Value chain analysis of veneer- based engineered wood products in Mufindi District Tanzania

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Date

2024-05

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Publisher

Sokoine University of Agriculture

Abstract

Processing tree logs into veneer-based engineered wood products represents a crucial strategy for enhancing the efficient utilization of forest resources, driven by dynamic factors such as the evolving demand for versatile wood products in the construction industry. This global shift is evident in the heightened market demand for engineered wood products, underscoring the substantial contribution of the forest sector to the economic growth and development of the construction industry worldwide. In Tanzania, wood-based industries play a pivotal role as primary sources of raw materials and intermediate products for both local and international consumption. The escalating production and demand for veneer, plywood, and marine boards in the Mufindi District have prompted an exploration of the potential of Veneer based Engineered Wood Products (VBEWPs) through the value chain, recognizing the importance of this sector in addressing evolving market needs and contributing to economic development. This study aimed to comprehensively map the actors involved in the value chain of veneer-based engineered wood products, analyze their activities, assess the profitability of these actors, evaluate the value added by each participant, and explore challenges encountered throughout the value-added distribution process. A cross-sectional study design was adopted where a total of 152 actors involved in VBEWPs were sampled. Interviews, focus group discussions, and key informant interviews were used to collect data. Descriptive statistics, such as mean, standard deviations, minimum, maximum, and frequencies. The computation of key metrics, including Gross Profit Margin, Value added, and Value added distribution. Additionally, Multiple Response analysis was employed to analyze the challenges within the VBEWPs value chain. Furthermore, the study utilized a linear regression model to explore factors influencing returns on engaging in VBEWPs, providing insights into the opportunities within this value chain. Findings from the study revealed a separate structure within the veneer-based engineered wood products (VBEWPs) value chain, comprising small and large-scale tree growers as the primary actors. Profitability analysis indicated that tree growers, leading in both chains, achieved substantial profits, with percentages of 79.4% and 89.1%. Notably, value addition and distribution were predominantly associated with processors, scoring 90.4% for plywood and 91.83% for marine board. Furthermore, margins in value distribution were leading, with percentages of 60.4% and 68% in both small and large-scale chains. The study revealed actors in the VBEWPs value chain, such as tree growers, brokers, traders, transporters, manufacturers, suppliers, consumers, and regulators. Furthermore, the study identified the main challenges faced by these actors. Challenges such as fire, low prices, livestock invasion, poor infrastructure, limited access to financial services, limited access to improved tree varieties, conflicts among actors, high taxes, and poor electric supply were highlighted by the majority of respondents. The linear regression model results demonstrated that demographic characteristics, specifically age, gender, and marital status, significantly influenced returns on investing in tree growing among tree growers (P<0.05). The study concluded that processing veneer- based engineered wood products is a crucial economic activity that ensures efficient use of resources from plantations, enhances people's lives and reduces the depletion of forest resources. Hence study recommended emphasizing the need for creating conducive environments to strengthen the competitive advantages of local producers in the VBEWPs industry and the significance of cooperative associations for small-scale tree grower chain actors to enhance their profitability and improve production.

Description

MSc Dissertation

Keywords

Value Chain Analysis, Wood Products, Veneer- Based Engineered Wood Products, Mufindi District, Tanzania

Citation