BASELINE STUDY 5, Thailand - Forest Trends

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6. THAI FOREST PRODUCTS MANUFACTURING INDUSTRY 6.1 Overview The FAO estimates that two thirds of the 2,500 wood-based industries operating in Thailand are furniture producers (FAO 2009:61-62). These manufacturers employ upwards of 260,000 people (11% of total manufacturing), and paid out approximately US$560 million in wages and salaries. In addition, FAO estimates that there were 3,000 timber traders, 242 smaller scale sawmills, over 5,000 smaller scale woodworking operations, 22 particle board mills, 4 hardboard mills, 7 medium-density fiberboard mills in 2004. Assuming these figures have stayed roughly stable since 2004, plantations and wood processing can thus be considered as a strategic sector for the Thai economy. With increasing liberalization and decentralization trends in Thailand, the private sector plays a larger role in the wood sector, furthering the gap between the public and private wood sector in terms of economic versus conservation goals. These divisions are in part represented by the split between old conservation laws governing the RFD and more recent regulations for the private wood sector, such as with customs and certification schemes. The private sector procures wood from several sources. For domestic plantation wood, companies can purchase directly from smallholder tree farmers (as part of the RFD-sponsored programs), or directly from FIO (e.g. teak). For natural wood of higher quality necessary for export trade, Thai companies import wood from other countries. Due to the more restrictive trading environment in Thailand compared to other countries in the region, Thai wood companies are voicing increasing concerns, and even relocating to other countries such as China and Malaysia, to secure cheaper raw materials and labor for export-oriented manufacturing. All exported wood from Thailand must be value-added. No logs of natural trees of conservation value can be legally exported. The one exception is that the FIO can legally export logs, usually teak (often, but not exclusively, from plantations). Technically, the Minister of the Ministry of Commerce can give an exception to this law and allow another agency other than FIO to export logs. So far, however, this has not yet occurred. Nonnatural/plantation tree species of no conservation value, such as rubber and eucalyptus, can be exported in log form, however. 6.2 Woodchips and Pulp and Paper Manufacturing The largest segment of the wood processing industry in Thailand in terms of volume is clearly pulp and paper, followed by sawmilling and particleboard. The pulp and paper sector consumes almost all of the annual eucalyptus woodchip production in Thailand, with some volumes exported as woodchips. Overall pulp manufacturing in Thailand is currently about 1.25 million metric tonnes per year (RISI 2008). However, some of these companies (such as Panjapol Pulp Industry) rely predominantly upon access to recycled sources. The lack of capacity expansion in the Thai pulp sector has facilitated modest increases in woodchip exports in recent years. © EU FLEGT Facility, BASELINE STUDY 5, Thailand: Overview of Forest Law Enforcement, Governance and Trade, July 2011 This Action is funded by the European Union and the governments of Finland, France, Germany, the Netherlands, Spain and the UK. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. www.euflegt.efi.int 40
Table 2: Major Pulp Producers in Thailand Pulp and Paper Company Location Capacity in Company Contracting Tree 2006 (tonnes) Farmers Advance Agro Prachinburi Province 515,000 Advance Agro Phoenix Pulp and Paper Khon Kaen 235,000 Phoenix Pulp and Paper Panjapol Pulp Industry Ayutthaya 110,000 - SCG Paper a Ratchaburi 100,000 Siam Forestry Siam Cellulose Kanchanaburi 86,000 Siam Forestry Environment Pulp and Paper b Nakhonsawan 100,000 - Total 1,146,000 a Former Siam Pulp and Paper b Started up in October 2004 Sources: Modified from Boulay 2009; FAO 2008; and PRNewswire 2008. Table 3: Major Thai Woodchip Producers Thailand has six major plantation hardwood woodchip producers, some of which operate independently of pulp mills, with at least four of these targeting the export market. Company Location Woodchip Production Capacity (BDMT/year) Soon Hua Seng Bangpakong Mill 200,000 Siam Tree Development (JV with Chonburi Province 200,000 Japanese Itochu Corp.) Thai Wittawat Surin Province 40,000-50,000 Kittawee Surin Province 40,000-50,000 (mostly selling to domestic mills) Thai Martin Prachuab Kiri Khan Province 145,000 (mostly selling to Siam Pulp) Siam Cement Group Various provinces N.A., but includes exports Sources: Barney 2005; RISI 2008; and Jones 2010. © EU FLEGT Facility, BASELINE STUDY 5, Thailand: Overview of Forest Law Enforcement, Governance and Trade, July 2011 This Action is funded by the European Union and the governments of Finland, France, Germany, the Netherlands, Spain and the UK. The views expressed herein can in no way be taken to reflect the official opinion of the European Union. www.euflegt.efi.int 41
Page 1 and 2: BASELINE STUDY 5, THAILAND: Overvie
Page 3 and 4: BASELINE STUDY 5, THAILAND: Overvie
Page 5 and 6: Table of Contents 1. EXECUTIVE SUMM
Page 7 and 8: PREP Private Reforestation Extensio
Page 9 and 10: Figure 1. Thailand Forest Products
Page 11 and 12: National wood management and tracki
Page 13 and 14: 3. NATIONAL FORESTRY STRATEGY, POLI
Page 15 and 16: Anatomy of Forest Land Classificati
Page 17 and 18: Community Forestry Thailand has mor
Page 19 and 20: 4. DEMAND: DOMESTIC MARKETS AND EXP
Page 21 and 22: ound logs are exported each year by
Page 23 and 24: 4.1.1 Exports to China China repres
Page 25 and 26: surance systems of Thai paper would
Page 27 and 28: 4.1.5 Exports to Vietnam Figure 14.
Page 29 and 30: 4.1.7 Exports to Australia Figure 1
Page 31 and 32: The Company needs to prepare the fo
Page 33 and 34: Sawnwood continues to be Thailand's
Page 35 and 36: According to the official data, Mya
Page 37 and 38: 5.1.6 Imports from Canada, European
Page 39 and 40: et al. 2004). 16 This places Thaila
Page 41: potential of existing teak plantati
Page 45 and 46: 7. CERTIFICATION AND VERIFICATION S
Page 47 and 48: over 11,000 hectares (Smartwood 200
Page 49 and 50: 8. STAKEHOLDER ANALYSIS 8.1 Governm
Page 51 and 52: Office of the Rubber Replanting Aid
Page 53 and 54: 8.2 Forest Industry Players Woodchi
Page 55 and 56: Table 6: Thai Particleboard Factori
Page 57 and 58: Ruang Utai Suratthani (1991) Co, Lt
Page 59 and 60: Development Partner Engagement in t
Page 61 and 62: International Tropical Timber Organ
Page 63 and 64: ANNEX 1. CUSTOMS PROCEDURES (JULY 2
Page 65 and 66: If all information is error free, t

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