Nkok SEZ, Gabon; Transition Towards a Wood Panel Hub from a Veneer Hub
Okoumé Veneer coming from Gabon has become quite popular in India in last few years. With so many veneer plants set up by Indians in Nkok SEZ, Gabon has attained the First position in Veneer Production in Africa and has become Number 1 Veneer Exporter of the world. The Ply Reporter present an interview with Mr. Amit Garg of Solid Wood Gabon, Everest
Ply Group and Mr. Naveen Goel of Sun Veneer who have established their face veneer manufacturing plants in Gabon SEZ at Nkok and have been operating it for last three years. They have come together to start a new company (Star Ply Gabon) for plywood manufacturing and construction work for this new venture has already begun and going on at swing in Nkok SEZ.
The Ply Reporter hopes that this conversation with Mr. Amit Garg (AG) and Mr. Naveen Goel (NG) will help our readers to understand the business environment and the opportunities in timber sector in Gabon.
Q. We congratulate you both for establishing face veneer plants in SEZ at Nkok, Gabon. Can you please share more about your respective ventures in Nkok SEZ?
A. NG: We thank Ply Reporter for giving us an opportunity to share our experience with its readers. We, both, have been producing Okoumé veneer for last couple of years here in Gabon and have been regularly supplying to India which has been our main market. We have received appreciation from our buyers for our quality and consistency. We would continue to provide our buyers with the best products from our end
Q. How would you comment about the overall business ecosystem in Gabon? What is your opinion on “Gabon” as a destination for large scale investments?
A. NG: Africa is a challenging geography but as it is said bigger the challenge, better is the award. Unlike most of the African nations, the business ecosystem in Gabon gave us very positive vibes and the environment inside the Nkok SEZ is even more conducive. Gabon's pro industrial policies and the government's efforts, in attracting investors and supporting them to settle down, is really encouraging. Gabon already has large scale projects and a lot of development projects are being taken up through private finance initiatives. Of course, all this has motivated us to go ahead and start a green field plywood manufacturing project.
Q. Establishing a manufacturing facility in a foreign country must have been challenging? Can you share your experience of putting up a factory in Gabon SEZ?
A. NG: Generally, setting up a new factory even in our own territory is an uphill task and it is more so when it comes to setting a manufacturing facility on the foreign soil. However, establishing a unit in Nkok SEZ was much easier than we initially anticipated. Gabon has investor friendly policies and GSEZ rolls over the red carpet to all investors as Gabon's investment ambassador. We got all the necessary handholding in establishing our business here. With this proactive approach to support the investors, GSEZ is truly guiding the industrial development of this country.
Q. As you said that you are exporting good volume of face veneer from your units to India. Will you be also exporting plywood manufactured in your new unit to India?
A. AG: Yes, we are exporting around 70 % of our face veneer production to our customers in India. However, when it comes to Plywood, India, itself is a very big manufacturer of Plywood, leaving very narrow space for imported plywood. However, we remain open to idea of exporting plywood to India for premium panel segment.
Q. Can you tell us more about the exports of plywood from Gabon and the export volumes ? Why you are targeting USA and European market to export your plywood products and how do you plan to compete with the traditional origins of plywood for these markets ?
A. AG: To our estimate, around 100, 000 to 120, 000 cbm of plywood is being exported by plywood manufacturers in Gabon which includes Rougier, Cora Wood, SEEF, PDG, SYIBG etc. USA & Europe are among the big consumer of plywood and they have been importing from China and other South East Asian countries on regular basis. Given the current political equation, changes in environmental policies in origin countries and constrained availability of raw material in South East Asian countries, we feel that Gabon has the potential to supply a Quality plywood product to American and European markets with marked advantage of legal sourced timber.
Q. Which all markets you would be targeting to sell the plywood from your new plywood unit in Nkok SEZ?
A. AG: We are planning to make specialized products like fully calibrated plywood, thin panels for decorative plywood (base ply), flexible ply etc. for markets in developed economies. We will be targeting European and American Market for export of all product range which will include Interior, exterior and marine grade plywood.
Q. Will you be using Okoumé only for plywood manufacturing? Or do you plan to use any other timber species for plywood production?
A. AG: We are planning to use 100 % Okoumé Core Veneer and Face Veneer for our plywood production. We would be using full panel and long core for our production. Our plywood will be without any core gap, fully calibrated made with legallysourced timber. Star Ply is aiming to meet the highest industry standards in terms of quality and timber legality to make a world class product.
Q. Sustainable Forest Management has been a key word during all our interactions with industrial units in Gabon. Are you also using Okoumé timber that comes SFM compliant forest concessions ? Will you be using the same Okoumé timber for plywood manufacturing ?
A. AG: Yes, all the Okoumé timber and all the hardwood species that is being used by wood processing industries in Gabon comes from forest concession under sustainable forest management as the new forest law of 2001 emphasizes Sustainable Forest Management (SFM) as the overall approach in the forestry. All the loggers follow the sustainable forest management plan which will ensure that the forest cover in Gabon is maintained and we can continue to harvest from mother nature for years to come. Gabon has become a hub for veneer manufacturing and we shall be using the core veneer generated in the process from various factories for production of plywood. In addition, GSEZ has assured to provide sufficient volume of plantation logs for our plywood unit from their existing PFM Plantation. We have also been informed that Government of Gabon is also planning for large scale planation to ensure that we can continue to be a major plywood supplier for years to come.
Q. Can you please give our readers a comparison of 100% Okoumé Plywood with ply made from acacia, eucalyptus or poplar in terms of quality and price?
A. AG: It has been worldwide recognized and accepted that Okoumé is one of the best timber for production of marine grade plywood. Okoumé plywood has been in the European market since decades for various specialized uses. Compared to plantation species like acacia, eucalyptus or popular, the dimensional stability and bonding strength of Okoumé is much higher. Obliviously, the price of plywood made with timber from natural forest will be higher than plantation species; just like they say old wine will be expensive as compared to new wine.
Gabon Special Economic Zone (GSEZ) SA is a successful Public Private Partnership project between Olam International Ltd (Singapore), Africa Finance Corporation and Gabonese Republic, Africa. Gabon is fast emerging as the West Central Africa's manufacturing hub and they welcome entrepreneurs from across the globe to benefit from the business opportunities unlocked by SEZ at Nkok. The SEZ has around 155 customers in their SEZ at Nkok from 17 countries which includes over 50 industrial entrepreneurs from India / Indian origin.
Q. We understand that there is no formaldehyde / resin manufacturing plant in Gabon. What would be the source of formaldehyde / resin for your plywood manufacturing unit given it’s another important ingredient in plywood manufacturing after timber itself?
A. AG: In addition to sustainable supply of timber, resin is an important raw material for plywood production and we feel extremely lucky that Indian resin manufacturer M / s Windson from Gujarat has already decided to put up their formaldehyde and resin plant in Nkok SEZ. This resin manufacturing plant will be in operation by the end of 2019, so once the same is in operation, we shall be sourcing the same from them.
Q. What all certification you are planning to take for your upcoming Plywood unit given the sensitive target markets like USA and Europe?
A. NG: Yes, we are already in discussions with agencies to help us in obtaining FSC and other mandatory certification as these certifications are very essential for sales of timber product to American and European markets. You must be aware that the President of Gabon has announced in the year 2018 that all the forest concessions in Gabon will have to be 100 % FSC certified by 2022. With such government decision, we are confident that Gabon is going to be a major supplier of certified legal wood products.
Q. Can you please share the potential business opportunities that are available to them as many may be keen to explore Gabon and planning to enter or expand their wood processing business?
A. NG: Until 2010, Gabon was a source of round logs and around 1.5 million cubic meters of round logs were being exported from here. However, with ban of export of round logs in 2010 and establishing of Nkok SEZ, present an attractive proposition for us to set up veneer plants. Now that many plywood units and one particle board plant is being set up, we see a good opportunity for furniture manufacturers to set up large scale panel based modular furniture manufacturing units. We would suggest your readers to visit Gabon to further explore the wood processing business opportunities during the Gabon Wood Show scheduled for 24th to 26th June 2019.