News -- Processing rubber wood for export

Rubber wood is classified as light hardwood. When freshly cut, it is whitish yellow and seasons to pale cream with a pinkish tinge. In its natural form, rubber wood is non-durable, hence, first class preservation and drying treatments are required immediately after cutting to avoid discoloration, bowing and twisting of the wood. Processing equipments includes an Impregnation plant, Cross Cutter and Edger. Usually from the stock of preserved and treated wood that designs and specifications are made to meet specific contracts. Capital cost and technology required for rubber wood processing are low, while the designs and specifications can be produced relatively easy.

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Rubber wood can be used to manufacture several furniture items such as: Benches, block boards, breadboards, building components, cabinets, dinning sets, doors, furniture parts, gift boxes, jewelry boxes, parquet flooring, rocking chairs, tables, tea trolleys, television cabinets, nets, wood rack etc.

According to estimates made by the Rubber Board of India, the stock of rubber wood all over the world is on the rise; and by 2020, an annual output of 52 million cubic meters of rubber wood would be made available. Out of this total, 14 million cubic meters will be industrially usable logs.

With the demand-supply gap in the Nigerian timber market widening, the need to promote rubber wood as a veritable substitute has become very imperative. At the moment, awareness about rubber wood is low amongst timber traders and users. Even among those who are aware, only few use rubber wood. In order to promote use of this eco-friendly timber and solve the prevailing crisis of timber shortage, government should establish a promotional agency with regulatory powers supplemented with R&D facilities to implement and monitor prescribed standards for primary and secondary processing and downstream manufacturing of rubber wood in Nigeria. There should be provision for institutional support in terms of market intelligence on domestic and external markets and incentives for manufacturing value added products. Overall, there should be a perspective plan to ensure a regulated growth of the rubber wood industry in the country. Countries like Malaysia are already in the vanguard of rubber wood exports. It exports about $650 million worth of rubber wood annually supplying the U.S., Europe and Japanese markets. Philippines and Thailand are also dominant in the export market. The export market takes first quality rubber wood almost exclusively; a cubit meter of wood goes for between $250 and $350 depending on the quality. The rubber wood market requires the following: consistent quality, acceptable prices, packaging to customers specifications, guaranteed delivery schedules, continuity of supplies and a readiness to accept customer - led design. To ensure continuity, some South - East Asian countries have adopted the principle of planting five trees for every single one cut down. This way they have been able to develop, not only the rubber wood industry, but also the entire rubber industry.

The reality right now is that the increasing cost of sourcing rubber wood has made companies in Asia and buyers in the U. S. and Europe to search for cheaper sources particularly among rubber producing countries, of which Nigeria is a significant producer. Presently, Nigeria has an estimated 240,000 hectares of planted rubber trees, out of which an estimated 150,000 hectares are over aged. Since approximately 180 cubic meters of wood volume could be obtained from a hectare of rubber plantation, as much as 27million cubic meters of wood volume could be obtained from the existing stock of rubber wood in the country. As much as 35 standard sawn rubber wood planks are contained in a cubic meter. Selling rubber wood plank for N600 (at this promotional stage; teak and mahogany goes for over a N1, 300 per plank), a gross retail sales value of N567 billion could be realized over time from local sales of this wood specie. Export sales value is estimated at $8.1 billion (assuming the entire stock was exported as planks; value could actually be higher if sold as manufactured products). States such as Ondo, Edo, Delta, Cross River, and Rivers, are predominantly rubber-growing states with large holdings of over aged trees. Prospective investors (including governments since some of the plantations are government owned) could set up saw milling and manufacturing plants in these areas and take advantage of the abundant raw materials available. The village dweller would earn better income from his or her over aged rubber tree if sold to these processors, instead of using it mainly as firewood for cooking.

According to market reports, the demand for rubber wood in the international markets is likely to outstrip supply in the foreseeable future, due to rising consumer preference for environmentally friendly wood products, of which rubber wood is one. More so, the rising preference for parquet flooring in the US and Europe, for which rubber has been found to be ideally suited, further promotes the commercial viability of this project.

It is not surprising that the three or four plants presently processing rubber wood for export in the country are not able to meet requests from their overseas buyers.

Rubber wood unlike most other hard woods has no export restrictions placed on it by the federal government. I therefore recommend this project to three categories of investors: First, rubber plantation owners who may want to utilized their over aged tree stock to earn foreign exchange Second, corporate organizations that may want to diversify into the rubber industry and have this project as a rubber wood - processing subsidiary. Lastly, NGOs and CBOs, involved in poverty reduction and job creation programs may set up a central rubber wood processing facility to process trees owned by community members and give rural dwellers opportunity to earn more income from their own resources.

We offer to assist interested investors to prepare a comprehensive feasibility and viability study for this project and to assist in raising needed funding. Owners of processing factories could be assisted in the preparation of business plan to secure additional funding for expansion of their sawmills and production facilities. Interested investors should contact the writer for more information on these.

Roland Oroh is a market analyst and SME development consultant.