Export oriented Rubberwood industry in Sri Lanka Isurie Dharmasoma AS 2006 022

Rubberwood industry Since the 1980’s, rubberwood has become a major wood product in many countries. Rubberwood has special properties to use as a wood product.(light color, easy machining & staining properties) It has a great potential for substitution of Asian timber species such as Lauan, Meranti, Ramin & Beech.

The potential of rubber wood as a source of timber has already been recognized in Thailand, Sri Lanka, Indonesia and Malaysia. Malaysia has the most diversified rubberwood industry.

Rubber timber Small diameter logs Sawn logs Veneer logs Sawn wood plywood Chip board MDF cementboard Fuel wood/charcoal Furniture mills Furniture, Brush handles, blocks, wooden toys

Processing of rubber wood Sawing Preservative Treatment Seasoning

Wood working operations Ready to export

Export procedure Select a buyer Register as exporter in EDB, Inland Revenue dpt, Sri Lanka Customs Obtain license from FD to export wooden products (Wood –Items under license control) Sales contract Export

Exported types of rubber wood Densified wood in blocks, plates, strips or profile shapes* Builders’ joinery & carpentry of wood, including cellular wood panels, assembled flooring panels** Parquet panels For mosaic floors of rubber wood Other multilayer rubber wood Most rubberwood is traded in the form of finished furniture (55%) and furniture parts (17%). Trade in rubberwood sawnwood is small.

Export of rubber wood based products Country 2004 (Rs) 2005 2006 2007 2008 Maldives 8348394 3216947 2271700 3893727 9807536 USA 5256253 8970639 7156148 13693302 21132784 UK 19303829 13535250 3862231 11317857 8557209 Rubberwood products are exported mainly to the United Kingdom, Unite States, Maldives, France, Germany, Saudi Arabia

Major rubber wood based products exported countries(2004-2008) Value(Rs) Year

Export Performance of Rubber wood based Product Sector Year other wood of Rubber* (kg) Densified wood of rubber wood**(kg) Parquet panel of rubber wood(kg) for mosaic floors of rubber wood(kg) other multilayer of rubber wood(kg) 2004 8301749 1809357 114051243 2005 2544214 10949399 15587803 2006 3410013 11290995 7465396 2007 4613493 32328862 18868902 3278181 18454066 2008 10501738 238697524 10593511

Contribution of Rubberwood industry to total exports Year FOB value(Rs) Total(Rs) % of total 2004 4611278782 885998366326 0.52 2005 2773893636 563932095067 0.49 2006 3225774485 703434031838 0.45 2007 5159222811 848642877478 0.60 2008 43106608127 619496838818 6.95 Rubberwood based products are a small amount of total exports of the country.

Rubber wood availability Rubber wood plantations Estate plantation(>20 ha) 66076ha Small holding(<20ha) 48655ha Rubberwood use only after the tree completes its latex-producing cycle and dies. Rubber wood plantations produce an average of 0.24m3 of peeler logs & 65m3 of sawn logs/ha.

District Small holding/ha Estate/ha Total/ha Kegalle 14503 20300 34803 Kalutara 13332 16590 29922 Ratnapura 9532 12137 21669 Colombo 3235 3829 7067 Galle 1667 4851 6518 Matara 1451 2163 3614 Gampaha 2609 446 3055 Kurunegala 557 2196 2753 Matale 170 1691 1861 Monaragala 531 1300 1831 Kandy 964 202 1166 Hambantota 39 2 41 48665 66076 114731 Rubber wood plantations by district in Sri Lanka, 2002(DCS 2002)

Problems faced by industry……. Reduce export capacity Outdated production technology Difficulties in meeting buyer-required product volumes Difficulties in maintaining timely delivery of orders lack of experienced, skilled labor

The raw material has been in short supply in recent years. Exporters have to bargain so much as buyers can get cheaper products From Malaysia. The raw material has been in short supply in recent years. Cost of raw materials is increasing rapidly. Year cost of cubic ft(Rs) 1990 70 2001 80 2006 180 2009 160(24ft<) 100(18-24ft)

Lack of information on buyers Lack of government policies to encourage new investments  Lack of government policies to encourage existing exports High shipping/handling cost High export duties/tariff

Exporters have paid little attention to adopt modern communication methods with buyers. Industry export non-certified wood products due to the high costs of certification and no foreseeable benefits to the company.

Suggestions Government institutions should be partner with industry in taking the steps to strengthen the export.(Ex:EDB) Modify policies and regulations regarding wood and wood product transportation and custom procedures conduct workshops to educate and train managers and employees to minimize waste, improve quality, introduce new designs, and maximize labor efficiency.

Use modern electronic methods of communication to exchange and find new information. Development of websites Exporters should invest in marketing or advertising their products in foreign markets.

Conduct awareness programs to educate exporters about the potential benefits of forest certification. Formation of exporter groups will reduce certification costs by obtaining group certification. Increase the extent of rubberwood plantations.

Discussion The rubberwood processing industry in Sri Lanka is the oldest of all the countries. However, this industry has not developed significantly either in volume production or in the level of technology used in processing. Most of industries provide products primarily to the domestic market ,small % of their production export to international markets. Most industries rely on a few major buyers with significant bargaining power. However, there is an upward trend in international demand for Sri Lankan rubberwood furniture.

References Mr. W.Jinadasa, statistician, statistical department, Sri Lanka customs Mr.Indika, Rowood Lanka industries(pvt)Ltd,Nelundeniya Mr. Premarathne-Factory manager, Gamage saw mills, Padukka Manager,Haritha furniture and saw mills, Homagama Funeral bells for the rubberwood industry,Chathuri Dissanayake, Sunday Times, October 22, 2006 Rubberwood Processing Manual , Research Institute Of Wood Industry , Chinese Academy Of Forestry ,Beijing Non-forest Tree Plantations ,Killmann,Forestry Department, FAO, Rome Italy, April 2001

The Utilization, Processing And Demand For Rubberwood As A Source Of Wood Supply Byjoerg Balsiger Et Al,FAO Forestry Planning And Statistics Branch Tropical wood product exports from Sri Lanka, Perera et al, Forest Products Journal Rubberwood, Hand book, Sakar plywood Ltd Export and Import Statistics, Sri Lanka Customs,2004 Export and Import Statistics, Sri Lanka Customs,2005 Export and Import Statistics, Sri Lanka Customs,2006 Export and Import Statistics, Sri Lanka Customs,2007 Export and Import Statistics, Sri Lanka Customs,2008

Thank you