8. WOOD BASED INDUSTRIES

8.1 Status

In Myanmar log export is now being gradually reduced so as to promote downstream processing. However due to lack of infrastructure and appropriate technology, the complete ban on log export may take some time. The MTE currently possesses 86 sawmills, 5 plywood factories, 5 furniture factories and 2 moulding factories. Except for one sawmill that consumes 54,070 m³ of timber per year, the annual input capacity of each mill is not more than 21,630 m³. At present one plywood factory is running under joint-venture with a foreign firm. There are also private sawmills and many downstream wood processing industries all over the country, but mostly on small scale. However a few of them are capable of manufacturing export-quality products.

8.2 Timber Production

Production of teak and other hardwoods from 1988-89 to 1994-95 is as presented in the following table.

(in `000m³⁾

Fiscal	Teak		Other hardwoods		Total
year	logs	Sawn timber	Logs	Sawn timber	Logs	Sawn timber
1988-89	506	67	575	148	1,081	215
1989-90	594	97	735	188	1,284	285
1990-91	625	77	865	170	1,490	247
1991-92	550	82	966	168	1,516	250
1992-93	489	90	890	164	1,379	254
1993-94	470	58	1,075	167	1,545	225
1994-95	358	64	744	255	1,102	319

Source - Statistical Yearbook, 1995 CSO

Annual production of teak logs during the 7-year period varied from, 358,000 m³ to 625,000 m³ and that of teak sawntimber from 58,000 m³ to 97,000 m³. For other hardwoods, the annual production of logs varied from 575,000 m³ to 1,075,000 m³ while that of sawntimber, from 148,000 m³ to 255,000 m³. The above figures indicated that during the period, the annual production of non-teak hardwoods had been well below the prescribed AAC.

8.3 Export of Teak and Other Hardwoods

The status of export of teak and other hardwoods for 7 years from 1988-89 to 1994-95 is as shown in the following table.

(in '000m³)

Fiscal	Teak		Other hardwoods		Total
year	logs	Sawn timber	Logs	Sawn timber	Logs	Sawn timber
1988-89	201.17	33.25	145.10	0.89	346.27	34.14
1989-90	247.29	54.71	204.56	0.14	451.85	54.90
1990-91	318.92	37.36	488.06	0.14	806.98	37.50
1991-92	203.88	39.34	380.76	0.11	584.64	39.45
1992-93	235.28	45.85	341.17	0.33	576.45	46.18
1993-94	275.49	36.20	532.92	1.47	808.41	37.67
1994-95	179.23	33.12	134.71	2.71	313.94	35.83

Source - MTE and FD.

The export of logs of teak was at its maximum in the year 1990-91 at 318,920 m³ and other hardwoods at 532,920 m³ in the year 1993-94.

The total value of export of timber and other products amount to US$ 156.27 million (920.43 M.Kyats) in 1992-93, US$ 156.92 million (924.24 M.Kyats) in 1993-94 and US$ 198.51 million (1169.23 M.Kyats) in 1994-95. (See appendix II(a)) Some information on timber marketing by MTE, JVs and private Sector for 1995-96 are as follows.

Export earnings of forest products by MTE.(1995-96)

Sr. No.	Particulars	Units	Quantity	Value (million US$)
1	Teak logs	m3	106,803	63.16
2	Teak lumber	m3	31,375	11.80
3	Hardwood logs	m3	8,997	1.20
4	Hardwood lumber	m3	1,579	0.20
5	plywood	m2	77,522	0.04
6	Veneer	m2	65276	0.01
7	parquet	m3	627	0.63
8	Lam parquet	m3	1,007	0.70
9	Furniture	-	-	0.01
10	finger joints	m3	2,229	1.54
11	Other timber by tender			109.06
12	Teak logs additional sales	m3	5,689	4.40
	Total			192.75

Export earnings of JV and private sector in the same period are US$ 15.52 million from 7720 m³ of timber from tenders.

8.4 Domestic Sales

The recorded total value of domestic marketing of timber and other products amounts to US$ 188.44 million (1109.88 M.Kyats) in 1992-93, US$ 208.25 million (1226.61 M.Kyats) in 1993-94, and US$ 213.27 million (1256.16 M.Kyats) in 1994-95. (See appendix II(b)). Domestic sales of timber and other products for 1995-96 are as follows.

Domestic distribution of timber and other products in 1995-96

Item	Unit	Quantity	Value (million US$.)
1. Teak lumber	m3	17,348	31.19
2. Other HW lumber	m3	244,829	157.00
3. Teak log	m3	5,516	4.41
4. Other HW logs	m3	102,829	34.61
5. plywood	m2	169,732	16.32
6. Furniture	m2	x	7.50
7. Others		x	23.84
Total ..			274.87

8.5 Promotion of Timber Industry Base

In support of timber export policy of gradually decreasing the export in log form, the MTE has undertaken a number of steps to promote the export of good quality lumber and other processed semi-finished and value-added products. Out of 5 plywood factories, Plywood Factories No.3 and No.4 are now producing teak and non-teak hardwood veneers primarily for export. The MTE also established 5 furniture factories for both domestic and overseas markets. No.4 and No.5 Furniture Factories are now adopting buy-back systems on contracts with BRIANTEA of Italy and with M/S Fujimoto Co.Ltd. of Japan respectively. The two furniture factories are producing flooring boards and strips, and are solely for the export market. Similarly, No.1 Moulding Factory is practising a buy-back system with a foreign company. The factory will produce a number of varieties of moulding and the factory's production capacity is about 700 m³ per year. No.2 Moulding Factory has been set up with the help of Asia Bank's loan. Its production capacity is 3,400 m³ per year and will produce parquet, lam parquet, PTG, moulding and decking. The products are primarily for the export markets. A Rattan Factory has been operating since 1988 using the buy-back system with FINE TREAING CO.,(Korea). No. 1, No.2 and No.5 Plywood Factories are producing plywoods for both domestic and export markets. These factories are producing teak as well as non-teak hardwood plywood. The MTE is exporting a number of value-added forest products such as lumber, plywood, veneer, wooden furniture, parquet, lam-parquet, decking, tongue & groove and processed rattan. If obsolete machinery, still in use, are replaced with modern ones, many of the existing mills and factories would be able to produce good quality furniture and other products for export. Spare parts for machinery, regular and sufficient supply of raw materials, reliable power supply and provision of skilled workers are among the essential requirements to promote the existing forest industry base.

8.6 Pulp and Paper

The major types of fibrous raw material resources available for the pulp and paper industry are bamboos, tropical hardwoods and agriculture residues. Bamboo in Rakhine and Tanintharyi present huge potentials for pulp and paper industries. Kayin-wa (Mellocanna bambusoides) in Rakhine has an estimated growing stock of 21 million metric tons capable of producing around 830,000 tons of pulp annually while pure bamboo stands in Tanintharyi having a growing stock of 6 million tons could provide an annual pulp yield of 244,000 tons, if the bamboo forests are worked in a 10-year cutting cycle. Tropical hardwoods are another major resource for the pulp and paper industry. Typically, the tropical hardwood forests in Myanmar are made up of a large variety of species growing in mixture. Out of (300) species recorded only (30) species are extracted for timber production and the remaining species are available for the promotion of pulp and paper industry. Apart from bamboo and hardwood resources, there are some agriculture residues which are in hand as available raw materials for the establishment of small scale pulp and paper mills and cottage industries.

The Myanmar Paper and Chemical Industries (MPCI) is the main organization responsible for producing pulp and paper in the country. There are 5 pulp and paper mills, namely: the No.1 pulp and paper mill (Sittoung) with a capacity of 60 ton/day producing mixed pulp from bamboo and hardwood, No.2 mill (Yeni) producing 10 ton/day of paper with pulp from the No.1 mill and 30 ton/day of bamboo kraft sack paper, No.3 mill (Ma-U-bin) with a designed capacity of 6 ton/day of jute board from jutestick, the Wrapping Paper Mill (Kanbe) producing 3 ton/day of wrapping paper from waste paper, and the pulp and paper Pilot Plant (Hmawbi) producing toilet paper. In the private sector there are more than 300 small cottage paper factories using recycled waste paper with capacity ranging from ¼ to ½ ton/day. Production in the early years are as follows.

Sr.	Factory/Commodity	Production (Metric ton.)
No.		1989-90	1990-91	1991-92
1	No.1 paper mill (Sittoung) - writing and printing paper - pulp	6,604.76 705.78	3,872.61 750.06	6,411.89 1,546.79
2	No.2 paper mill (Yeni) - writing and printing paper - kraft sack paper	1,556.43 5,690.80	1,177.35 4,365.97	1,589.39 4,733.84
3	No.3 paper mill (Ma-u-bin) - card board	-	267.00	640.88
4	Pilot Plant (Hmawbi) - toilet paper - card board - straw pulp	- - -	197.69 239.36 -	161.66 248.95 41.63
5	Wrapping paper mill (Kanbe) - wrapping paper	1,090.09	938.20	972.50
	Total	15,647.86	11,808.24	16,347.53

Source - MPC 1

The pulp and paper Industry in Myanmar is still in its infancy and has maintained a modest rate of development. Despite the huge potential of resources the present production of pulp, paper and paperboard has not reached the demand of the country and considerable tonnage of different grades of paper and paperboard still have to be imported resulting in considerable drainage of FE, for example, US$ 7.9 million in 1994-95. The projection of paper requirement of major grades are shown in appendix(III). MPCI, however, has gained considerable experience in producing pulp and paper from bamboo and tropical hardwoods supported by research and development works of the Pulp and Paper Research Department at the Myanmar Scientific and Technological Research Department (MSTRD). A memorandum of understanding between the Government of Myanmar and Grasim Industries Limited of India for the establishment of a Rayon grade pulp plant was entered into in 1994 and the feasibility of establishing such a plant is now under study in the Rakhine State.