India and Gabon have enjoyed warm and friendly relations dating back to pre-independence era of Gabon. Gabon maintains an Embassy in New Delhi. The Embassy of India in Kinshasa, Democratic The Republic of Congo is jointly accredited to Gabon. India also maintains an Honorary Consulate in Libreville. President of Gabon, Mr. Ali Bongo Ondimba visited India again in October 2015 to attend the 3rd India-Africa Forum Summit in New Delhi. The Minister of State for Human Resource Development and Special Envoy of the Prime Minister Ram Shankar Katheria visited Libreville in September 2015 and met with President Ondimba.
In June 2017, Gabonese Foreign Minister Pacome Moubelet-Boubeya visited India and met External Affairs Minister Sushma Swaraj to improve bilateral relations, both economic and political cooperation. Addressing an interactive session with members of PHD Chamber of Commerce and Industry with a high-level business delegation from Gabon, the Minister emphasised that the Government of Gabon is creating Special Economic Zones to attract investors in which Gabon would be incentivising the prospective investors with free exit policies. “It’s a small country in which ease of doing business is of significant space, the economy of which has been growing at an average rate of 5.5% and offers huge opportunities for investors to conduct their businesses and become part of Africa and its bounties,” said Mr. Boubeya. The Minister also said that they want India to look at Gabon as a place to invest, make money and create jobs.
India could also potentially be part of Gabon’s next commodity rush as the country has one of the world’s largest timber resources with tropical forest cover of 22.8 million hectares offering 400 million cbm reserves of exploitable timber of more than 400 identified species.
GABON: INDIA’S TIMBER PARTNER
♦ Logging potential of 12.5 million hectares with more than 400 species
♦ Reserves of exploitable timber includes 130 million cbm of Okoumé and 270 million cbm of the other hardwood species
♦ SFM compliant wood with proper traceability and legality certificates for furniture manufacturers is available in abundance
♦ Ready Industrial infrastructure in form of well-developed Gabon SEZ with more than 70 industries in production/construction
♦ Ease of doing business - 17 agencies from which, regulatory/statutory clearances are required for setting up an industry are housed in a special building “Single Window Clearance” within the SEZ.
♦ Array of Fiscal Incentives - No income tax for first 10 years & a preferential rate of 10% over the next 5 years and Full exemption from customs duty, VAT, property tax, capital gains tax etc.
INDIA TIMBER BUSINESS-CONSTRAINED BY RAW MATERIAL SUPPLY
India’s annual imports of wood and wood products have increased from USD 500 million to USD 2.7 billion over the past decade. Restrictions on domestic harvesting from forests coupled with limited forest resources have limited supply while expanding consumer and commercial interest in wood interior products and wooden furniture have increased demand. India is also becoming a furniture exporter, turning imported wood into finished products for export. Low tariffs and liberal import policies have made logs the dominant import category for years, as India sought to maximize value addition while minimizing pressure on its forests. More than two-thirds of log imports come from Malaysia, Myanmar (formerly Burma), and New Zealand due to a freight advantage and relatively lower prices. Major log imports from these countries include hardwood species of teak and Meranti and softwood species of pine. Other major suppliers of logs to India are Cote D’Ivoire, Papua New Guinea, Ecuador, Costa Rica, Panama, and Cameroon.
Logs’ share of imports has dropped from 90 percent to 60 percent over the past decade since origin countries have embraced the idea of processing of natural resources within their countries itself so as to generate employment and give the boost to their economy.
Wood processing units in India are dependent on imports for raw material from forest-rich countries, mainly, Myanmar, Laos, Indonesia, Solomon Islands, Papua New Guinea and West Central African countries. Given some regulatory changes in the forestry sector in mid and end 2016 by Government of Myanmar and Government of Laos, the supply of raw material (round logs) to Wood processing units in India is severely impacted. Further, two of the four West Central African countries supplying raw material to Asia have also banned the export of round logs and the other two are also expected to announce a ban in next two to three years. As a result, the supply of round logs and the intermediate products (mainly, face veneer) to India from these countries is constrained and Indian investors are looking for opportunities to set up manufacturing units outside India.
In the given business dynamics & raw supply material scenario, Gabon with vast forest resources, sustainable supply of Okoumé [for Veneer], availability of SFM Compliant/FSC Certified Hardwood [for furniture] and ready infrastructure [Gabon SEZ] presents an unparalleled opportunity for Indian entrepreneurs.
GABON FOREST- SUSTAINABLE TIMBER SOURCE FOR INDIA
Boasting the second highest forestry potential in Africa, Gabon’s forests cover 22.8 million hectares, i.e. 88% of the country’s land surface. The tropical forest offers enormous possibilities with more than 400 species including Okoumé, Okan, Padouk, Tali, Kevazingo, Ozigo, Ilomba, Azobé, Dibetou (Tigerwood or African Walnut), Movingui (Nigerian Satinwood), Ebony and Zingana (Zebrano or Zebrawood). Until 2010 i.e. before ban on export of raw logs, Gabon was the largest exporter of raw wood in the region, and its sales represent 20% of Africa’s raw wood exports.
GABON SEZ - OUR OBJECTIVE: YOUR SUCCESS.
The Gabonese Republic is aiming to turn Gabon into a world leader in certified tropical timber production through an industrial strategy aimed at sustainably managing timber stocks and by promoting secondary and tertiary processing. In this pursuit, the Gabonese Republic in partnership with Olam International Limited, Singapore developed a Special Economic Zone, spread over 1126 ha at Nkok (20 Km from the capital city of Libreville).
As on date, SEZ at Nkok currently has 120 customers and foreign direct investment expected is more than USD$ 1.7 billion. The investors who have invested so far are from 17 nationalities; out of which, 42 are from India or from Indian origin. The industries making SEZ as base are mainly industries into wood transformation (saw mill, veneer, and plywood), ferro-alloys, construction materials, pharmaceutical, food processing, metal recycling etc. 41 industrial units are already in production and 29 more units are under construction. It is expected that more than 60 companies will be under commercial production by end of 2017.
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