Zambia’s forest resources amount to 46.3 million ha, of which 7.4 million are forest reserves, 6.3 million are national parks, 63,000 are plantations, while other woodland accounts for 32 million ha. Zambia Forestry and Forest Industries Corporation (ZAFFICO), a parastatal currently being privatised, owns and manages a plantation estate of 50,000ha comprising 40,000ha of pines and 10,000ha of eucalyptus, providing a healthy base for further development of a fully integrated wood and wood products industry.
The timber industry is basically divided into two: softwood including pine and eucalyptus, and indigenous natural forest species such as musamba and mukwa. The softwood is under ZAFFICO management while indigenous forest is controlled by the Forestry Department under the Ministry of Environment and Natural Resources.
Product range
The industry manufactures a wide range of products for export including particleboards, railway sleepers, soft and hardwood sawn timber, treated transmission poles, doors and frames, parquet tiles and edge glued panels. New products are garden tables, benches, timber frame houses and laminated kitchen tops.
In 1999 the industry recorded exports amounting to US$3.04m representing a decline of 4.6% compared to 1998, when export earnings for wood and wood based products was US$3.19m down from US$3.38m in 1997. The upward trend of exports from 1995-1997 was attributed to fresh capital investments undertaken by some companies, plus new entrants whose main focus was the export market, and establishing new markets in South Korea, Norway and Germany.
Established sawmillers have reduced exports of sawn timber in preference to exporting value-added wood based products such as doors and door frames, which give a better price per cubic metre than sawn timber. However, the recent decline of exports was attributed to financial difficulties that most producers have been experiencing. Another contributing factor was the devaluation of some regional currencies in major markets such as Zimbabwe, which made Zambian products generally less competitive.
Export markets
The Republic of South Africa has been the largest importer of Zambian wood products. Other main regional export markets are Zimbabwe, Botswana, Tanzania, Malawi and Namibia. Besides the regional markets, Zambian products have penetrated some European markets including Norway, the UK, and Germany, and also Korea, Taiwan, the US and Swaziland. In 1999, South Africa accounted for 30% of Zambian exports, Zimbabwe 14% and Botswana 11%. The US, a new market, accounted for 20% of the total Zambian wood and wood based exports.
Tax breaks
In the 2000 budget, the government granted preferential corporate tax rates and other fiscal incentives, including the duty draw back scheme to producers of non-traditional exports. Additionally, it reduced excise duty from 10% to 7% on electricity in order to reduce production costs.
Most timber companies have plans to expand capacity by direct investment in new kiln drying equipment, which will allow them to use kiln-dried timber in value-added wood products. These companies are also planning to acquire new manufacturing machinery for value-added products.
The standards and specifications used by the industry are those set by the Zambia Bureau of Standards. However, the Timber Export Policy gives options for manufacturers to either adopt the South African-based standards if the company is producing timber for that market or use the Central African standard, whichever is acceptable in the target market. Where there are no standards, as in the Congo (Zaire), then buyer and seller detail the tolerances and defects accepted or not accepted.
Export regulations
The government policy on export of wood and wood based products is covered by the Forest (Timber Export) Regulations 1997, which allows the export of the following: sawn timber, railway sleepers, which must be drilled on both sides, poles from planted species and finished timber products. However, exports of charcoal, non-finished timber from natural forest and peelers and sawn logs of any species are banned.
Main constraints have been defined as follows: non availability of affordable medium to long-term loans to purchase modern machinery for production of value-added products; low kiln drying capacity; lack of technical assistance in production of finished products; high import tariffs in South Africa and Botswana for finished wood products because of the South African Customs Union (SACU); and the high cost of local production attributed to high royalty fees for companies exploiting natural indigenous timber.
