Unlike many other geographies timber processing industries in Gabon and more so at Nkok SEZ, performed well in the year 2020. Although marred by the pandemic of COVID-19, the timber processing at Nkok SEZ saw a growth of 5% in terms of total timber volume processed from 671,000 CBM in 2019 to 704,000 CBM in 2020. The total timber products export from Nkok SEZ itself in 2020 was around 417,000 CBM which included veneer, sawn timber, plywood, and furniture. This represents around 45% of total timber products’ exports from Gabon.
Okoumé Veneer Exports
The growth of veneer production and export in Nkok SEZ has been more 15% per annum on an annualized basis since 2017. Around 253,000 CBM of veneer was exported by 35 units in production at Nkok SEZ to over 35 countries around the world. Following the trends of the last couple of years, India still remains the top export destination for veneer produced in Nkok SEZ with a share of 45% of total production. However, there was a decrease (~34%) in export volume to India from 173,000 cbm in 2019 to 114,000 cbm in 2020. While the veneer export to Europe and China witnessed a growth of 63% and 32% respectively in 2020 over 2019. The total veneer export to Europe in 2020 is estimated to be around 37,500 cbm whereas the veneer exports to China grew to 65,200 cbm in 2020 compared to 49,200 cbm in 2019. The total veneer exports to Japan, South Korea and Taiwan in 2020 were around 10,000 cbm from a miniscule volume of around 2,600 cbm in 2019. The shift of focus of veneer manufacturers from Indian markets to European and other markets can be mainly attributed to higher pricing regime of Okoumé veneer compared to Indian markets. Many of the veneer manufacturers in Nkok SEZ have upgraded and augmented their production facilities for supplying to European and other highvalue markets.
Okoumé and Hardwood Sawn Timber Exports
The export of sawn timber exports from Nkok SEZ grew at more 40% per annum on an annualized basis since 2017. In year 2020, around 148,000 cbm of sawn timber was exported by 13 units in production at Nkok SEZ to over 30 countries around the world. China took the spot of the top export destination for sawn timber produced in Nkok SEZ with a share of 54% of total production. The hardwood sawn timber exports to Europe in 2020 were estimated to be around 11,500 cbm with a growth of 129% over 2019. Sawmill operators in Nkok SEZ are planning to upgrade their facilities for value addition in their current production to be able to convert their sawn timber into consumer products like flooring, decking, door and door frames etc.
Challenges and Road Ahead
Log supply from forests to Nkok SEZ witnessed intermittent interruptions due to several derailments of log trains. The train operator in Gabon, SETRAG, has taken cognizance of this issue and currently working on the strengthening of railway tracks. Despite these operational issues, the throughput of trains in terms of bringing logs to Nkok SEZ from a various location across Gabon has increased from a mere 50,000 CBM in 2017 to around 300,000 cbm in 2020. The operational efficiency of trains will enhance after the completion of strengthening of railway tracks and throughput of trains in bringing logs to Nkok SEZ is budgeted to be over 440,000 cbm in 2022.
GSEZ is augmenting its log truck fleet and the log supply to Nkok SEZ by way of roads is budgeted to be around 500,000 cbm in 2021. GSEZ will be adding sixty (60) more log trucks to their existing fleet of 100 log trucks, between June and July 2021.
Log harvesting from five (5) new forest concessions is being started in the year 2021. The total area under these forest concessions is around 800,000 ha and the additional log supply to Nkok SEZ from these forest concessions is estimated to 17,000 cbm per month. Total log supply to Nkok SEZ is likely to reach 80,000 cbm per month in the third quarter of 2021 as compared to the current average supply of 60,000 cbm per month.
The Good News
Century Ply started the production at its veneer manufacturing unit in Nkok SEZ in January 2021 along with two other veneer units. Within just two months of start of production, Century is planning to augment their facility to be able to supply to high value markets other than India.
The production and exports of Plywood from Nkok SEZ witnessed a substantial increase in volumes. The total plywood exports from two units in Nkok SEZ doubled compared to export volumes in 2019. Star Ply, promoted by Indian investors performed very well in 2020 and exported around 10,000 CBM of plywood, mainly to Europe and USA markets. They are currently expanding their production capacity and likely to reach an annual production capacity of around 50,000 cbm. Five (5) more plywood units are in the construction phase and likely to be in production during this year. The total plywood exports from Nkok is estimated to reach 100,000 cbm in 2022 from around 13,000 cbm in 2020.
The Particle Board plant at Nkok SEZ is in an advanced stage of construction and this plant is slated to be in production in the third quarter of 2021. This plant will provide the required impetus for panel-based furniture manufacturing.
The honorable President of Gabon had announced in 2018 that all the forest concessions in Gabon must be 100% FSC certified by 2022. In the same pursuit, most of the forest concessionaire in Gabon are working on getting their FSC certifications. More than 2,000,000 ha of forest concessions in Gabon are already FSC certified and it is expected that another 2,000,000 ha of forest concessions will get their FSC certifications by end of 2021. This will enable abundant availability of FSC certified raw material (logs) for processing and exports of timber products to high-value markets of Europe, USA etc.