard is also low. The current economic situation in the country has hit hard the building industry which is one of the main consumers of wood products. Low contraction activity has a direct effect to the demand of forest products especially when the export of the products is small compared to the available production capacity.
The landlocked position of the country and the transport /transit problems are an obstacle to foreign trade, and the forest industry serves mainly home markets. Some trade, anyway, is existing. Previously the Soviet Union used to be the main trading partner, but recently Chine has taken its place as distension for export.
After the export of roundwood was banned in the beginning of 1995, the only export product, by volume and value, has been sawnwood.
The export volume of sawnwood was over 120,000 cubic metres in the middle of the 1980s, and declined to average level of 80,000 cubic metres a towards the end of the decade and in the beginning of the 1990s. In 1994 the export dropped down to 46,000 cubic metres.
The import of wood-based products consists of paper and wood-based panels which are currently not produced in the country. Some furniture is imported too. The import volumes of panels for construction or furniture manufacturing are rather small compared with the previously produced volumes. There is a big demand for imported products but high transportation costs and inflation in the country strongly limits the imports to the most critical needs and to some luxury furniture. The volumes and values of export and import of wood industry commodities are presented in Tables 5-6.
Table 5 - Export Volumes and Values of Forest products
|
item |
unit |
Volumes |
values (1000 US$) |
||||
|
1992 |
1993 |
1994 |
1992 |
1993 |
1994 |
||
|
Logs |
1000 cubic metre |
0.8 |
11.5 |
25.5 |
50 |
555 |
2,093 |
|
Sawn Timber |
-.- |
87.4 |
74.6 |
46.3 |
13,127 |
8,684 |
5,201 |
|
Plywood |
-.- |
- |
0.05 |
0.02 |
- |
5 |
3 |
|
Sliced Veneer |
-.- |
0.1 |
- |
- |
- |
- |
- |
|
Wooden furniture |
set |
- |
1.1 |
1.6 |
28 |
22 |
102 |
|
Paper and Paper Products |
t |
0.5 |
- |
0.1 |
36 |
29 |
9 |
|
Total |
- |
- |
- |
- |
13,241 |
9295 |
7,408 |
Table 6 - Import volumes and values of forest products
|
Item |
Unit |
Volumes |
Values (1000 US$) |
||||
|
1992 |
1993 |
1994 |
1992 |
1993 |
1994 |
||
|
Logs |
m3 |
- |
750 |
- |
- |
-15 |
- |
|
Sawn timber |
m3 |
3,822 |
2,674 |
449 |
113 |
351 |
24 |
|
Particleboard |
m2 |
26,827 |
6,564 |
60,940 |
20 |
10 |
69 |
|
Plywood |
m2 |
30 |
183 |
2,737 |
- |
1 |
67 |
|
Sliced Veneer |
m2 |
- |
- |
141 |
- |
- |
8 |
|
Wooden matchbox |
1000 box |
- |
14,400 |
3,062 |
- |
172 |
25 |
|
Windows and doors |
m2 |
- |
- |
1,140 |
- |
- |
4 |
|
Wooden furniture |
set |
- |
98,862 |
8,006 |
1,460 |
1,023 |
705 |
|
Paper and paper products |
t |
1,369 |
- |
3,480 |
1,053 |
631 |
558 |
|
Cardboard products |
pcs |
21,691 |
85,949 |
11,593 |
21 |
34 |
4 |
|
Total |
- |
- |
- |
- |
2,667 |
2,237 |
1,464 |
Sawmilling is the main forest industry activity in Mongolia. The highest achieved production in the middle of 1980s was close to 600,000 cubic metres annually which could be considered as the capacity of the industry at the time. That production consumed 1.2 million cubic metres of sawlogs. Currently sawmills are running below 30% of the capacity utilization rate. Production of 1994 shows some increase in output volume, and it is estimated that the growth will continue slowly in 1995 and a little faster during the following year boosted by the recovering economy of the country.
After the export ban of roundwood, sawnwood is and will b the only exportable forest industry product in the nearest future. To meet the domestic demand for sawnwood, and to earn urgently needed foreign currency the rehabilitation and development of sawmilling industry is most important. In the first state the rehabilitation should include the general overhaul of the equipment and small investment to remove bottlenecks in production and to improve product quality. In the second stage, sawmills should start to invest in new production technology to expend the capacity, to reduce production costs and to improve the efficiency.
The use of modern portable sawmills could be a solution for sawnwood production in remote areas or at harvesting far from industrial units. This approach would reduce the transport problems and profitability, as only the finished or semi-finished products need to be transported.
There is on production unit of sliced veneer in Ulaanbaatar. This unit was closed down some years ago because of too high operating costs and difficulties to obtain raw material and team for heating of logs. Another reason for the closure was decreased demand for sliced veneer during the recession. Pine and larch were the main wood species used as raw material. The main machinery of the unit consists of one vertical and one horizontal slicer. The installed capacity of the unit is 2 million square metres of sliced veneer annually.
Production of sliced veneer could be restarted either at its current or completely new location, assuming that raw materials, steam and other production elements will be available at reasonable costs. The estimated production capacity would be 2 million square metres.
The only plywood mill producing plywood from rotary cut veneer is located in Sykhbaatar in the Selenge province. Pine has been the main raw material. The production of the mill was stopped in 1992 due to shortage of production chemicals. The mill has an installed capacity of 9000 cubic metres annually. The highest achieved production has been 7,000 cubic metres annually. The production line consists of log storing and heating vats, and dryer lines with clipping and jointing facilities. For pressing there is a 15 dalights press producing panels of 1515 mm x 1515 mm in size. For the finishing of plywood there are trimming and sanding facilities.
The production machines of the plywood mill are old and worn out, but they could be restarted after major overhaul. The mechanization level of the mill is low, but there might be possibilities to increase the production volume to 10,000 cubic metres annually by further mechanization and reorganization of production operations. The expansion of the production capacity of the existing mill or the construction of a second plywood mill may also become actual in the future.
There are two particleboard factories in Mongolia. One is located in Ulaanbaatar and the other in Sykhbaatar. The mill in Ulaanbaatar has an installed capacity of 5,000 cubic metres annually but the production has varied between 1,000 and 3,000 cubic metres. The mill was established in 1983, and no reinvestments have been done since then. The machinery of the mill is worn-out and obsolete and apparently beyond repair. The mill in Sykhbaatar has Policy machinery, and it was built in 1985 The installed capacity of the mill is 18,000 cubic metres annually. The factory used wood waste from sawmills as raw material. The product is one layer board, 16 mm thick, 1,850 mm wide and 2,750 mm long. The existing particleboard mill in Sykhbaatar could be restarted after complete overhaul, and when chemicals are made available. Achievable production could be about 15,000 cubic metres annually. The board quality could be improved by adding equipment for manufacturing of three layer boards. The construction of a new particleboard mill may also become actual by the end of this century.
The further processing of sawnwood and panel products includes furniture and joinery products. Furniture include solid wood products or upholstered furniture sets with wood framework. Joinery products consists of doors and windows. Previously a remarkable portion of products were manufactured in factories established in the connection of large mill complexes. During privatization, factories were divided into smaller units which are now privately owned and operated. There is large variation in technical condition of the enterprises. The quality of most products is low, and many buyers prefer imported furniture, which have better quality. Only few enterprises can achieve an acceptable quality level.
There is a huge need to reorganize the furniture and joinery industry to make them capable of producing saleable products and to increase the variability of the companies. Professional and training assistance is needed to rehabilitate the industry. The rehabilitation should concern all operations of the companies from management to production planning, production processes and quality control.
One less known, but nationally important, industry sector which uses sawnwood and wood-based panels is "ger" production. "Gers" are traditional Mongolian houses, where people are used to live. There are 6 factories in Mongolia producing wooden components and furniture for "ger". The biggest manufacturer produces about 1,200 "gers" and the others 300 "gers" each annually. Although the sawnwood consumption of "ger" industry is only about 3,000-4,000 cubic metres annually, the "ger" production is important to the country because it is estimated that more than half of Mongolians live in "gers". In addition, "ger" production is an excellent sample of cooperation and network of different kind of producers.
A development plan for the Mongolian forest industries up to the year 2005 was prepared in cooperation with planning institutes of the Soviet Union and Mongolia in 1988. The plan was based on higher annual cuts than is now regarded feasible, and after the change from centrally planned economy to free market economy was started, the basic assumptions behind this study became invalid. As a result, the plan has never been implemented.
The other recent programmes are the "Forest resources protection Programme up to 2005" and the "Reforestation Programme" developed by the Forest and Wildlife Research Institute of MNE.
The overall development and the growing population in Mongolia will require that increasing volumes and higher quality forest industry products like sawnwood, wood-based panels and further processed will be available.
The main objective of forest resource management would be to protect and develop the existing forests of Mongolia so that they make maximum contributions to soil and watershed protection and conservation of existing ecosystems. A the same time, the forests would produce on a sustainable basis, increased volumes of industrial wood, fuelwood and minor forest products to the needs of people and earn highly needed foreign currency through the export of wood products. The proper management and utilization of forests would create employment and income to people in the less developed parts of the country.
It is expected that the production of commercial wood and fuelwood could be increased from the current level of 1.0 million cubic meters up to 3.0 million cubic metres by the year 2010 by more intensive management of forests, by regenerating the cut-over and burned areas effectively, by reducing logging waste and by opening new forest areas for development through building and upgrading roads. However, this must be verified by forest management plans.
Forestry is a long-term activity which must be guided by far-sighted strategy and planning to ensure the balanced development of resources. Proper planning takes into account, e.g. forestry, institutional, economic, environmental and social objectives of the country. Without an overall plan the different subsectors will be developed without adequate integration.
There are some evident and urgent development needs which should be started immediately. Such urgent tasks include:
· continuation of the national forest inventory
· preparation of forest management plans for major forest areas
· development and use of more effective regeneration methods
· development of wood harvesting methods
· construction and upgrading of access ad forest roads
· development of forest policies and institutional framework (including human resource development).
The current condition of the industries is not sufficient to satisfy the future demand and quality requirements of all forest industry products.
The industrial development programme is proposed to be implemented in two phases. The first phase would include the preparation of rehabilitation plans for the existing industries. The second phase would include investments in new technology and equipment in the existing mills and construction of new production capacity.
The rehabilitation and development of industries will require know-how and capital, both of which re not adequately available in the wood industry enterprises. A supporting project/organization would be needed for the start-up period to prepare the development plans, to assist the companies in preparing the feasibilities studies and to assist in the financial arrangements.
The total costs of the proposed development programmes are estimated to be US$19-25 million for forestry development and US$131-165 million for the development of forest industries during the period 1997-2010. In forestry, the biggest investments would be on roads. In forest industries, the main investments would be the rehabilitation of existing wood industries. The investments requirement in forest industries is very high and it may take time before funding can be found for all projects. The feasibilities of different development projects can be determined only through detailed feasibility studies and in the first stage the emphasis should be in making such studies and in financing arrangements.
The investment requirement in forest industries is very high and much work will be required to find funding. The capability of the domestic sector to finance and guarantee the economic growth and investment projects is at the moment limited. Foreign financial support would be needed to employ foreign experts into the development projects and to establish risk capital funds for the development of the wood working industry sector.
International cooperation and support of donor agencies in implementation of development programmes and projects would be for great help to Mongolia
The new Forest law was approved in June 1995. The new law includes the following principles and regulations:
· the protection of forest resources and environment has especially been emphasized· clearcutting of forests is not allowed; the regulations concerning selective cuttings are still under preparation
· the MNE gives the annual logging quotas to the provinces and the provinces select the cutting areas
· logging companies have to plant 3-5 seedlings per felled tree
· the law gives the possibility of increasing royalties considerably from the present levels.
The protection of forests has been emphasized in the new forest law. In addition to the national parks and reserved areas, the following measures are followed:
· around big cities the protection zone has 80 kilometres radius and smaller towns 30 kilometres
· the protection zone is 2 kilometres from major rivers
· logging is prohibited on slopes steeper than 30 degrees
· logging in forests less than 100 hectares in size and 50 metres from forest boundary is prohibited.
The commercial forest area transferred to protected or regulated areas in 1970-1974 is about 3.0 million hectares. There are plans to include the following forest areas in protection zones and reserves:
· area rich in biodiversity
· areas important for endangered species
· ecologically sensitive areas
· areas important for watershed protection
· areas prone to erosion and landslides
· areas important for hunting and recreation
