An example from a developed country - Sweden
An example from a developing country - Congo
Jan Remröd
Swedish Forest Industries Association, Stockholm
Originally, Sweden was a poor and small country up in the north which has in nowadays grown to a rather wealthy country. Forests are an important part of the cause of Sweden's prosperity.
The forest is important for all Swedes. When they grow up, they are fed with sagas and legends where the forest very often plays an important role. The trolls are living in the forests, the children are playing in the forests, the artists are painting in the forests, week-ends are spent in the forests, going mushrooming or hiking and so on.
This is also an environment, in which almost all Swedes want to live - in a red cottage close to the forest. The cottage is of course made of wood - this is the typical building material in Sweden, and, therefore, Sweden is more or less built of wood.
When the first inhabitants came to Sweden around 10 000 years ago, this was about the same time as the forests started to grow. As you may know, Sweden, like the rest of northern Europe, was covered with ice in the earlier days. Thus, the history of people in Sweden and the history of the forests in Sweden are of the same age.
The first Swedes were hunters and fishermen, today very few Swedes earn their living in that way. During the millennia they became farmers, they cultivated the land, but they also started to cultivate the forests: they increased their farming acreage by bum-beating, the cattle were grazing also in the forests and so on in a similar way as what today is happening in many tropical areas of the world.
The wealth of today's Swedes is also due to their ancestors that were pretty few - they were too few to be able to devastate the forests, as what has happened in many other parts of the world.
Ship-building was perhaps, with the exception of house-building, the most important part of wood utilisation in Sweden's medieval period, but its use for the mining industry was also vital: both for heating the ores and blast furnaces.
In the fifteenth century the first sawmill started in Sweden and the role of the forests for the development of the society had a real take-off. At that time the forests in Sweden were around 50 percent deciduous and 50 percent coniferous, but the coniferous part was steadily increasing, because of natural migration, and because oak, birch and other deciduous species were commercially more attractive.
At about the same time Sweden started to export some forest products - another important take-off. At that time the export was rather modest. The products were tar, charcoal, timber and later also potash. Production of potash, which increased to be one of the main export products in the eighteenth century, consumed large amounts of wood - mainly birch and beech, and was one of the reasons to the decline of these species.
The nineteenth century was also for Sweden the industrialisation era. The steam-engine made the sawmills more productive, the mechanical pulping methods were developed and later also the chemical pulping ones. The increased prosperity also increased the number of Swedes from 2 million in the beginning of the nineteenth century to 9 million today.
But this increase of the population also consumed the forests: 100 years ago we had much less forests than today, but since then the forests have been increasing: the growing stock is 3 billion m3 today and is still increasing. There has probably never been in Sweden more trees than today.
At the end of the twentieth century, forestry and forest industry have obviously played important roles in building today's society in Sweden, but, what is the situation today and how do we look upon the future?
The forest industry is still one of the basic industries in Sweden - when an industry is as large as the Swedish forest industry, it is a basic need for many activities, it is the hub in a much larger industry sector than the industry itself.
The mechanical industry is a major supplier to the forest industry: Kværner and Sunds Defibrator are developing and producing new machinery for mechanical and chemical pulping, Valmet in Karlstad is building new paper machines, BTG in Säffle new coating equipment, and these companies have reached their global positions as they have had the Swedish forest industry as a demanding home market.
The chemical industry is growing in importance as a supplier to the forest industry: they have made large contributions in solving many problems in the industry. Eka Chemicals is a leading supplier of both bleaching chemicals and paper chemicals. Kemira and Bim Kemi are other major chemical suppliers.
A modern paper machine is supplied with the same amount of computer power as a jumbo jet. Investments in the control and instrumentation parts are steadily increasing and for companies such as ABB, the pulp and paper industry is a major customer.
Investments in new pulp and paper mills are the largest industrial investments in Sweden, thus they are a main base also for construction and building companies.
Trade of forest products is also a basic factor, as export of forest industry products has been a main issue since the fifteenth century and today it is valued at 85 billion kronor or 15 percent of the total Swedish export.
Service industries, such as different types of consulting firms are also benefiting from the large forest industry in Sweden.
The forest industry is a sector that has the highest rate of transported volumes in Sweden. As a matter of fact, 22 percent of all road transport, 32 percent of all sea transport abroad and 33 percent of all rail transport are for the forest industry. This gives jobs to a large number of transport companies, from the national railway company to numerous haulage contractors, but has also been a major thrust for the truck producers Volvo and Scania, giving them a world leading position.
100 000 employed in the Swedish Forestry Sector
There are around 100 000 people directly employed in the industry and about the same number indirectly employed, which means they are involved in transportation or other activities connected to the industry.
In this respect, the location of the mills is also of great importance. The pulp and paper mills are located far away from the urban areas, and are, in most cases, the dominating employers at each location. The sawmills are mostly located in small villages close to the forests - in many cases the only employer in the village.
The number of employed people in the industry has decreased over the years and at the same time productivity has increased. Mechanisation of the forestry operations and computer control of the production processes are the main driving forces behind this development.
The structure of the forest owners is also of importance. Half of the productive forest land in Sweden is owned by private individuals or families. Just under 400 000 people own 250 000 holdings, giving them their major income.
But the forestry and forest industry are not the only that give the forest owners their major income, there is also Sweden as a country that does the same.
When the first figures on export values were reported in the middle of the sixteenth century, tar, charcoal and timber accounted for 12 percent of the total exports from Sweden. Since then this share has increased to 15 percent, but with another product range.
The forest industry products give the biggest export surplus
But even if the car industry has an export value which is double that of the forest industry, its export surplus (exports less imports) is only half. This export surplus pays for instance for the import of oil, petrol, food, clothes, computers and much more. In Sweden's export-based economy, the forest industry is the main motor.
The forest industry believes in the future. Investments have been of a high level during the past years: three large paper machines have been started since last summer. New sawmills are also under discussion. The research sector is backing up the activities with investments in new equipment for pressing, drying and surface treatment and a new programme for fundamental research in the printing and surface treatment sector.
Investments in the Forest Industry, mills in Sweden, 1980-97
Another important factor is that Sweden is a small country with a homogeneous population; consensus can often be reached in different issues; politicians, bureaucrats and people in the industry are traditionally acting in a rational, pragmatic way. One example is the environmental issues - the Swedish forest industry is one of the world leaders in this area. This position has not been reached because the legislators and the authorities have pushed the industry, but because industry, research institutes and authorities have together identified the problems and discussed how to solve them. Of course, the development is not totally idyllic! The environmental groups have sometimes disagreed and there are pressing demands from critical consumers. However, also this debate has developed from confrontation towards dialogue and consensus. The forest industry is no longer the main focus of the environmental debate.
Even if Sweden's situation seems bright, there are also clouds in the sky and they are mainly of a political nature. There are examples of how the traditional rational way of thinking and decision-making is replaced by a very loosely founded eco-fundamentalism. One example is the energy sector - the Swedish paper industry is consuming 13 percent of all the electric power in the country and they are therefore very critical to the plans to phase out the nuclear power plants and starting already next year with the first one. Some other areas could be mentioned where the paper industry has a different opinion than the government, but no other issue is as important as that one.
The basis for controversies is perhaps that the politicians claim that they have built this country and the forest industry claims that they have built it. However, it can be agreed that Sweden is built of wood.
Otto Schlumbohm
SOCOBOIS, Hannover
Introduction
Dolisie, a town of 60 000 inhabitants
Development of Dolisie between 1974 and 1996
The town of Dolisie is the administrative centre of the Niari region. It is situated about 200 km by road (poor driving conditions) to the north-east of the port of Pointe Noire.
Until 1972/73, Dolisie was the most important logging town in the Congo. It was an eldorado for forest enterprises and wood buyers at that time. The best year was 1971 when more than 500 000 m3 of logs were loaded at Dolisie's small railway station. Many companies were represented there and the town and the 25 000 inhabitants at that time enjoyed a real boom.
From 1974 onward, forestry activities began to stagnate. Little by little, one company after another closed its gates. The agents, the representatives of Caterpillar and Mercedez-Benz and a large number of forestry enterprises and carriers left the town.
Since then the town has been dying economically but experiencing an increase in the population which has now reached more than 60 000 inhabitants, being 2.6 times higher than in 1974.
Four of the five sawmills are closed, only one is working.
SOCOBOIS, situated at 6 km from Dolisie, is the only company that developed in this area.
The socio-economic problems that exist in Dolisie can also be found in the rest of the country, as well as in most parts of the neighbouring countries.
From a maximum of about 4 400 regular employment contracts 10 to 15 years ago, there are now only about 2 600 to 2 700.
In 1983, for example, a new 250-bed hospital was opened, equipped with the most up-to-date technology at a cost of US$ 25 million. Unfortunately, no plans had been made for a revolving fund or to train the technical and medical staff. The present state of the hospital can be imagined.
It should be noted that the town of Dolisie or the Niari region have no regular income since all taxes, dues and duties go to the capital, Brazzaville. Only with difficulty a small share returns to Dolisie. As a result, the people and the town live on the workers' wages and it is hardly surprising that a SOCOBOIS employee may be financially responsible for more than 20 people.
Except from SOCOBOIS, there are no major industrial or other activities and opportunities for employment.
Dolisie is the third largest town in the Congo with 60 000 inhabitants, after the capital Brazzaville with 950 000, and the economic and port town Pointe Noire with 500 000 inhabitants, all three together have 60 percent of the national population which is 2.5 million people. Considering the other small towns, the Congolese urbanisation, with more than 70 percent, is the highest in Africa reflecting the very poor rural development.
Some figures may give a better understanding of the national situation:
|
Congo area: |
342 000 km2, of which 62 percent is covered by forests, mostly dense. |
|
Population: |
2.52 million in 1994 which is 2.6 times more than 20 years ago, and certainly 4.0 million in 2014. |
|
GDP: |
Approximately US$ 580 against a global dept of US$ 2 100 per capita. |
|
Employment: |
105 000 productive jobs and 22 000 officials in 1974, but 78 000 productive jobs and 80 000 officials in 1994. |
In 1974 there were 111 productive job contracts for every 1 000 inhabitants but only 31 jobs in 1994.
Other problems related to the socio-economic situation of the country, and also of Dolisie, are: poverty; malnutrition; hygiene; drinking water; health service; pharmaceutics; basic education and vocational schools; degradation of all kinds of infrastructures like water, electricity, telephone, roads (only 560 km of the existing 12 000 km are tarred); railway; and the Congo river waterways including harbours.
Eighty percent of the food is imported at a cost of US$ 130 million per year, whereas during the 1960s Congo was a food exporter.
Presentation of SOCOBOIS
The Société Congolaise des Bois SARL, Dolisie, Republic of the Congo, was created in 1964.
Wood processing factory
· over 800 workers (650 in the factory, 180 on the forest site);· processing of 70 000 m3 logs/year, of which 30 000 m3 is bought from more than 20 other forest enterprises in the region, into sliced and peeled veneers, plywood and sawnwood.
SOCOBOIS does not export logs, it processes all the logs produced by the company in its forest concessions and purchased from others in the region.
SOCOBOIS investments
|
1964 |
Creation of the Company, Shareholder: Gerhard Wonnemann, a German company in Westphalia |
|
1965 |
Installation of the first peeling line |
|
1968 |
Installation of the second peeling line |
|
1972 |
Logging |
|
1977 |
Installation of a sawmill |
|
1981 |
Installation of the first slicing line |
|
1984 |
Large expansion of the veneer jointing section |
|
1986 |
Panel wood drying shed |
|
1989 |
Installation of the second slicing line |
|
1991 |
Installation of the plywood production line |
|
1994 |
Large-scale modernization of the peeling lines |
|
1995 |
Replacement of forest material |
All investments were realised step-by-step when the previous problems had been solved, such as staff training, product quality and quantity improvement, productivity and cost coverage. Not to mention the many problems related to local administration and transportation on road and railway which have delayed and hampered enormously our ambitious investment programme.
Activities
SOCOBOIS output, 1995
|
|
Export |
Output |
|
Logs (m3) |
0 |
42 500 |
|
Sawn timber (m3) |
3 077 |
11 440 |
|
Peeled veneer (m3) |
22 514 |
22 700 |
|
Sliced veneer (m2) |
7 360 000 |
7 450 000 |
|
Plywood (m3) |
2 307 |
3 500 |
|
Total log processing (m3) |
|
70 200 |
One socio-economic activity with high relevance to environment protection is the production of charcoal from wood processing residues and firewood from bark. The wood residues are given free of charge to the workers and the population of the town. The annual amount of firewood and charcoal used in households is estimated at 4 000 m3 what is the equivalent of 50 000 savannah trees which would normally be cut every year by the population for their energy needs.
SOCOBOIS brings know-how, technology and money to the country and the region.
Staff, training, qualified workers/technicians
It took a long time for SOCOBOIS to have well trained technical staff and qualified workers as there are no vocational training schools for the woodworking sector. As a result, SOCOBOIS has to employ a large number of expatriates working as foremen and section chiefs in the production and as trainers at the factory, in the workshops and at the forest sites.
The ratio between expatriates and nationals has fallen from 1 : 23 in 1965 to 1 : 60 in 1996.
Increase in staff numbers
|
|
1965 |
1970 |
1975 |
1980 |
1985 |
1990 |
1995 |
2000 |
|
SOCOBOIS workers |
150 |
210 |
300 |
545 |
575 |
700 |
830 |
850 |
|
Services |
10 |
20 |
30 |
60 |
145 |
175 |
190 |
200 |
|
Total |
160 |
230 |
330 |
605 |
720 |
875 |
1 020 |
1 050 |
SOCOBOIS-related services are charcoal burners, guards, artisans, school teachers, health services, etc.
In Africa, the family still plays a very important role in social life. Anyone with a regular salary, for reasons of tradition and customary solidarity, is obliged to share it with family members.
And in Africa, the family is very "elastic" and numerous especially when poverty calls for support from more wealthy family members.
I am not a sociologist, but I have always carried out and commissioned surveys amongst the workers on their problems and their daily priorities. Given the financial and salary situation in the country in general, it is not surprising to see that each of our employees is, on average, supporting 21 people, taking care of medical costs, children's school expenses, etc.
The increase in this burden reflects the country's population and poverty growth.
|
|
1965 |
1970 |
1975 |
1980 |
1985 |
1990 |
1995 |
2000 |
|
SOCOBOIS workers |
160 |
230 |
330 |
605 |
720 |
875 |
1 020 |
1 050 |
|
Dependants per worker |
6 |
8 |
11 |
12 |
14 |
16 |
21 |
? |
|
Dependent on SOCOBOIS |
960 |
1 840 |
3 630 |
7 260 |
10 080 |
14 000 |
21 420 |
?? |
The increasingly high dependency rate of people from one earner in the family is typical of poverty in Africa and of course in the Dolisie region.
In conclusion: at least a third of the population of Dolisie depends on SOCOBOIS' industrial activity.
Income-generation in Dolisie
The following table shows the high share of income generated by SOCOBOIS workers which is more than 64 percent compared to the total income of all those employed in the town of Dolisie.
|
|
Employment contracts |
US$/year/ worker |
Total US$/year |
|
SOCOBOIS |
830 |
5 060 |
4 199 000 |
|
SOCOBOIS-related services |
190 |
3 000 |
570 000 |
|
Administration, State and Town |
1 000 |
2 400 |
2 400 000 |
|
Other services |
655 |
2 700 |
1 768 500 |
|
Total |
2 645 |
13 380 |
8 938 300 |
Contribution to public finances in US dollars
|
Year |
Industry |
Forest |
Total |
|
SOCOBOIS |
SOCOBOIS |
SOCOBOIS |
|
|
1991 |
2 054 161 |
880 355 |
2 934 516 |
|
1992 |
2 203 600 |
944 400 |
3 148 000 |
|
1993 |
2 259 600 |
968 400 |
3 228 000 |
|
1994 |
2 592 800 |
1 111 200 |
3 704 000 |
|
1995 |
2 549 400 |
1 092 600 |
3 642 000 |
Assessment of the impact of wood processing
A brief summary of the important socio-economic role of forest industry in Dolisie, the region and the country as a whole, allows us to appreciate the general impact of log processing in the country.
But, more than 50 percent of the 600 000 m3 of logs produced annually are still exported in the rough form. Their processing in the country would provide more employment and general income as demonstrated by the following example.
Employment
To each forest worker, 1.5 to 3.5 factory workers must be added, depending on the type of processing. In the case of SOCOBOIS, the factor is 3.6 in the factory (180 on the forest site, 650 in the factory).
|
Logging in the Congo: |
= 4 000 jobs |
|
100 percent processing in the Congo: |
= 10 000 jobs |
If all processing were to be done in the country, instead of the present 8 000 jobs, the Congo would immediately have 14 000 jobs without counting any jobs which are secondary to industrial activity, this means 6 000 more jobs.
Added-value contribution to the country
|
Year |
Percent |
Added-value US$ |
|
1991 |
54.1 |
9 736 000 |
|
1992 |
41.7 |
7 272 000 |
|
1993 |
49.5 |
7 916 000 |
|
1994 |
62.4 |
11 374 000 |
|
1995 |
62.8 |
11 400 000 |
Financial results by m3 of logs
These results depend on the level of processing, yield, wood quality and also staff quality, species and market.
The value-added by processing, per m3 logs equivalent, is higher than that earned by simply exporting the logs.
In the case of SOCOBOIS, we can demonstrate that 1 m3 of processed logs earns, on average, US$ 100 per m3 more.
|
Processing = greater added-value. Higher currency earnings |
Direct and indirect taxes, dues, customs duties, etc.
The tax department profits directly and indirectly from industrial activity. In the case of SOCOBOIS, only as regards industry, it takes over 20 percent of the turnover.
What would Dolisie's socio-economic situation be like without SOCOBOIS?
If, for reasons beyond SOCOBOIS' control, the factory had to close, what would happen in Dolisie?
The list below answers this question:
· About 1 000 more unemployed people;
· people in Dolisie without financial assistance;
· About US$ 10 million = CFA 6 000 000 per year less in the region;
· Felling of a greater number of trees for firewood around Dolisie;
· Trade, the hospital, pharmacies, artisans, etc., would see their turnover halved;
· Taxes on turnover would fall proportionately.
In short, the closure of the company would be a disaster for the region and for the whole national economy.
On the other hand, the example of SOCOBOIS should encourage other companies to abandon log export in favour of local processing.
It seems to me that these facts are convincing evidence of the positive and important socio-economic role of a forest industry.
Forest activities
Our principle is rational management and sustainable use of the forest, respecting the laws in force and the regulations for Forest Code implementation. The case study carried out by FAO two years ago on environmentally friendly logging practices provided us with some useful recommendations on how to improve our forest operations.
SOCOBOIS has signed a contract with the government to establish a Pilot Development, Reforestation and Agroforestry Programme. But sustainability in forestry can only be achieved if we have the full long-term rights on the forest area. This is why we have requested a lease on the land for 99 years or the length of the company's life. Without land rights there can never be sustainable development.
Certification and sustainable development
In principle, we are interested in a strict certification system as long as this does not imply costly formalities and bureaucracy and it improves our sales (prices) on the world market.
How can we certify the products when the logs which are purchased from other companies are not coming from certified forests?
Is certification a mode?
Is certification a must, and with what result?
Is certification a means of creating jobs for the "experts"?
Certification is chancy in that it will force forestry enterprises and forest administrations to accept the rules of sustainable development.
But let us not forget that it took Europe and the other continents a very long time to reach today's standard, a standard which is still being questioned by some experts.
On the basis of my experience in Africa, everything takes twice as long and, in practice, it will be a long, hard job to train and convince people in the field.
Therefore, the principles, criteria and indicators to be established and applied must take into account the people who work in the field. It is them who must be convinced to work better today so as to pave the way for the future of their grandchildren.
Recommendations
A world inventory of tropical forest resources with the assistance of the World Bank, using modern systems.
Coordination and monitoring of all activities at world level to achieve sustainable forest management.
Coordination of criteria, practicable in Africa, for the certification of forest products at world level.
Incentivation of industrialization and privatization which, in the long term, mean:
|
Employment - added-value - development |
On the occasion of the Conference on the Ecosystems of Central African Dense Rain Forests, I proposed that, while taking into account the regional differences, not only minimum diameters but also maximum diameters should be respected. We must protect trees of large diameter and list them as "national monuments".
Summary
Forest industry creates jobs through processing and this confirms its socio-economic role. Industrialization, above all in the rural areas of developing countries, is an indispensable support to the infrastructure and counters poverty and malnutrition.
Industrialists are making long-term plans and investments for 20 to 50 years. In many cases, an industrialist may be a better partner for a developing country than a good number of bilateral cooperation projects, which are very often short-term projects.
We are an industrial company and we must realise that we cannot perform miracles, nor reduce poverty in general.
Our work must be coordinated with the efforts of governments, international institutions such as the World Bank, international cooperation, GTZ, potential investors, university researchers, etc.
It would be desirable that there were many more contacts in the future between the above-mentioned institutions, because it is only through joint efforts that the developing countries can hope to see a substantial improvement in their socio-economic, employment and infrastructure situation.
