S ec to r P r o f i l e
Major contributor In total, forestry contributes about seven per cent to PNG’s gross domestic product, plus millions of kina in taxes, landowner royalties, infrastructure development and work for more than 10,000 people. Most of PNG’s log exports go to eleven Asian countries: 89% to China, followed by Japan, Korea, India, the Philippines, Taiwan, Thailand and Vietnam.
Major industry participants Malaysian-owned R H Group is the largest player in PNG’s forestry sector. Other major industry participants include Cloudy Bay Sustainable Forestry Ltd (see box on page 44), Innovision (PNG) Ltd, Open Bay Timber Ltd, PNG Forest Products Ltd (manufacturers of Niu Homes—see box on page 43), Pac-Rim Hardwoods (PNG) Ltd, Stettin Bay Lumber Co. Ltd and Turama Forest Ind. Ltd.
New policy promotes value-adding Since January 2010, government policy has dictated that all newly-approved forest projects must contain a strong element of downstream processing. Producers already generate sawn timber, veneer sheets, plywood and processed timber exports, but these sectors will receive much greater emphasis.
Opportunities for expansion Other opportunities for further expansion of PNG’s forest industry include: the increasing domestic demand for timber and wood products driven by PNG’s major new resources projects; establishing plantations; and forest enhancement under climate change protocols. With five major producers already independently certified for legal origin and chain of custody, new export opportunities should arise in markets requiring third-party verification such as Australia, the USA and the European Union. The PNG Forest Authority plans to develop 240,000 hectares of commercially viable and sustainable
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Credit: MCPNG
forest plantations by 2030. Approximately 4000 hectares is expected to be contributed by private investors, including new entrants to the sector. Furthermore, the International Tropical Timber Organisation (ITTO) is working with the PNG Forest Authority to enhance forest law enforcement. Under a two-year pilot project, it will develop a timber tracking system at two timber concessions, develop a legality standard and industry code of conduct, and develop a forestry monitoring module for local stakeholders. According to the ITTO, the project could lay the foundations for future initiatives such as a national timber inventory, carbon sequestration monitoring, and certification.