Thukten Zangpo

The wood-based industries, represented by the Association of Wood-based Industries (AWBI), expect to commence timber extraction and export from March or April this year.

This initiative is part of the government’s medium-term plan for timber extraction, targeting 10.7 million cubic feet annually for the years 2024 to 2026, aimed at earning foreign exchange and offset trade balance.

An assessment report from the Department of Forests and Park Services (DoFPS) under the Ministry of Energy and Natural Resources (MoENR), titled “Stop-gap Interventions of Sustainable Timber Management,” identified a potential area of 208,065 hectares for silvicultural thinning, capable of yielding a total log volume of 10.7 million cft annually.

To achieve this, the government plans to involve private parties to create an experiential learning process related to export and securing markets.

The Natural Resources Development Corporation Limited (NRDCL) and Bhutan Board Products Limited (BBPL) will be allocated 50 percent of the extracted volume in both log and sawn form, with the remaining 50 percent going to private loggers, represented by AWBI. Out of the 10.7 million cft volume, both NRDCL, BBPL, and AWBI will be allocated to extract 5.35 million cft each annually.

In preparation, AWBI requested non-members to form a united consortium on January 29 this year to achieve the extraction target.

AWBI’s president, Phuntsho Wangdi, clarified that the association does not represent all wood-based industries in the country.

Interested industries with license holders, such as furniture units, handicraft units, charcoal manufacturing units, and wood chips production units, can join the project. Despite AWBI having 100 members, figures from the Department of Industry show 1,112 wood-based industries in the country, including 821 furniture units and 165 sawmills.

Phuntsho Wangdi said that the primary objective of forming a united consortium is to seize this economic opportunity from the government, demonstrating commitment and competency in the sustainable management of natural resources by optimising the value chain based on emerging market potential.

He added that the private sector submitted the timber extraction plan to the government in November last year and is ready to commence once approval is granted by the DoFPS under MoENR.

The private loggers’ cable cranes, previously engaged with NRDCL for the pilot phase of timber extraction operations until December last year, are available after the contractual agreement expired this year.

Bhutan initiated a pilot project for timber extraction and export, targeting a volume of 315,000 cubic cft or 0.315 million cft. NRDCL and BBPL were allocated to extract 140,000 cft and 175,000 cft, respectively.

Phuntsho Wangdi stated that timber extraction is not a challenge for the private sector due to prior experience.

However, meeting the target in the first year may be challenging due to logistical arrangements and market opportunities. He emphasised the need to break the monopoly and meet the government’s objectives of 3As—availability, accessibility, and affordability.

The private sector also needs to improve infrastructure and procure new equipment for timber extraction.

India is a major importing country for wood and wood-based products regionally and globally, making it Bhutan’s primary export destination, mainly through Phuentsholing.

Bhutan imported wood and wood-based products worth Nu 4.42 billion in 2021 and Nu 4.28 billion in 2022, with charcoal constituting 80 percent, amounting to Nu 3.48 billion.