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Paper 29a7:
PROBLEMS AND SOLUTIONS TO LOW PROFITABILITY OF FOREST INDSTRIAL ENTERPRISIS

Facilitated by the SciX project

Owor Ologe Daniel

PROBLEMS AND SOLUTIONS TO LOW PROFITABILITY OF FOREST INDSTRIAL ENTERPRISIS

Abstract:QN. DISCUSS THE REASONS AND POSSIBLE SOLUIONS FOR LOW PROFITABILITY OF FOREST INDUSTRIES IN DEVELOPING COUNTRIES. Introduction Forest industries are those that use forest products as raw material for processing, modeling and manufacture of other products. The final product normally has a high quality, as result of value addition. The common industries under these categories are classified as primary and secondary wood industries. Examples of primary wood industries are woodlots and sawmills. However, secondary wood industries are carpentry and joinery workshop producing furniture products and board, Nile ply in Jinja making pulp and paper including ply and boards. Based on location area we have rural-bases and urban industries. Based on mode of ownership we have government and privately owned and managed. Reasons for low profitability of forest industries in developing countries Low profitability implies less reward(s) shall be received from the forest industries in terms of value of products, quality and monetary terms. The emphasis here is case study of the Uganda forest industries. The reasons for low profitability are as follow: There is general lack of proper planning and evaluation while locating the industry’s processing sawmill plant which are dependable on oriented supply of raw materials, logs. The furtherest distance mean high costs of transport. The consequent market failure due to lack of market information, inappropriate royalty rates, trade restrictions, hidden subsides distorting the market for forest products. The development of urbanization and industrial growth in the area leads to degazzetting and subsequent reduction of the forest estate. An example, being Namanuve forest near the capital city- Kampala. Where there is increased population growth and migration will definitely cause demand for Agricultural produce and settlement. The concerned persons clear off the forest to grow agricultural crops with high rate of demand for firewood energy. Poverty being high in rural area will cause sudden encroachment into the forest illegally harvesting products unsustainably. This will be accompanied by unacceptable practice of clearing land for agriculture and charcoal burning living nothing for future utilization. There is low or lack of capital. The entrepreneur intending to invest in such enterprise lack initial working and fixed finance to start the business. The little they have cannot widen their size of business but is mean’t for living or survival. Low profitability of forest industries may be a result of economy of scale that defines the level under which the industry operates. Most industries in Uganda operate at rural, regional and at less extend national level. The tastes and preferences are distinct from individual to individual. Individuals prefer imported forest products to our own products produced locally, so the latter will experience low profitability. Policy deficiency relating to private sector and local communities over land tenure, access rights and responsibilities for resource management. The government restriction over the transaction in forest products by imposing high taxes and reduction of support in form of subsides to producers or consumers are the source of low profitability in forest sectors. The up coming forest industries have less knowledge, accessibility in acquiring credits from lending bodies like Banks, insurance companies, individuals in form of loans, donations and grants. Even if these industries had security, they fear the high interest rate charged per the amount acquired and payment period is short. The size of the enterprise is small that the family members operate it effectively. However, profitability remains low. There is low level of technology in which uses simply tools, equipment and machines. The employees are non- innovative to modify or improve upon the technology available. Our technology in Uganda majority use pit sawing in abundance, less on Mobile power saw which are even more wasteful. This account for low recovery or low profitably. The loggers are still rigid to the use of running –meter system that takes 14 feet or 4.2m length of log measured for pit sawing and living other portions unconverted into timber. Such method of conversion is deemed wasteful leading to low recovery percentage per tree. Unclear and poor physical infrastructure affect the supply, distribution of goods and services, accessibility of forest products and thus encourages the use of cheap means which are expensive in terms of increases transport costs. The poor management skills are weakening the way things or works are done in the industry. Managing peasant worker is more expensive because most of them are ignorant and dislike close supervision. However, manager may be insufficient of relevant knowledge of handling humans and control. This will directly have implication on productivity output per person per day per task. Some tree species are regarded as endangered species for example, Mahogany prevents others species from growing retarding rates of regeneration. At the forest where the canopy are closed, regeneration of trees are not possible or seedling/ sapling are experiencing high competition among the fast growth trees with low supply of nutrients for the undergrowth. These affect the bole, ageing and maturity period of the tree to reach its harvesting and so low profitability from undergrowth at that instant. Low profitability can emerge from competition between new industries producing similar products and those products that require value addition including substitutes. For example, when two carpentry workshops are located close to each other and producing similar furniture identical in all aspects. As one firm lowers its price so that more consumers get attracted. The one charging high price is aiming at profit maximization while the former are receiving low amount but at high sale per day per product. In market when the price of substitutes for timber; steel and Aluminum is low, people tend to purchase more of it reducing the demand for timber. Thus, timber is experiencing low profitability at that time. Employing unskilled and semi-skilled labour force is center of low profitability as low output are realized. Absence of labour in a forest industry will call for poor performance with hired work force, which is uneconomical. Shortage of raw material of the forest types, for example, timber is the back born of the low profitability and less utilization say in construction industries. The use of uneconomic air seasoning techniques of drying wood are time wasting and not preferred by large enterprises. This can be done at individual basis and the consequently low profitability. Drastic weather changes are a result of natural calamities in forestry. Very strong wind can break, split the branches or fell a whole tree before maturity and the hamper with the initial objectives of the enterprise. Others are most likely to be attacked by termites, fungi that are major process of woods deterioration and so low profitability. There is poor linkages or co-ordination between firms to the international markets. Abstractions of market linkages are general weakness that accounts for low profitability in forest industries. Low profitability arises due to entrepreneurs or industries failing to manage her finances well. They can’t account for the expenditure and donor moneys or lack knowledge on how to save income generated from sales of produce. The low profitability in the last half- of – decays has due to the government failing to privatize the gazetted forest (Natural forest reserve and woodlots) to Non- governmental organization or other institution to bring in reforms. If the retention of the forest Department (FD) up-to- dates would result into low profitability with unidirectional management. When the land is extending to extinction in the forest definitely will produce low profitable products due to severe degradation or depletion. These will be a sign of low biodiversity and thinner (small and short) diameter tree- height tending to shrubs and desert or semi- desert. The wildlife’s will definitely migrate to new location. Another source of low profitability in forest industry is over stressing or emphasizing about biodiversity conservation and management of forest resources sustainably. For example, restricting people to collect firewood in one plot and leave the other may be monotonous to them. They may think there is good product that would fetch money that the concerned body does not want them to get. The consequent is conflicts At times forest being good place for hideout and protection, the law -breakers (rebels) may prevent access to exploitation at that time and so low profitability. Entrepreneurs who work alone at family level have no access to large sum of supports from the government, donors and in terms of security their job is insecure. The measure is that they are not reliable to pensions, NSSF’s, termination benefits and allowance package. The pressing forces are nepotism and high level of corruption among the employees and consumers of the final products. This makes them satisfy themselves while the government is receiving less out of the natural forest. There is power and water supply shortage. The bark of tree-logs is best removed by soaking under water to easy the process in preparation for further processing. Illegal poaching of wildlife and pit swaying is accounting for losses in the forest. Meanwhile power is necessary for lightening and running of machines. The absence of these in the industry will low productive and encourage use of simple tools. Some of the industries that fail to realize the need for health through poor waste and disposal management such as pollutions from industries may be closed if found inherent to quality control measures. Conclusively, in all aspects the available of the raw materials are the determinants of the level of profitable in the forest industry including rates of corruption. The solutions to low profitability in forest industries in Uganda The following could be the way forward for increased forest industries’ profitability in Uganda: Demarcate the forest into plots, that is, compartments and boundary to ensure sustainable management and harvesting. This will prevent encroachers into restricted plots “the Budongo Nature Reserve.” For those forests reserve that where surveyed early and has No clear demarcation can be identified by assessing the Natural forests on public and private land for re-establishment by technical management team. Strengthen the private sectors and other institutions by funding to achieve expansion capacity. Integrate the forestry practices and environmental concern into school, university curricula. Sensitize the public about the forest value. Forest is habitats of biodiversity species, wildlife, control of soil erosion and must be harvested, protected sustain ably. Organize to train, educate and employ trainers of trainees into the forest sector. To avoid high rate of corruption decentralize the forest to be managed by the local people, asset up auditing team and motivate the workers sustain ably. Train and employ forest guides and deploy them to monitor if there is any illegal activities in the forest like bush clearing, pitsawying and agricultural practices. The calprities is liable to intervene in courts’ of law or must be charged according to the set up laws. Try to minimize damage of stands of young trees, sapling in the natural forest during felling. Gazette the forest into plots for conservation and management of wildlife, research, seed supply, production and nature reserve. Where there are suspicions of bush burning try to clear strips to protect and break off fire breakage in the forest. Infact forest guides should monitor this illegality. To restore tree species of biodiversity there is need to practice domestication. This will overcome seasonality and improve upon abundances of tree species for future harvesting. The extension workers and other workers must be paid a sustainable package to prevent corruption and motivate their work so as to achieve maximum output. Entrepreneurs or organization/ firms must learn to save by opening bank accounts and minimize the expenditure as they receive thigh interest rate. The latter will be achieved by identifying such Banks that offer high interest rate. People should come together and form cooperatives or trade unions that will excel them to acquire large sum of finances. Micro-finance institutions, marketing boards must be set up. The latter issues loans to entrepreneurs while marketing boards identify Marketing Avenue for the farmers’ products. All entrepreneurs should identify opportunity cost that in seasons of threats in forest or forest produces, they can move to it. Use storage facilities like refrigeration to store perishable products for use later. Financing bodies should lower the interest rate to attract more FBSSE’S. There is need to increase on enrichment planting. Products must be of high quality by incorporating two coats of vanish or paints as finishes, curving as a way of value addition is necessary. The government should reduce the high taxes and promote enterprises with subsides to support them. Encourage intensive research of suitable farm forestry techniques, tree species, biodiversity and the impacting factors. Over come competition in market by branding the product and identify international markets. Wastage of resources can be restricted in a plant through closed supervision of works and guidance using better management skills. All dependent industries should be set near the source of raw materials. For example, sawmills are situated near the forest logging site or woodlots. The Banks, insurance company should intervene on ways of identifying markets, reducing loans interest rate and link them to international donors in collaboration with Ministry of Finance and Economic Planning. Use Mobile band sawmills or circular sawmills to replace pit swaying and automobile chain saws. Adapt silvicultural approaches of allowing coppices to develop for the next harvesting. Also, when harvesting trees that form coppices let it be done during drying season so that at the beginning of rainy seasons the buds sprout out. Increase trading and processing in order to increase upon income since high quality products are sold at market through branding produce. The industry must be a source of employment opportunity for the local populations through improved forest management. The government should solicit for donor funds and help to promote rural electrification and extension of water souse up to the rural population. And such industry like sawmills should be the first priority target. Encourage sustainable harvesting and tree planting as a measure to cover up the lost species. The government should utilize the Poverty alleviation Action Funds (PAF) from donation and grants to develop, open and rehabilitate new roads so that produce can be accessed easily. Where roads exist already but the physical statutes are bad, there is need to improve on it. Generally, profitability can only be achieved through dialogue and mutual understanding with the communities, if their satisfaction and organization goals are achieved. Therefore, we can say that overall solution is driving at Poverty Eradication, which is part of the Millennium Development Goals (MDGs) QN. DISCUSS THE REASONS AND POSSIBLE SOLUIONS FOR LOW PROFITABILITY OF FOREST INDUSTRIES IN DEVELOPING COUNTRIES. Introduction Forest industries are those that use forest products as raw material for processing, modeling and manufacture of other products. The final product normally has a high quality, as result of value addition. The common industries under these categories are classified as primary and secondary wood industries. Examples of primary wood industries are woodlots and sawmills. However, secondary wood industries are carpentry and joinery workshop producing furniture products and board, Nile ply in Jinja making pulp and paper including ply and boards. Based on location area we have rural-bases and urban industries. Based on mode of ownership we have government and privately owned and managed. Reasons for low profitability of forest industries in developing countries Low profitability implies less reward(s) shall be received from the forest industries in terms of value of products, quality and monetary terms. The emphasis here is case study of the Uganda forest industries. The reasons for low profitability are as follow: There is general lack of proper planning and evaluation while locating the industry’s processing sawmill plant which are dependable on oriented supply of raw materials, logs. The furtherest distance mean high costs of transport. The consequent market failure due to lack of market information, inappropriate royalty rates, trade restrictions, hidden subsides distorting the market for forest products. The development of urbanization and industrial growth in the area leads to degazzetting and subsequent reduction of the forest estate. An example, being Namanuve forest near the capital city- Kampala. Where there is increased population growth and migration will definitely cause demand for Agricultural produce and settlement. The concerned persons clear off the forest to grow agricultural crops with high rate of demand for firewood energy. Poverty being high in rural area will cause sudden encroachment into the forest illegally harvesting products unsustainably. This will be accompanied by unacceptable practice of clearing land for agriculture and charcoal burning living nothing for future utilization. There is low or lack of capital. The entrepreneur intending to invest in such enterprise lack initial working and fixed finance to start the business. The little they have cannot widen their size of business but is mean’t for living or survival. Low profitability of forest industries may be a result of economy of scale that defines the level under which the industry operates. Most industries in Uganda operate at rural, regional and at less extend national level. The tastes and preferences are distinct from individual to individual. Individuals prefer imported forest products to our own products produced locally, so the latter will experience low profitability. Policy deficiency relating to private sector and local communities over land tenure, access rights and responsibilities for resource management. The government restriction over the transaction in forest products by imposing high taxes and reduction of support in form of subsides to producers or consumers are the source of low profitability in forest sectors. The up coming forest industries have less knowledge, accessibility in acquiring credits from lending bodies like Banks, insurance companies, individuals in form of loans, donations and grants. Even if these industries had security, they fear the high interest rate charged per the amount acquired and payment period is short. The size of the enterprise is small that the family members operate it effectively. However, profitability remains low. There is low level of technology in which uses simply tools, equipment and machines. The employees are non- innovative to modify or improve upon the technology available. Our technology in Uganda majority use pit sawing in abundance, less on Mobile power saw which are even more wasteful. This account for low recovery or low profitably. The loggers are still rigid to the use of running –meter system that takes 14 feet or 4.2m length of log measured for pit sawing and living other portions unconverted into timber. Such method of conversion is deemed wasteful leading to low recovery percentage per tree. Unclear and poor physical infrastructure affect the supply, distribution of goods and services, accessibility of forest products and thus encourages the use of cheap means which are expensive in terms of increases transport costs. The poor management skills are weakening the way things or works are done in the industry. Managing peasant worker is more expensive because most of them are ignorant and dislike close supervision. However, manager may be insufficient of relevant knowledge of handling humans and control. This will directly have implication on productivity output per person per day per task. Some tree species are regarded as endangered species for example, Mahogany prevents others species from growing retarding rates of regeneration. At the forest where the canopy are closed, regeneration of trees are not possible or seedling/ sapling are experiencing high competition among the fast growth trees with low supply of nutrients for the undergrowth. These affect the bole, ageing and maturity period of the tree to reach its harvesting and so low profitability from undergrowth at that instant. Low profitability can emerge from competition between new industries producing similar products and those products that require value addition including substitutes. For example, when two carpentry workshops are located close to each other and producing similar furniture identical in all aspects. As one firm lowers its price so that more consumers get attracted. The one charging high price is aiming at profit maximization while the former are receiving low amount but at high sale per day per product. In market when the price of substitutes for timber; steel and Aluminum is low, people tend to purchase more of it reducing the demand for timber. Thus, timber is experiencing low profitability at that time. Employing unskilled and semi-skilled labour force is center of low profitability as low output are realized. Absence of labour in a forest industry will call for poor performance with hired work force, which is uneconomical. Shortage of raw material of the forest types, for example, timber is the back born of the low profitability and less utilization say in construction industries. The use of uneconomic air seasoning techniques of drying wood are time wasting and not preferred by large enterprises. This can be done at individual basis and the consequently low profitability. Drastic weather changes are a result of natural calamities in forestry. Very strong wind can break, split the branches or fell a whole tree before maturity and the hamper with the initial objectives of the enterprise. Others are most likely to be attacked by termites, fungi that are major process of woods deterioration and so low profitability. There is poor linkages or co-ordination between firms to the international markets. Abstractions of market linkages are general weakness that accounts for low profitability in forest industries. Low profitability arises due to entrepreneurs or industries failing to manage her finances well. They can’t account for the expenditure and donor moneys or lack knowledge on how to save income generated from sales of produce. The low profitability in the last half- of – decays has due to the government failing to privatize the gazetted forest (Natural forest reserve and woodlots) to Non- governmental organization or other institution to bring in reforms. If the retention of the forest Department (FD) up-to- dates would result into low profitability with unidirectional management. When the land is extending to extinction in the forest definitely will produce low profitable products due to severe degradation or depletion. These will be a sign of low biodiversity and thinner (small and short) diameter tree- height tending to shrubs and desert or semi- desert. The wildlife’s will definitely migrate to new location. Another source of low profitability in forest industry is over stressing or emphasizing about biodiversity conservation and management of forest resources sustainably. For example, restricting people to collect firewood in one plot and leave the other may be monotonous to them. They may think there is good product that would fetch money that the concerned body does not want them to get. The consequent is conflicts At times forest being good place for hideout and protection, the law -breakers (rebels) may prevent access to exploitation at that time and so low profitability. Entrepreneurs who work alone at family level have no access to large sum of supports from the government, donors and in terms of security their job is insecure. The measure is that they are not reliable to pensions, NSSF’s, termination benefits and allowance package. The pressing forces are nepotism and high level of corruption among the employees and consumers of the final products. This makes them satisfy themselves while the government is receiving less out of the natural forest. There is power and water supply shortage. The bark of tree-logs is best removed by soaking under water to easy the process in preparation for further processing. Illegal poaching of wildlife and pit swaying is accounting for losses in the forest. Meanwhile power is necessary for lightening and running of machines. The absence of these in the industry will low productive and encourage use of simple tools. Some of the industries that fail to realize the need for health through poor waste and disposal management such as pollutions from industries may be closed if found inherent to quality control measures. Conclusively, in all aspects the available of the raw materials are the determinants of the level of profitable in the forest industry including rates of corruption. The solutions to low profitability in forest industries in Uganda The following could be the way forward for increased forest industries’ profitability in Uganda: Demarcate the forest into plots, that is, compartments and boundary to ensure sustainable management and harvesting. This will prevent encroachers into restricted plots “the Budongo Nature Reserve.” For those forests reserve that where surveyed early and has No clear demarcation can be identified by assessing the Natural forests on public and private land for re-establishment by technical management team. Strengthen the private sectors and other institutions by funding to achieve expansion capacity. Integrate the forestry practices and environmental concern into school, university curricula. Sensitize the public about the forest value. Forest is habitats of biodiversity species, wildlife, control of soil erosion and must be harvested, protected sustain ably. Organize to train, educate and employ trainers of trainees into the forest sector. To avoid high rate of corruption decentralize the forest to be managed by the local people, asset up auditing team and motivate the workers sustain ably. Train and employ forest guides and deploy them to monitor if there is any illegal activities in the forest like bush clearing, pitsawying and agricultural practices. The calprities is liable to intervene in courts’ of law or must be charged according to the set up laws. Try to minimize damage of stands of young trees, sapling in the natural forest during felling. Gazette the forest into plots for conservation and management of wildlife, research, seed supply, production and nature reserve. Where there are suspicions of bush burning try to clear strips to protect and break off fire breakage in the forest. Infact forest guides should monitor this illegality. To restore tree species of biodiversity there is need to practice domestication. This will overcome seasonality and improve upon abundances of tree species for future harvesting. The extension workers and other workers must be paid a sustainable package to prevent corruption and motivate their work so as to achieve maximum output. Entrepreneurs or organization/ firms must learn to save by opening bank accounts and minimize the expenditure as they receive thigh interest rate. The latter will be achieved by identifying such Banks that offer high interest rate. People should come together and form cooperatives or trade unions that will excel them to acquire large sum of finances. Micro-finance institutions, marketing boards must be set up. The latter issues loans to entrepreneurs while marketing boards identify Marketing Avenue for the farmers’ products. All entrepreneurs should identify opportunity cost that in seasons of threats in forest or forest produces, they can move to it. Use storage facilities like refrigeration to store perishable products for use later. Financing bodies should lower the interest rate to attract more FBSSE’S. There is need to increase on enrichment planting. Products must be of high quality by incorporating two coats of vanish or paints as finishes, curving as a way of value addition is necessary. The government should reduce the high taxes and promote enterprises with subsides to support them. Encourage intensive research of suitable farm forestry techniques, tree species, biodiversity and the impacting factors. Over come competition in market by branding the product and identify international markets. Wastage of resources can be restricted in a plant through closed supervision of works and guidance using better management skills. All dependent industries should be set near the source of raw materials. For example, sawmills are situated near the forest logging site or woodlots. The Banks, insurance company should intervene on ways of identifying markets, reducing loans interest rate and link them to international donors in collaboration with Ministry of Finance and Economic Planning. Use Mobile band sawmills or circular sawmills to replace pit swaying and automobile chain saws. Adapt silvicultural approaches of allowing coppices to develop for the next harvesting. Also, when harvesting trees that form coppices let it be done during drying season so that at the beginning of rainy seasons the buds sprout out. Increase trading and processing in order to increase upon income since high quality products are sold at market through branding produce. The industry must be a source of employment opportunity for the local populations through improved forest management. The government should solicit for donor funds and help to promote rural electrification and extension of water souse up to the rural population. And such industry like sawmills should be the first priority target. Encourage sustainable harvesting and tree planting as a measure to cover up the lost species. The government should utilize the Poverty alleviation Action Funds (PAF) from donation and grants to develop, open and rehabilitate new roads so that produce can be accessed easily. Where roads exist already but the physical statutes are bad, there is need to improve on it. Generally, profitability can only be achieved through dialogue and mutual understanding with the communities, if their satisfaction and organization goals are achieved. Therefore, we can say that overall solution is driving at Poverty Eradication, which is part of the Millennium Development Goals (MDGs) QN. DISCUSS THE REASONS AND POSSIBLE SOLUIONS FOR LOW PROFITABILITY OF FOREST INDUSTRIES IN DEVELOPING COUNTRIES. Introduction Forest industries are those that use forest products as raw material for processing, modeling and manufacture of other products. The final product normally has a high quality, as result of value addition. The common industries under these categories are classified as primary and secondary wood industries. Examples of primary wood industries are woodlots and sawmills. However, secondary wood industries are carpentry and joinery workshop producing furniture products and board, Nile ply in Jinja making pulp and paper including ply and boards. Based on location area we have rural-bases and urban industries. Based on mode of ownership we have government and privately owned and managed. Reasons for low profitability of forest industries in developing countries Low profitability implies less reward(s) shall be received from the forest industries in terms of value of products, quality and monetary terms. The emphasis here is case study of the Uganda forest industries. The reasons for low profitability are as follow: There is general lack of proper planning and evaluation while locating the industry’s processing sawmill plant which are dependable on oriented supply of raw materials, logs. The furtherest distance mean high costs of transport. The consequent market failure due to lack of market information, inappropriate royalty rates, trade restrictions, hidden subsides distorting the market for forest products. The development of urbanization and industrial growth in the area leads to degazzetting and subsequent reduction of the forest estate. An example, being Namanuve forest near the capital city- Kampala. Where there is increased population growth and migration will definitely cause demand for Agricultural produce and settlement. The concerned persons clear off the forest to grow agricultural crops with high rate of demand for firewood energy. Poverty being high in rural area will cause sudden encroachment into the forest illegally harvesting products unsustainably. This will be accompanied by unacceptable practice of clearing land for agriculture and charcoal burning living nothing for future utilization. There is low or lack of capital. The entrepreneur intending to invest in such enterprise lack initial working and fixed finance to start the business. The little they have cannot widen their size of business but is mean’t for living or survival. Low profitability of forest industries may be a result of economy of scale that defines the level under which the industry operates. Most industries in Uganda operate at rural, regional and at less extend national level. The tastes and preferences are distinct from individual to individual. Individuals prefer imported forest products to our own products produced locally, so the latter will experience low profitability. Policy deficiency relating to private sector and local communities over land tenure, access rights and responsibilities for resource management. The government restriction over the transaction in forest products by imposing high taxes and reduction of support in form of subsides to producers or consumers are the source of low profitability in forest sectors. The up coming forest industries have less knowledge, accessibility in acquiring credits from lending bodies like Banks, insurance companies, individuals in form of loans, donations and grants. Even if these industries had security, they fear the high interest rate charged per the amount acquired and payment period is short. The size of the enterprise is small that the family members operate it effectively. However, profitability remains low. There is low level of technology in which uses simply tools, equipment and machines. The employees are non- innovative to modify or improve upon the technology available. Our technology in Uganda majority use pit sawing in abundance, less on Mobile power saw which are even more wasteful. This account for low recovery or low profitably. The loggers are still rigid to the use of running –meter system that takes 14 feet or 4.2m length of log measured for pit sawing and living other portions unconverted into timber. Such method of conversion is deemed wasteful leading to low recovery percentage per tree. Unclear and poor physical infrastructure affect the supply, distribution of goods and services, accessibility of forest products and thus encourages the use of cheap means which are expensive in terms of increases transport costs. The poor management skills are weakening the way things or works are done in the industry. Managing peasant worker is more expensive because most of them are ignorant and dislike close supervision. However, manager may be insufficient of relevant knowledge of handling humans and control. This will directly have implication on productivity output per person per day per task. Some tree species are regarded as endangered species for example, Mahogany prevents others species from growing retarding rates of regeneration. At the forest where the canopy are closed, regeneration of trees are not possible or seedling/ sapling are experiencing high competition among the fast growth trees with low supply of nutrients for the undergrowth. These affect the bole, ageing and maturity period of the tree to reach its harvesting and so low profitability from undergrowth at that instant. Low profitability can emerge from competition between new industries producing similar products and those products that require value addition including substitutes. For example, when two carpentry workshops are located close to each other and producing similar furniture identical in all aspects. As one firm lowers its price so that more consumers get attracted. The one charging high price is aiming at profit maximization while the former are receiving low amount but at high sale per day per product. In market when the price of substitutes for timber; steel and Aluminum is low, people tend to purchase more of it reducing the demand for timber. Thus, timber is experiencing low profitability at that time. Employing unskilled and semi-skilled labour force is center of low profitability as low output are realized. Absence of labour in a forest industry will call for poor performance with hired work force, which is uneconomical. Shortage of raw material of the forest types, for example, timber is the back born of the low profitability and less utilization say in construction industries. The use of uneconomic air seasoning techniques of drying wood are time wasting and not preferred by large enterprises. This can be done at individual basis and the consequently low profitability. Drastic weather changes are a result of natural calamities in forestry. Very strong wind can break, split the branches or fell a whole tree before maturity and the hamper with the initial objectives of the enterprise. Others are most likely to be attacked by termites, fungi that are major process of woods deterioration and so low profitability. There is poor linkages or co-ordination between firms to the international markets. Abstractions of market linkages are general weakness that accounts for low profitability in forest industries. Low profitability arises due to entrepreneurs or industries failing to manage her finances well. They can’t account for the expenditure and donor moneys or lack knowledge on how to save income generated from sales of produce. The low profitability in the last half- of – decays has due to the government failing to privatize the gazetted forest (Natural forest reserve and woodlots) to Non- governmental organization or other institution to bring in reforms. If the retention of the forest Department (FD) up-to- dates would result into low profitability with unidirectional management. When the land is extending to extinction in the forest definitely will produce low profitable products due to severe degradation or depletion. These will be a sign of low biodiversity and thinner (small and short) diameter tree- height tending to shrubs and desert or semi- desert. The wildlife’s will definitely migrate to new location. Another source of low profitability in forest industry is over stressing or emphasizing about biodiversity conservation and management of forest resources sustainably. For example, restricting people to collect firewood in one plot and leave the other may be monotonous to them. They may think there is good product that would fetch money that the concerned body does not want them to get. The consequent is conflicts At times forest being good place for hideout and protection, the law -breakers (rebels) may prevent access to exploitation at that time and so low profitability. Entrepreneurs who work alone at family level have no access to large sum of supports from the government, donors and in terms of security their job is insecure. The measure is that they are not reliable to pensions, NSSF’s, termination benefits and allowance package. The pressing forces are nepotism and high level of corruption among the employees and consumers of the final products. This makes them satisfy themselves while the government is receiving less out of the natural forest. There is power and water supply shortage. The bark of tree-logs is best removed by soaking under water to easy the process in preparation for further processing. Illegal poaching of wildlife and pit swaying is accounting for losses in the forest. Meanwhile power is necessary for lightening and running of machines. The absence of these in the industry will low productive and encourage use of simple tools. Some of the industries that fail to realize the need for health through poor waste and disposal management such as pollutions from industries may be closed if found inherent to quality control measures. Conclusively, in all aspects the available of the raw materials are the determinants of the level of profitable in the forest industry including rates of corruption. The solutions to low profitability in forest industries in Uganda The following could be the way forward for increased forest industries’ profitability in Uganda: Demarcate the forest into plots, that is, compartments and boundary to ensure sustainable management and harvesting. This will prevent encroachers into restricted plots “the Budongo Nature Reserve.” For those forests reserve that where surveyed early and has No clear demarcation can be identified by assessing the Natural forests on public and private land for re-establishment by technical management team. Strengthen the private sectors and other institutions by funding to achieve expansion capacity. Integrate the forestry practices and environmental concern into school, university curricula. Sensitize the public about the forest value. Forest is habitats of biodiversity species, wildlife, control of soil erosion and must be harvested, protected sustain ably. Organize to train, educate and employ trainers of trainees into the forest sector. To avoid high rate of corruption decentralize the forest to be managed by the local people, asset up auditing team and motivate the workers sustain ably. Train and employ forest guides and deploy them to monitor if there is any illegal activities in the forest like bush clearing, pitsawying and agricultural practices. The calprities is liable to intervene in courts’ of law or must be charged according to the set up laws. Try to minimize damage of stands of young trees, sapling in the natural forest during felling. Gazette the forest into plots for conservation and management of wildlife, research, seed supply, production and nature reserve. Where there are suspicions of bush burning try to clear strips to protect and break off fire breakage in the forest. Infact forest guides should monitor this illegality. To restore tree species of biodiversity there is need to practice domestication. This will overcome seasonality and improve upon abundances of tree species for future harvesting. The extension workers and other workers must be paid a sustainable package to prevent corruption and motivate their work so as to achieve maximum output. Entrepreneurs or organization/ firms must learn to save by opening bank accounts and minimize the expenditure as they receive thigh interest rate. The latter will be achieved by identifying such Banks that offer high interest rate. People should come together and form cooperatives or trade unions that will excel them to acquire large sum of finances. Micro-finance institutions, marketing boards must be set up. The latter issues loans to entrepreneurs while marketing boards identify Marketing Avenue for the farmers’ products. All entrepreneurs should identify opportunity cost that in seasons of threats in forest or forest produces, they can move to it. Use storage facilities like refrigeration to store perishable products for use later. Financing bodies should lower the interest rate to attract more FBSSE’S. There is need to increase on enrichment planting. Products must be of high quality by incorporating two coats of vanish or paints as finishes, curving as a way of value addition is necessary. The government should reduce the high taxes and promote enterprises with subsides to support them. Encourage intensive research of suitable farm forestry techniques, tree species, biodiversity and the impacting factors. Over come competition in market by branding the product and identify international markets. Wastage of resources can be restricted in a plant through closed supervision of works and guidance using better management skills. All dependent industries should be set near the source of raw materials. For example, sawmills are situated near the forest logging site or woodlots. The Banks, insurance company should intervene on ways of identifying markets, reducing loans interest rate and link them to international donors in collaboration with Ministry of Finance and Economic Planning. Use Mobile band sawmills or circular sawmills to replace pit swaying and automobile chain saws. Adapt silvicultural approaches of allowing coppices to develop for the next harvesting. Also, when harvesting trees that form coppices let it be done during drying season so that at the beginning of rainy seasons the buds sprout out. Increase trading and processing in order to increase upon income since high quality products are sold at market through branding produce. The industry must be a source of employment opportunity for the local populations through improved forest management. The government should solicit for donor funds and help to promote rural electrification and extension of water souse up to the rural population. And such industry like sawmills should be the first priority target. Encourage sustainable harvesting and tree planting as a measure to cover up the lost species. The government should utilize the Poverty alleviation Action Funds (PAF) from donation and grants to develop, open and rehabilitate new roads so that produce can be accessed easily. Where roads exist already but the physical statutes are bad, there is need to improve on it. Generally, profitability can only be achieved through dialogue and mutual understanding with the communities, if their satisfaction and organization goals are achieved. Therefore, we can say that overall solution is driving at Poverty Eradication, which is part of the Millennium Development Goals (MDGs)

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