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Market-oriented production management of forest products in Kenya Kahuki, Clement David Ng’ati 1979

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MARKET-ORIENTED PRODUCTION MANAGEMENT OF FOREST PRODUCTS RESOURCES IN KENYA by CLEMENT DAVID NGATI KAHUKI B . S c . ( F o r . ) , Makerere U n i v e r s i t y , Kampala, 1973 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE i n THE FACULTY OF GRADUATE STUDIES ( F a c u l t y o f F o r e s t r y ) We a c c e p t t h i s t h e s i s as con f o r m i n g t o the r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA May, 19 7 9 © Clement D a v i d Ng'ati K a h u k i I n p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f t h e r e q u i r e m e n t s f o r an a d v a n c e d d e g r e e a t t h e U n i v e r s i t y o f B r i t i s h C o l u m b i a , I a g r e e t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r a g r e e t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y p u r p o s e s may be g r a n t e d by t h e Head o f my D e p a r t m e n t o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t c o p y i n g o r p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . FORESTRY D e p a r t m e n t o f The U n i v e r s i t y o f B r i t i s h C o l u m b i a 2075 W e s b r o o k P l a c e V a n c o u v e r , C a n a d a V6T 1W5 JUNE 29, 1979 ABSTRACT S e l f - r e l i a n c e i n wood p r o d u c t s i s one o f the major o b j e c t i v e s o f Kenya's f o r e s t p o l i c y ; s t a t e d as t h e management of f o r e s t r e s o u r c e s f o r t h e adequate p r o v i s i o n of t h e needs of t h e c o u n t r y i n t i m b e r and o t h e r f o r e s t p r o d u c t s t o meet the community's r e q u i r e m e n t s , and where p o s s i b l e p r o v i d e f o r e x p o r t s . The i m p l i c a t i o n s o f such a p o l i c y a r e such t h a t s t r a t e g i e s f o r m u l a t e d , programmes d e s i g n e d and p r a c t i c e s employed i n p r o d u c t i o n o f wood r e s o u r c e s and wood-based p r o d u c t s s h o u l d be geared towards the a n t i c i p a t e d nedds of the i n t e r m e d i a t e consumers, w h i c h i n t u r n are o n l y r e s p o n d i n g t o the needs o f the f i n a l consumers - t h e s o c i e t y . I t i s argued here t h a t such p r o d u c t i o n s t r a t e g i e s , programmes and p r a c t i c e s cannot be f o r m u l a t e d and pursued t o s a t i s f a c t o r i l y f u l f i l l t h e p o l i c y o b j e c t i v e s , w i t h o u t f i r s t i d e n t i f y i n g and u n d e r s t a n d i n g the needs of the s p e c i f i c t a r g e t m arkets. Among f a c t o r s i d e n t i f i e d as n e c e s s a r y i n u n d e r s t a n d i t h e t a r g e t markets a r e market s t r u c t u r e , s i z e , l o c a t i o n and dynamics of consumption p a t t e r n - d e t e r m i n i n g parameters such as t i m e , demographic and economic f a c t o r s . U s i n g p r o d u c t i o n and consumption d a t a , p r i m a r i l y f o r t h e p e r i o d 1960-1975, q u a n t i t a t i v e and q u a l i t a t i v e methods were used t o a n a l y z e and d e s c r i b e t h e v a r i o u s markets o f wood p r o d u c t s , as t h e b a s i s o f f o r e c a s t i n g the p r o b a b l e f u t u r e market t r e n d s . On t h e b a s i s o f c u r r e n t management and consumption t r e n d s , f o r e c a s t e s t i m a t e s i n d i c a t e p o s s i b l e i n t e r n a l wood s u p p l y d e f i c i t s d u r i n g , and beyond, the p e r i o d 1996-2000 AD. C u r r e n t and p r o j e c t e d market t r e n d s i n d i c a t e a p r o g r e s s i v e s h i f t from m e c h a n i c a l wood i n d u s t r i e s and p r o d u c t s , m a i n l y sawnwood, towards f i b r e - b a s e d r e c o n s t i t u t e d wood p r o d u c t s - f i b r e b o a r d s , p a r t i c l e b o a r d s and paper p r o d u c t s . T h i s p r o j e c t e d development would te n d t o f a v o u r g r e a t e r a t t e n t i o n by f o r e s t management t o the p o t e n t i a l s o f n o t o n l y n a t u r a l f o r e s t s but s p e c i e s d i v e r -s i f i c a t i o n o f man-made f o r e s t s . The f i b r e - b a s e d i n d u s t r i e s can s a t i s f a c t o r i l y u t i l i z e s m a l l - s i z e d l o g s , hence s h o r t e r r o t a t i o n s , and a wide range o f s p e c i e s c o m p o s i t i o n s i n c e some of t h e p r o d u c t s do not e x h i b i t i n d i v i d u a l l y s p e c i f i c wood c h a r a c t e r i s t i c s . P l a n t a t i o n - s p e c i e s d i v e r s i t y , i n a d d i t i o n t o a v o i d i n g t h e r i s k s o f p o s s i b l e l o s s i n case o f an e p i d e m i c , has t h e advantages o f c o m p a r a t i v e c l i m a t i c and z o n a l s u i t a b i l i t y i n e s t a b l i s h m e n t . Trends i n d i c a t e t h a t fuelwood i s , and f o r some time w i l l c o n t i n u e t o be,the s i n g l e major component o f wood consumption, 3 r i s i n g from about 15 m i l l i o n M (rw) by 1975 t o about 30 m i l l i o n 3 M (rw) per y e a r by 2000 AD; y e t f o r e s t management seems t o have no s u p p l y s t r a t e g y f o r t h i s p r o d u c t . A major i d e n t i f i e d d e f i c i e n c y i n f o r e s t r y p r o d u c t i o n -u t i l i z a t i o n - m a r k e t i n g as a system has been i n s u f f i c i e n t c o -o r d i n a t i o n i n wood p r o d u c t i o n management d e c i s i o n s w i t h d i f f e r e n t i n d u s t r i e s ' development programmes and a n t i c i p a t e d - i v -market t r e n d s , and t h e i r r e q u i r e m e n t s . P r o b a b l e f u t u r e wood supply-demand b a l a n c e s were c o m p a r a t i v e l y e s t i m a t e d on the b a s i s o f p o t e n t i a l s u p p l i e s from c u r r e n t and p l a n n e d wood p r o d u c t i o n programmes and t h e p r o j e c t e d m arkets. From t h e v i e w p o i n t o f wood p r o d u c t i o n management d e c i s i o n s , medium and l o n g - t e r m market f o r e c a s t s can be c o n s i d e r e d more m e a n i n g f u l t h a n s h o r t - t e r m needs, s i n c e t h e l a t t e r w i l l have t o draw from m a t u r i n g s t o c k s , w h i l e c u r r e n t and pl a n n e d f o r e s t e s t a b l i s h m e n t programmes a r e t h e b a s i s o f f u t u r e medium and l o n g - t e r m s u p p l i e s . F o r t h i s r e a s o n , emphasis has been l a i d on the medium and l o n g - t e r m f o r e c a s t s , up t o 50 y e a r s from now,or 1 t o 2 p r o d u c t i o n r o t a t i o n s . T h i s a n a l y s i s i n d i c a t e s t h a t w h i l e management has p l a c e d emphasis on p l a n t a t i o n f o r e s t r y f o r i n d u s t r i a l wood s u p p l i e s , t h e s t r a t e g y , d e s p i t e i t s m e r i t s , i s b i a s e d i n f a v o u r o f p r e -d o m i n a n t l y two e x o t i c softwood s p e c i e s groups, c o m p r i s i n g of c y p r e s s and p i n e s d e s p i t e t h e f e a s i b i l i t y o f p r o d u c i n g wood s u p p l i e s from p o t e n t i a l l y commercial and m a r k e t a b l e i n d i g e n o u s s p e c i e s (mainly hardwoods) and o t h e r e x o t i c hardwoods. While n a t u r a l f o r e s t s c o n s t i t u t e about 92 p e r c e n t and p l a n t a t i o n s 8 p e r c e n t o f Kenya's f o r e s t s , l i t t l e management e f f o r t has been d i r e c t e d a t com m e r c i a l wood p r o d u c t i o n from t h e f o r m e r , whose annual s u p p l i e s average 2 0 p e r c e n t o f t o t a l i n d u s t r i a l wood h a r v e s t e d . - v -Q u a n t i t a t i v e and q u a l i t a t i v e a n a l y s i s o f i n d i g e n o u s woods i n n a t u r a l f o r e s t s i n d i c a t e s g r e a t commercial p o t e n t i a l o f t h e s e i n d i g e n o u s r e s o u r c e s . There i s a need f o r a s h i f t from e x c l u s i v e r e l i a n c e on s i l v i c u l t u r a l c o n s i d e r a t i o n s and wood p r o d u c t i o n p e r se as t h e main c r i t e r i a f o r p r o d u c t i o n management, t o a s e t of c r i t e r i a t h a t g i v e s s u f f i c i e n t c o n s i d e r a t i o n emphasis on u t i l i z a t i o n and m a r k e t i n g r e q u i r e m e n t s . G r e a t e r c o - o r d i n a t i o n between f o r e s t e r s , i n d u s t r i e s and m a r k e t e r s i s r e q u i r e d i n t h e a r e a s o f r e s e a r c h , development d e c i s i o n s , i n f o r m a t i o n g a t h e r i n g and d i s s e m i n a t i o n , and wood r e s o u r c e s a l l o c a t i o n and s a l e s t o f a c i l i t a t e P r o d u c t i o n P l a n n i n g f o r the t a r g e t market needs. Supervisor, Dr. D. Haley - v i -TABLE OF CONTENTS Page ABSTRACT i i TABLE OF CONTENTS. v i LIST OF TABLES x LIST OF ILLUSTRATIONS ( F i g u r e s , C h a r t s & Maps) . . . . x i i i LIST OF APPENDIX TABLES x v i ACKNOWLEDGEMENTS x v i i CHAPTER 1. INTRODUCTION, STUDY DESCRIPTION, BACKGROUND AND METHODOLOGY 1 1.1 INTRODUCTION 1 1.2 STUDY DESCRIPTION 5 1.2.1 Problem D e f i n i t i o n and H y p o t h e s i s 5 1.2.1.1 The problems 6 1.2.1.2 H y p o t h e s i s 6 1.2.2 Study O b j e c t i v e s 7 1.2.3 Scope o f t h e Study 7 1.3 BACKGROUND INFORMATION 9 1.3.1 Some S a l i e n t Features. 9 1.3.1.1 Geography .9 1.3.1.2 The p e o p l e 11 1.3.1.3 Economic s e t t i n g . . . .14 1.3.2 F o r e s t r y S e c t o r i n the N a t i o n a l Economy 21 1.3.2.1 An h i s t o r i c a l background . . . . . . .21 1.3.2.2 F o r e s t r y ' s C o n t r i b u t i o n 24 1.3.2.3 F o r e s t P o l i c y . 29 1.3.2.4 O r g a n i z a t i o n and A d m i n i s t r a t i o n . . . . 30 1.4 METHODOLOGY. 3 3 1.4.1 Market A n a l y s i s 34 1.4.2 Market F o r e c a s t i n g Models . . . .36 1.4.3 Wood Raw M a t e r i a l Supply A n a l y s i s .-45 1.4.4 S y n t h e s i s 49 - v i i -2. MARKETS FOR KENYA'S WOOD PRODUCTS 51 INTRODUCTION 51 2.1 SAWNWOOD 53 2.1.1.1 Problems o f e s t i m a t i n g p r o d u c t i o n and consumption . . . . 53 2.1.1.2 Apparent p r o d u c t i o n and consumption 55 2.1.2 Sawnwood M a r k e t s 60 2.1.3 P r o j e c t i o n s 66 2.2 WOOD-BASED PANELS 7 5 2.2.1 Plywood: P r o d u c t i o n and Markets .75 2.2.2 Fibrewood and P a r t i c l e b o a r d . . .76 2.2.3 Consumption P r o j e c t i o n s o f Wood-based P a n e l s 80 2.2.4 S e c t o r Demand f o r Wood-based P a n e l s 84 2.3 PAPER PRODUCTS 92 2.3.1 Domestic P r o d u c t i o n 92 2.3.2 Markets and Consumption o f Paper and Paper P r o d u c t s 93 2.3.3 P r o j e c t e d Consumption E s t i m a t e s of D i f f e r e n t Types o f Paper. . - 95 2.3.3.1 C u l t u r a l p apers • • • .104 2.3.3.2 I n d u s t r i a l papers . • .106 2.3.3.3 A l l papers and paperboard 107 2.4 ROUNDWOOD OTHER THAN FUELWOOD 109 2.4.1.1 Power p o l e s , b u i l d i n g p o l e s and fenc e posts-.109 2.4.1.2 Mangrove p o l e s 113 2.4.2 Demand P r o j e c t i o n E s t i m a t e s f o r Roundwood 116 2.4.2.1 P o l e s and fe n c e posts-.116 2.4.2.2 Mangrove p o l e s • • • . 1 2 0 2.5 FUELWOOD MARKETS AND CONSUMPTION- . . . 121 2.5.1 Fuelwood Supply S i t u a t i o n - • • -121 2.5.2 Consumption E s t i m a t e s 122 2.5.3 P r o j e c t e d Fuelwood Consumption E s t i m a t e s 129 2.6 SUMMARY. - -' 132 - v i i i -3. WOOD PRODUCTION AND SUPPLY 135 INTRODUCTION 135 3.1 FOREST AREAS 13 6 3.1.1 L o c a t i o n and S i z e s 136 3.2 THE GROWING STOCK 144 3.2.1 S u p p l i e s P o s i t i o n 144 3.2.1.1 S u p p l i e s from n a t u r a l f o r e s t s 147 3.2.1.2 F u t u r e s u p p l i e s from n a t u r a l f o r e s t s . . . . 155 3.2.2 . .160 3.2.2.1 S u p p l i e s from p l a n t a t i o n s 160 3.2.2.2 F u t u r e wood s u p p l i e s from p l a n t a t i o n s • • • -167 4. WOOD RAW MATERIAL: CONSISTENCIES AND INCONSISTENCIES OF MARKETS REQUIREMENTS AND PRODUCTION MANAGEMENT 180 INTRODUCTION. 180 4.1 QUANTITATIVE MARKET REQUIREMENTS FOR WOOD PRODUCTS . . 182 I n t r o d u c t i o n 182 4.1.1 C o n v e r s i o n R e c o v e r i e s 182 4.1.1.1 Sawnwood 182 4.1.1.2 Wood p a n e l s 186 4.1.1.3 P u l p and paper 190 4.1.1.4 Fuelwood 192 4.1.2 Roundwood Requirements f o r D i f f e r e n t P r o d u c t s 197 4.1.2.1 F i b r e and c h i p - b a s e d p r o d u c t s (papers and p a n e l s e x c l u d i n g plywood) 198 4.1.2.2 Sawnwood & plywood* • «19 9 4.1.2.3 P o l e s and p o s t s - • • • 201 4.1.2.4 Mangrove p o l e s . . . . 202 4.1.2.5 Fuelwood 2 03 4.2 THE QUALITATIVE REQUIREMENTS 213 4.2.1 Q u a l i t y C h a r a c t e r i s t i c s o f Wood Raw M a t e r i a l o f the F i n a l P r o d u c t s 213 4.2.2 The T e c h n o l o g i c a l N i c h e i n a Changing F i e l d o f Wood U t i l . .. • 218 4.2.3 Q u a l i t a t i v e P r o p e r t i e s o f Some Common Kenyan Woods 227 4.2.4 An E v a l u a t i o n o f Wood P r o p e r t i e s and Commercial A c c e p t a n c e . • • .235 - i x -5. MANAGING FOREST RESOURCES FOR THE INTERMEDIATE AND FINAL MARKETS .243 INTRODUCTION 243 5.1 The Need f o r S e l f - R e l i a n c e i n Wood and Wood P r o d u c t s 2 43 5.2 Management by P l a n V e r s u s C r i s e s . . . . 247 5.3 I n t e g r a t e d P r o d u c t i o n Management and I n d u s t r i a l Development Programmes . . . 251 5.3.1 P r o d u c t i o n 251 5.3.2 Timber S a l e s 257 5.3.3 Supply o f Fuelwood and P o l e s P o l i c y 262 5.3.4 Research & Development 2 63 6. SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS . . 268 6.1 OBSERVATIONS AND CONCLUSIONS 268 6.1.1 Wood S u p p l i e s 2 68 6.1.2 F o r e s t r y Management 271 6.1.3 C o - o r d i n a t i o n o f F o r e s t r y and I n d u s t r y 272 6.1.4 Re s e a r c h , I n f o r m a t i o n and Records 273 6.2 SUMMARY OF RECOMMENDATIONS . . . . . . .27 4 BIBLIOGRAPHY 280 APPENDICES 294 - x -LIST OF TABLES Ta b l e Page 1.1 The human r e s o u r c e s 13 1.2 Kenya's GDP (at c o n s t a n t 1964 p r i c e s ) - c o n t r i b u t i o n o f some s e l e c t e d s e c t o r s . . . 1 8 1.3 Some f e a t u r e s o f Kenya's economic s e t t i n g . . 19 1.4 C a p i t a l f o r m a t i o n ( e x p e n d i t u r e ) 1964 c o n s t , p r i c e s .20 1.5 F o r e s t r y ' s c o n t r i b u t i o n t o t h e monetary economy r e l a t i v e t o some s e l e c t e d s e c t o r s i n Kenya's GDP 27 1.6 Employment i n f o r e s t r y and f o r e s t r y -based i n d u s t r i e s (1974) 28 1.7 R e g r e s s i o n and f u n c t i o n a l e q u a t i o n models used f o r f o r e c a s t i n g f u t u r e consumption o f each wood p r o d u c t 42 2.1a Comparison o f p u b l i s h e d and u n p u b l i s h e d i n t e r n a l d a t a on saw and veneer l o g s a l e s by F o r e s t Department 59 2.1b Trend i n t i m b e r and fuelwood s a l e s by F o r e s t Department 5 9 2.2a Sawnwood consumption by d i f f e r e n t sub markets .61 2.2b P r o p o r t i o n a l d i s t r i b u t i o n by main p r o d u c t s from s a w m i l l (%) 61 2.2c E s t i m a t e s o f s e c t o r i a l sawnwood consumption f o r 1960 and 1967 (000 m3) 61 2.2d E s t i m a t e d sawnwood consumption i n r u r a l h ouseholds 62 - x i -2.3 Sawnwood market l o c a t i o n : p r o p o r t i o n o f wood s u p p l i e d by major p r o d u c i n g a r e a s t o market l o c a t i o n s 63 2.4 Comparison o f sawnwood consumption e s t i m a t e s based on a l t e r n a t i v e p r o j e c t i o n models and compared t o FAO f o r e c a s t s ( m i l l i o n c u b i c metres) 72 2.5 S e c t o r i a l sawnwood consumption f o r e c a s t . . . . 74 2.6 P r o j e c t e d e s t i m a t e d consumption ranges f o r wood-based p a n e l s 83 2.7 S e c t o r i a l d i s t r i b u t i o n o f plywood uses ( i n p e r c e n t a g e s ) 84 2.8 The p r e f e r r e d e q u a t i o n s f o r paper consumption e s t i m a t e s 97 2.9 P r o j e c t e d e s t i m a t e s o f paper consumption range (000 M e t r i c tons) 103 2.10 P r o j e c t e d e s t i m a t e s o f demand f o r p o l e s from r e s e r v e d f o r e s t s 119 2.11 C a t e g o r i e s o f fuelwood consumption a r e a s 124 2.12 Summary o f fuelwood consumption e s t i m a t e s 1975 . 1 2 6 2.13 A summary o f g e o g r a p h i c a l fuelwood consumption p a t t e r n s (1975) 128 2.14 Summary o f p r o j e c t e d fuelwood consumption e s t i m a t e s 1975-2000 131 3.1a C l a s s i f i c a t i o n o f f o r e s t l a n d s 137 3.1b G e o g r a p h i c a l d i s t r i b u t i o n o f t h e f o r e s t l a n d s ( '000 ha.) 137 3.2 G e o g r a p h i c a l d i s t r i b u t i o n o f p l a n t a t i o n f o r e s t s (ha.) by 1976 138 3.3 P l a n t i n g programme 1975-1980 (ha.) 143 3.4 Some i n d i g e n o u s t i m b e r s p e c i e s eof Kenya. . . .150 3.5 FAO's p r o j e c t e d i n d u s t r i a l t i m b e r h a r v e s t from n a t u r a l f o r e s t s compared t o a c t u a l h a r v e s t 152 - x i i -3.6 Volume o f s a l e s o f round l o g s (CU. M e t r e s ) 154 3.7 A n t i c i p a t e d wood h a r v e s t from n a t u r a l f o r e s t s 159 3.8a The h i s t o r i c a l average p l a n t i n g programme . . . . . 1 6 2 3.8b Summary o f sawwood:- and pulpwood c l a s s d i s t r i b u t i o n ( t o t a l a r e a by end o f 1975) . . .163 3.9 Y i e l d from t h i n n i n g s and c l e a r f e l l i n g s f o r P i n e s and Cy p r e s s 172 3.10 A summary o f p o t e n t i a l wood s u p p l i e s from softwood p l a n t a t i o n s . 178 4.1 Some c o n v e r s i o n r e c o v e r y s t u d i e s f o r Kenya s a w m i l l s 185 4.2 P e r c e n t a g e c h a r c o a l y i e l d s and c h a r c o a l p r o p e r t y a n a l y s i s f o r some t r e e s p e c i e s o f Kenya 195 4.3 C h a r c o a l y i e l d w i t h t r a d i t i o n a l e a r t h K i l n f o r some s p e c i e s i n Kenya 195 4.4 C h a r c o a l p r o d u c t i o n u s i n g d i f f e r e n t K i l n s . . 196 4.5 A summary o f fuelwood e q u i v a l e n t s i n Kenya. .19 6 4.6 R e l a t i v e Biomass o f above-ground hardwood t r e e components 205 4.7a E s t i m a t e d a r e a s and volumes o f e x i s t i n g p l a n t a t i o n f uelwood s u p p l i e s 207 4.7b D i s t r i b u t i o n o f F o r e s t Department's e u c a l y p t s p l a n t a t i o n s by F o r e s t D i v i s i o n . . .207 4.8 I n d u s t r i a l wood raw m a t e r i a l b a l a n c e f o r 5 y e a r p e r i o d t o t a l s 212 4.9 Market s i z e - wood q u a l i t y r e l a t i o n s h i p f o r A f r i c a n t r o p i c a l f o r e s t wood p r o d u c t s (saw, veneer and plywood l o g s ) i n 1973 . . . 238 4.10 St a n d a r d s p e c i f i c a t i o n s f o r d o m e s t i c , i n d u s t r i a l and r m e t a l l u r g i c a l f u e l s 239 5.1 S a w m i l l s d i s t r i b u t i o n by c a p a c i t y s i z e and s p e c i e s 253 - x i i i -LIST OF FIGURES AND ILLUSTRATIONS Maps Page 1 Kenya's f o r e s t r e s e r v e s 142 2 L o c a t i o n a l s i t e s o f f o r e s t p l a n t a t i o n s . . . . 142 C h a r t s 1 The c u r r e n t o r g a n i z a t i o n a l s t r u c t u r e o f t h e Kenya F o r e s t Department, 1978 32 2 A c o n c e p t u a l model f o r p r o d u c t i o n management d e c i s i o n - m a k i n g 267 G r a p h s — F i g u r e s 1 P r o j e c t e d e s t i m a t e s o f GDP components 4 0 2 P r o j e c t e d e s t i m a t e s o f p o p u l a t i o n components 40 3 P r o j e c t e d e s t i m a t e s o f GDP per c a p i t a income 41 4 Sawnwood consumption e s t i m a t e s ( c o n s t a n t 1964 p r i c e s ) based on h i g h , medium and low GDP growth r a t e s 68 5 P r o d u c t i o n and consumption o f sawnwood i n Kenya, 1950-1975 69 6 Consumption o f wood-based p a n e l s i n Kenya, 1960-1975 78 7 Plywood consumption p r o j e c t i o n e s t i m a t e s based on d i f f e r e n t f o r e c a s t i n g models 86 8 F i b r e b o a r d and p a r t i c l e b o a r d consumption p r o j e c t i o n e s t i m a t e s based on d i f f e r e n t f o r e c a s t i n g models 87 - x i v -9 Consumption p r o j e c t i o n e s t i m a t e s f o r a l l wood-based p a n e l s (aggregate) based on d i f f e r e n t f o r e c a s t i n g models 88 10 Consumption o f plywood by s e c t o r (1965-1974) 89 11 Consumption o f paper and paperboard i n Kenya 1958-1975 93 12 N e w s p r i n t consumption p r o j e c t i o n e s t i m a t e s based on a l t e r n a t i v e f o r e c a s t i n g models 99 13 P r i n t i n g and w r i t i n g paper, consumption p r o j e c t i o n e s t i m a t e s u s i n g a l t e r n a t i v e f o r e c a s t i n g models 100 14 I n d u s t r i a l paper, consumption p r o j e c t i o n e s t i m a t e s based on a l t e r n a t i v e f o r e c a s t i n g models 101 15 Consumption p r o j e c t i o n e s t i m a t e s f o r a l l papers (aggregates) based on a l t e r n a t i v e f o r e c a s t i n g models 102 16 Comparison o f t r e n d s i n t h e urban b u i l d i n g s e c t o r and demand f o r p o l e s 114 17 Trend i n demand f o r mangrove, p o l e s and p o s t s 115 18 P r o j e c t e d e s t i m a t e s o f demand f o r p o l e s and f e n c e p o s t s from p u b l i c f o r e s t r e s e r v e s based on a l t e r n a t i v e f o r e c a s t i n g models 117 19 P r o j e c t e d demand e s t i m a t e s f o r mangrove p o l e s based on d i f f e r e n t t r e n d f u n c t i o n models 118 20 P r o j e c t e d consumption e s t i m a t e s f o r a l l i n d u s t r i a l wood p r o d u c t s (processed) 134 21 I n d u s t r i a l wood h a r v e s t by wood t y p e 1950-1975 156 - XV -22 P o t e n t i a l p l a n t a t i o n sawnwood s u p p l i e s (a) by t y p e o f h a r v e s t (b) by s p e c i e s and type o f h a r v e s t . . . . 174 23 P o t e n t i a l softwood pulpwood s u p p l i e s - 5-year p e r i o d t o t a l s (a) a l t e r n a t i v e s 1 and 2 (b) s p e c i e s c o m p o s i t i o n and t y p e o f h a r v e s t 179 24 5-year p e r i o d i c r e q u i r e m e n t s and p o t e n t i a l s u p p l i e s f o r d i f f e r e n t wood p r o d u c t s 210 2 5 Common-raw m a t e r i a l , group p r o d u c t , roundwood e q u i v a l e n t r e q u i r e m e n t s and p o t e n t i a l s u p p l i e s - 5-year p e r i o d i c t o t a l s 211 26 S e l e c t e d t e c h n o l o g i c a l i n n o v a t i o n s , i l l u s t r a t i n g t h e e v e r - d e c r e a s i n g time i n t e r v a l between c o n c e p t i o n o f an i d e a and t h e emergence o f commercial p r o d u c t . . . 223 - x v i -LIST OF APPENDIX TABLES Tab l e Page A.1-A.2 I.1-1.12 I I . l - I I . 1 7 I I I . 1 - I I I . 1 0 IV. 1-IV.5 V. 1-V.3 VI . A-VI.B V I . 1-VI.2 V I I . 1-VII.2 V I I I F o r e s t r y S e c t o r i n R e l a t i o n t o the Country's Economy 294 Apparent P r o d u c t i o n and Consumption of F o r e s t P r o d u c t s 297 D e t a i l s o f Demand and Apparent Consumption R e g r e s s i o n A n a l y s i s - C o r r e l a t i o n M a t r i x , R e g r e s s i o n E q u a t i o n s and P r o j e c t i o n E s t i m a t e s f o r the Consumption of F o r e s t P r o d u c t s ( e x c l u d i n g woodfuel) 310 S t a t i s t i c a l A n a l y s i s o f Fuelwood Consumption 356 C u r r e n t F o r e s t Resources 368 P r o j e c t e d E s t i m a t e s o f Wood S u p p l i e s From P l a n t a t i o n s 1976-2030AD. . 374 Management Regimes o f Softwood P l a n t a t i o n F o r e s t s 378 P r o d u c t i v i t y o f Softwood P l a n t a t i o n s 378 P r o j e c t e d E s t i m a t e s o f Raw M a t e r i a l Requirement f o r D i f f e r e n t Wood P r o d u c t s 386 Q u a l i t a t i v e C h a r a c t e r i s t i c s of Tree S p e c i e s Grown i n Kenya 389 - x v i i -ACKNOWLEDGEMENTS I t would be a l e n g t h y p r o c e s s t o n a r r a t e t h e many i n d i v i d u a l s and i n s t i t u t i o n s who g e n e r o u s l y c o n t r i b u t e d and a s s i s t e d i n my r e s e a r c h and subsequent w r i t e - u p o f t h i s s t u d y , a l l o f whom I am g r e a t l y i n d e b t e d . However, my acknowledgement would be i n c o m p l e t e w i t h o u t s i n g l i n g out a few o f t h o s e many who des e r v e s p e c i a l mention. I g r a t e f u l l y acknowledge t h e u s e f u l a d v i c e and a s s i s t a n c e o f my s u p e r v i s o r Dr. D. Haley who g u i d e d my work t h r o u g h o u t t h e s t u d y p r o v i d i n g u s e f u l c r i t i c i s m s and s u g g e s t i o n s . Dr. J.H.G. Smith gave me v e r y u s e f u l guidance and a s s i s t a n c e i n t h i s work f o r wh i c h I am most g r a t e f u l . I thank Dr. P. C o t t e l l and o t h e r members o f my Committee who c o n t r i b u t e d g e n e r o u s l y t o t h e v a l u e and q u a l i t y o f t h i s s t u d y . I w i s h t o thank 0 . Mburu, the C h i e f C o n s e r v a t o r o f F o r e s t s i n Kenya and h i s s t a f f i n the F o r e s t Department e s p e c i a l l y S. Mbinda, J.M. K i i l u and C. Ndegwa. A l l gave me v a l u a b l e a s s i s t a n c e when I v i s i t e d Kenya f o r r e s e a r c h , and made a v a i l a b l e t o me some v e r y u s e f u l i n f o r m a t i o n and d i s c u s s e d v a r i o u s o b s e r v a t i o n s and s u g g e s t i o n s . My c o l l e a g u e and f r i e n d Dr. J . M o y i n i d e s e r v e s s p e c i a l words o f thanks f o r h i s c o n t r i b u t i o n d u r i n g t h e many hours we o f t e n spent i n d i s c u s s i o n s . He was always an a v a i l a b l e s o u r c e of i n f o r m a t i o n and views on f o r e s t r y i n g e n e r a l and E a s t A f r i c a n f o r e s t r y i n p a r t i c u l a r . - x v i i i -J.E.M. A r n o l d , S.L. P r i n g l e and o t h e r F.A.O. s t a f f were a u s e f u l s o u r c e o f i n f o r m a t i o n and l i t e r a t u r e and I am most g r a t e f u l f o r t h e i r a s s i s t a n c e when I v i s i t e d F.A.O. i n Rome d u r i n g my r e s e a r c h . T h i s s t u d y was made p o s s i b l e by a s c h o l a r s h i p p r o v i d e d by t h e Canadian I n t e r n a t i o n a l Development Agency t o t h e Kenyan Government and I am v e r y t h a n k f u l t o b o t h o f them and my many w e l l - w i s h e r s i n Canada and Kenya. Mrs. S y l v i a Chan, Mrs. Mary Shoo and Mrs. J o y Farden s k i l l f u l l y p r o v i d e d s e c r e t a r i a l s e r v i c e w h i c h i s much a p p r e c i a t e d . L a s t but n o t l e a s t , I am most i n d e b t e d t o my w i f e E l i z a b e t h and our c h i l d r e n , J o s s e , W i n n i e , V i c t o r i a and Henry, who s h o u l d e r e d t h e g r e a t burden o f my absence w i t h g r e a t courage and p a t i e n c e . They p r o v i d e d much needed s u p p o r t , l o v e and hope, w i t h o u t w h i c h , t h i s work would have been d i f f i c u l t t o a c c o m p l i s h . To them I s h a l l always be g r a t e f u l . - 1 -CHAPTER I INTRODUCTION, STUDY DESCRIPTION, BACKGROUND AND METHODOLOGY 1.1 INTRODUCTION W i l l i a m Duerr (1975) w r i t i n g on "American F o r e s t Resource Management" had t h i s to say: That people dominate the p r a c t i c e o f f o r e s t resource management, and thus t h a t the s o c i a l s c i e n c e s dominate the study of i t , has not always been obvious t o everyone. When the p r o f e s s i o n of f o r e s t r y was t a k i n g shape i n the U n i t e d S t a t e s , l a t e i n the n i n e t e e n t h century and e a r l y i n the twe n t i e t h century, there was only one p l a c e t o go f o r m a t e r i a l s and precedents: Western Europe, and n o t a b l y Germany where the p r a c t i c e of f o r e s t r y had been underway f o r three hundred years and more. What the new p r o f e s s i o n r e c e i v e d from there was a d o c t r i n e emphasizing the b i o l o g y and en g i n e e r i n g of f o r e s t resource management and f o c u s s i n g on t r e e s , not human beings, on the timber product of the f o r e s t , not on other products.... (emphasis mine) L a t e r he s t a t e d : Resources are man-made. They are c r e a t e d because someone wants something. He has a g o a l and needs the means t o reach i t . . Resources are these means.... Resources are man-made i n the sense t h a t t h e i r value depends upon the context t h a t man p r o v i d e s f o r them. Resources are not c r e a t e d or managed f o r t h e i r own sake, but r a t h e r f o r the p r o v i s i o n of s e r v i c e s to s a t i s f y c e r t a i n human needs. Teeguarden (1975) wrote: The s h i f t i n g aims and context of f o r e s t resource management are a f u n c t i o n of what people want from the f o r e s t s . People p r o v i d e the d i r e c t i o n ; -2 -forests provide the means. Since the aim of forest management is to s a t i s f y consumers -the i n d i v i d u a l , family or firms expressing demand for forest services Who are the consumers? What do they want from forest resources? How do ithey express th e i r wants? What does the forest manager nee'd to know about them?' The consumers are both the f i n a l consumers (consisting of the indi v i d u a l s , the households, firms and i n s t i t u t i o n s using the products and the intermediate -consumers or the processing industries; wanting the services provided by the products; expressing t h e i r wants through t h e i r demand and consumption of the products and services provided by the products. What the forest resource manager needs to know i s about the consumer - the market for his products and services. The forest industries (intermediate consumers) are the immediate market for the forest managers' product and thus the managers'need to understand this market: such as i n d u s t r i a l consumer's technology (the type of equipment and machinery the industry uses to extract and process wood),, which influences the sizes, shape, hardness and other features of wood the firm (market) prefers for consumption. The intermediate as well as the f i n a l consumers weigh not only the physical a v a i l a b i l i t y of the products and services but also t h e i r net u t i l i t y - the s a t i s f a c t i o n of the consumers' fjeeds that services of the products can provide, since consumption is not an end i n i t s e l f . The forest manager needs to know the size of the market for which he i s producing - expected size of the industry (or industries),the population that w i l l consume - 3 -the f o r e s t p r o d u c t s and how much each market segment w i l l r e q u i r e . Thus the market ( i n t e r m e d i a t e and f i n a l consumers, t h e i r l o c a t i o n d i s t r i b u t i o n , s e g m e n t a t i o n and s i z e s ) i s and s h o u l d be the c e n t r a l focus i n r e s o u r c e p r o d u c t i o n and management d e c i s i o n s . S i l . v e r s i d e s (1973) a d d r e s s i n g a UNECE/FAO symposium on ' C o - o r d i n a t i o n between F o r e s t r y and the wood u s i n g i n d u s t r i e s ' s i n g l e d out the major problem o f f o r e s t e r s as the knowledge t h a t they are t r e a t i n g s t a n d s to f a v o u r s p e c i e s and i n d i v i d u a l t r e e s w i t h o u t the knowledge as to how they w i l l be u t i l i z e d o r f o r what p r o d u c t s when they matured and c a u t i o n e d t h a t t h e r e i s no way contemporary s i l v i c u l t u r e can be s e p a r a t e d from f u t u r e u t i l i z a t i o n . On the same theme, M a y d e l l (1973) a d v i s e d t h a t c o - o r d i n a t i o n o f i n d u s t r i e s ' r e q u i r e m e n t s w i t h the p r i n c i p l e s and p o t e n t i a l s o f f o r e s t management s h o u l d be a c h i e v e d by l o n g - t e r m programmes d e v e l o p e d j o i n t l y by i n d u s t r y and f o r e s t owners (of a l l c a t e g o r i e s i n b o t h c a s e s ) . S i m i l a r l y , K i n g (1974) w h i l e a d d r e s s i n g the Tenth Commonwealth F o r e s t r y Conference c a u t i o n e d t h a t f o r e s t p o l i c i e s (and programmes) s h o u l d not be f o r m u l a t e d i n vacuo but r a t h e r s h o u l d be an i n t e g r a l p a r t o f the s o c i o - e c o n o m i c development of a n a t i o n : ' f o r e s t s and t r e e s are not the o n l y c o n s i d e r a t i o n s . ' Kenya's F o r e s t P o l i c y , S e s s i o n a l Paper No 1 (1968), under " R e s e r v a t i o n P o l i c y " , s t a t e s t h a t the Government i s d e t e r m i n e d t o : ' r e s e r v e i n p e r p e t u i t y the e x i s t i n g f o r e s t s and wherever p o s s i b l e add t o t h e n so as t o p r o v i d e s u f f i c i e n t l a n d i n o r d e r : (among o t h e r t h i n g s ) t o p r o v i d e f o r the needs of the c o u n t r y i n t i m b e r and o t h e r f o r e s t p r o d u c t s adequate t o meet the r e q u i r e m e n t s o f the community under a f u l l y d eveloped n a t i o n a l economy and t o p r o v i d e t h e - 4 -greatest possible surplus of those products for export. Thus Kenya's Policy i s one of s e l f - r e l i a n c e (not s e l f sufficiency) in forest products. How consistent are the production management programmes and their implementation with the po l i c y objectives? Are they s u f f i c i e n t tools and means to adequately meet the community's requirements i n wood products and to provide a s u r p l u s r f o r export? - 5 -1.. 2 STUDY DESCRIPTION 1.2.1 Problem d e f i n i t i o n and h y p o t h e s i s Wood-based p r o d u c t s have a major r o l e t o p l a y i n the w e l f a r e o f any s o c i e t y , p r o v i d i n g a m u l t i t u d e o f n e c e s s i t i e s i n form o f houses f o r s h e l t e r , f u r n i t u r e , c o n s t r u c t i n g v a r i o u s types o f s t r u c t u r e s ; paper f o r e d u c a t i o n a l needs, communication and a d m i n i s t r a t i v e p u r p o s e s , wrapping and p a c k a g i n g o f f o o d and o t h e r i t e m s ; and as a sour c e o f energy. Wood i s a n e c e s s i t y t h a t e n t e r s e v e r y sphere o f s o c i e t y ' s needs, and one t h a t s o c i e t y can h a r d l y do w i t h o u t . Wood t a k e s a c o n s i d e r a b l y l o n g time t o produce, w i t h the p r o d u c t i o n p r o c e s s r u n n i n g i n t o s e v e r a l decades. U n l e s s p r o d u c t i o n i s i n s t a n t a n e o u s , the q u a n t i t i e s o f f e r e d on the market a t a g i v e n time must come from s t o c k s r a t h e r than from p r o d u c t i o n u n d e r t a k e n i n the l i g h t o f p r e s e n t demand ( L e s l i e 1971). Thus what we a r e p r o d u c i n g now or p l a n t o produce i s the p o t e n t i a l s u p p l y i n t e n d e d to meet the needs and r e q u i r e m e n t s of the s o c i e t y a t a f u t u r e d a t e . I f c u r r e n t p r o d u c t i o n i s i n s u f f i c i e n t t o meet the r e q u i r e m e n t a t t h a t f u t u r e d a t e , t h e r e w i l l be v e r y l i t t l e t h a t c o u l d be done then t o c o r r e c t the d e f i c i e n c i e s / ( t h i s does not mean t h a t some d e f i c i e n c i e s cannot be c o r r e c t e d w i t h i m p o r t e d p r o d u c t s i n the absence o f c o n s t r a i n t s ) . The q u e s t i o n i s . whether the p r o d u c t i o n programme i s  qonsds^tent w i t h the l i k e l y needs and r e q u i r e m e n t at some t a r g e t  f u t u r e , b o t h q u a n t i t a t i v e l y and q u a l i t a t i v e l y ~ L e s l i e (1971) c o r r e c t l y s t a t e d : The e x i s t e n c e o f demand ( f o r wood p r o d u c t s ) or the b e l i e f t h a t a demand f o r them can be c r e a t e d or w i l l d e v e l o p i s the m o t i v a t i n g f o r c e f o r f o r e s t r y and the f o r e s t i n d u s t r i e s . -Clawson (1975) w r i t i n g on f o r e s t management and f o r e s t r y p o l i c i e s f o c u s e d on the q u e s t i o n t h a t many f o r e s t r y p l a n n e r s and f o r e s t managers o v e r l o o k o r t a k e f o r g r a n t e d as b e i n g i m p l i e d " F o r e s t s f o r whom and f o r what?", u s i n g i t as the t i t l e f o r h i s book. I f the d i c t a t e s o f the market a r e the m o t i v a t i n g f o r c e i n p r o d u c t i o n , then markets and m a r k e t i n g ought t o be viewed not as the end o f the p r o d u c t i o n p r o c e s s but r a t h e r the b a s i s o f p r o d u c t i o n p l a n n i n g and management. l . ' 2 - . l . l The Problem The problem can be b r i e f l y s t a t e d as one o f r e c o n c i l i n g Kenya's - wood p r o d u c t i o n management w i t h the re q u i r e m e n t e x p e c t a t i o n s o f the t a r g e t market ( s ) . T h i s stems from the q u e s t i o n as to whether Kenya's c u r r e n t and p l a n n e d wood r e s o u r c e s p r o d u c t i o n programmes and management p r a c t i c e s are geared towards s p e c i f i c market t a r g e t s w i t h r e g a r d t o the i a t t e r ' s q u a n t i t a t i v e and q u a l i t a t i v e r e q u i r e m e n t s ; o r whether the o b j e c t i v e i s p r o d u c t i o n o f wood per, se w i t h the b e l i e f t h a t markets might e x i s t and i f n o t , t h e y c o u l d be c r e a t e d . Do f o r e s t r y p l a n n e r s , f o r e s t managers and a d m i n i s t r a t o r s address themselves t o t h e i m p o r t a n t q u e s t i o n r a i s e d by Clawson (1975) among o t h e r s on p r o d u c t i o n o b j e c t i v i t y ? 1.2.1.2 H y p o t h e s i s ( i ) I t i s h y p o t h e s i s e d t h a t wood p r o d u c t i o n management i n Kenya l a c k s market o r i e n t a t i o n ; t h a t c u r r e n t wood p r o d u c t i o n p o l i c i e s , programmes, and management p r a c t i c e s are de s i g n e d f o r the p r o d u c t i o n o f wood as a commodity w i t h no s p e c i f i c t a r g e t m a r k e t s . 7 ( i i ) I t i s f u r t h e r h y p o t h e s i s e d t h a t the absence of market o b j e c t i v i t y i n p r o d u c t i o n management w i l l i n f u t u r e l e a d t o : (a) problems o f wood raw m a t e r i a l s h o r t a g e s f o r some wood p r o d u c t s and p r o b a b l e o v e r s u p p l y f o r o t h e r s , and (b) u t i l i z a t i o n and m a r k e t i n g problems at b o t h i n d u s t r i a l and f i n a l consumer s t a g e s due t o the i n a p p r o p r i a t e n e s s o f raw wood m a t e r i a l o f f e r e d t o the market. I n e f f e c t , raw m a t e r i a l s u p p l y w i l l c o n s t r a i n the development o r growth o f some wood-based p r o d u c t s ' i n d u s t r i e s . 1. 2. 2 ,Study o b j e c t i v e s : The s t u d y has t h r e e o b j e c t i v e s : (1) To i d e n t i f y and a n a l y s e markets f o r wood p r o d u c t s and the f u t u r e wood raw m a t e r i a l r e q u i r e m e n t s f o r t h e s e markets (2) To e v a l u a t e the c o m p a t i b i l i t y and c o n s i s t e n c y (or o t h e r w i s e ) o f f u t u r e markets' r e q u i r e m e n t s w i t h c u r r e n t and p l a n n e d ivood raw m a t e r i a l p r o d u c t i o n w i t h r e s p e c t t o wood q u a n t i t i e s and q u a l i t i e s (3) From c o n c l u s i o n s drawn from (1) and ( 2 ) , make s u g g e s t i o n s on a l t e r n a t i v e ways o f r e c o n c i l i n g i n ; c o n s i s t e n c i e s t h a t may have been i d e n t i f i e d between wood ma r k e t s ' r e q u i r e m e n t s and p r i m a r y wood p r o d u c t i o n programmes and s t r a t e g i e s . A secondary o b j e c t i v e o f t h i s s t u d y i s to c r e a t e an i n t e r e s t among p r e s e n t and f u t u r e f o r e s t p l a n n e r s , managers, mar k e t e r s and r e s e a r c h e r s i n the q u e s t i o n o f i n t e r n - r e l a t i o n s h i p of f o r e s t r y and f o r e s t p r o d u c t s management t o u t i l i z a t i o n and m a r k e t i n g ; the n e c e s s i t y o f ' i n t e g r a t e d system'Pr°blem approach. 1.2.3 Scope o f t h e Study: The market a n a l y s i s c o v e r s a l l major f o r e s t p r o d u c t s - 8 > c u r r e n t l y used i n Kenya namely sawnwood, plywood, f i b r e b o a r d and p a r t i c l e b o a r d > paper p r o d u c t s ( n e w s p r i n t , w a i t i n g and p r i n t i n g papers and i n d u s t r i a l p a p e r s ) , t r a n s m i s s i o n and b u i l d i n g p o l e s and f e n c e p o s t s , mangrove p o l e s and f u e l w o o d ( f i r e w o o d and c h a r c o a l ) . P r o j e c t i o n and a n a l y s i s o f f u t u r e s p e c i f i c f o r e s t p r o d u c t ' s market r e q u i r e m e n t s are based on an a n a l y s i s o f t h e s e markets d u r i n g the p e r i o d o f Kenya's n a t i o n h o o d , c o v e r i n g the p e r i o d 1960-1975 ( i n t e r n a l s e l f government was a t t a i n e d on June 2, 1963). A n a l y s i s o f f u t u r e wood r e q u i r e m e n t s c o v e r s a span of 50 y e a r s (1980-2030) which i s r o u g h l y two sawwood r o t a t i o n s f o r the f a s t growing s p e c i e s i n Kenya. F i f t y y e a r s may seem too l o n g a time over which to make a c c u r a t e f o r c a s t s , however, the r a t i o n a l e o f the c h o i c e o f such a time span can be a p p r e c i a t e d on the r e a l i s a t i o n t h a t some o f the hardwoods to be used f o r the manufacture of p r o d u c t s such as plywood or sawnwood t a k e 50 y e a r s or more t o mature even under Kenya's f a v o u r a b l e growing c o n d i t i o n s . Thus, some t r e e s from c u r r e n t hardwood p l a n t i n g programmes w i l l be ready f o r h a r v e s t t h e n . P r o d u c t i o n e r r o r s made now w i l l be u t i l i z a t i o n and market problems 50 y e a r s from now. For t h e s h o r t e r r o t a t i o n s p e c i e s such as the e x o t i c softwoods (25-30 y e a r s ) , a two r o t a t i o n f o r e s i g h t i n p l a n n i n g g i v e s f l e x i b i l i t y i n c h o i c e o f a l t e r n a t i v e s i n p l a n n i n g r e s o u r c e i n p u t s ( l a n d , c a p i t a l and human r e s o u r c e s ) . T h i s a l s o a l l o w s f o r p l a n n i n g f u t u r e i n d u s t r i a l s t r a t e g i e s . The s t u d y a l s o c o v e r s the c u r r e n t f o r e s t r e s o u r c e s i n the p r o d u c t i o n p i p e l i n e and p l a n n e d p r o d u c t i o n programmes as the b a s i s o f f u t u r e p o t e n t i a l s u p p l i e s , f o r b oth man-made and n a t u r a l f o r e s t s . - 9 '--This study starts with a b r i e f description of the country, i t s geography, human resources and the economy as a background setting on which the forest products' market w i l l operate and whose needs and challeges forests w i l l be expected to meet. .1V3 BACKGROUND INFORMATION 1 • 31.1 Some Salient F e a t u r e s The following i s a b r i e f description of the country, i t s economy, people and other natural resources, a background on which the forestry sector under study operates as a component of the whole system. 1.3:71/1 Geography Kenya, although ir. the e q u i t o r i a l zone of A f r i c a , stretching approximately 4 degrees on either side of the equator, does not have a t r u l y t r o p i c a l climate. The r e l i e f , r i s i n g from sea-level on the east coast, through a series of plateaux to the central highlands at approximately 4000 metres above sea l e v e l before r o l l i n g gradually to the Lake V i c t o r i a basin, provides varied elevation gradients that greatly modify,the climate and vegetation. The R i f t Valley which bisects the central highlands from north to south drops at places.to as low as 500 metres above ;sea:  l e v e l . The highlands are characterised by modified t r o p i c a l -type of forest vegetation ranging from evergreen and deciduous forests on the lower elevations to mixtures of coniferous, broadleaved and bamboo forests on the higher elevations. The Mau and Nyandarua ranges (3,100M and 4,000M respectively) on either side of the R i f t Valley, Mt. Kenya (5200M) and Mt. Elgon (4310) are r i c h with coniferous forests composed l a r g e l y of P e n c i l cedar (Juniperusprocera) and podo (Podocarpus g r a c i l i o r and P. m i l l a n j i a n u s ) . S e m i - t r o p i c a l evergreen and deciduous f o r e s t s e x i s t on the humid east c o a s t a l and western (Kakamega) lowland b a s i n s . The v e g e t a t i o n i n the r e s t o f the coun t r y ranges from Savannah woodlands on the e a s t e r n , R i f t V a l l e y and Western p l a t e a u x t o almost t r e e - l e s s s e m i - a r i d and a r i d areas of n o r t h - e a s t e r n and no r t h e r n Kenya. Temperatures s i m i l a r l y v a r y w i t h e l e v a t i o n w i t h temperatures d e c r e a s i n g from the hot and humid lowlands, and hot dry no r t h e r n r e g i o n t o the c h i l l y c e n t r a l h i g h l a n d s . These temperature changes i n r e l a t i o n t o e l e v a t i o n are best d e s c r i b e d by r e g r e -s s i o n equations f o r East A f r i c a which a c c o r d i n g to G r i f f i t h s (1962) are of the o r d e r : Maximum (mean annual) Temperature = 34 -0.55 Height Minimum ( " ) = 24.5-0.69 Height where temperatures are i n degrees C e l s i u s and h e i g h t s i n metres above s e a l e v e l . R a i n f a l l i s normally i n two seasons w i t h the 'long r a i n s season 1 being M a r c h / A p r i l t o June/July and the 'sh o r t e r r a i n s season 1 being September t o October/November. Area d i s t r i b u t i o n of r a i n f a l i s approximately 72 per cent ( l e s s than 510mm), 13 per cent (510-760mm), 12 per cent (760-1270mm) and 3 per cent (more than 127 0mm). The topography and s o i l s are r e s u l t s o f p a s t v o l c a n i c a c t i v i t i e s , a f t e r which prolonged weathering and l e a c h i n g developed the red, w e l l d r a i n e d and deep l a t e r i t i c s o i l s of the plateaux and hi g h l a n d s . In the lowlands, a l l u v i a l s o i l s o f the m o n t m o r i l o n i t i c types have developed. through accumulation forming s t i c k y p o o r l y d r a i n e d c l a y s . Kenyas' geography i s w e l l covered i n Morgan (1972). 1.3.1.2 The People: The population of Kenya i s estimated to be over 14 million,with an annual growth rate of 3-3.5 per cent. " . Nation-wide census i n 1962 and 1969 estimated the population at 8.636 m i l l i o n and 10.943 m i l l i o n respectively. Out of the t o t a l , urban population was estimated at 0.622 m i l l i o n i n 1962 and 0.999 m i l l i o n i n 1969. Annual estimates by the''Central Bureau of S t a t i s t i c s indicate populations of 13.399 m i l l i o n i n 1975 and 13.847 m i l l i o n i n 1976. A National Integrated Sample Survey estimated urban population at 1.734 m i l l i o n i n 1975 with 11.536 m i l l i o n people i n the r u r a l areas 1. The average household was estimated at 5.5 person for the r u r a l , and 4 persons for the urban populations Estimates of population growth rates d i f f e r conside-rably, ranging from less than 3 per cent to as high as 3.5 per cent annually; Baker (1972), 2.8 per cent, FAO (1970) 3.0 per cent, World Bank (1975) 3.5 per cent, World Bank (1978) 3.3 per cent during 1960-1976 and 3.5 per cent during 1970-1976. Central Bureau of S t a t i s t i c s (1975) indicate an average of 3.3 per cent, but varying between 3 and 3.5 per cent since 1969. 1. The survey excluded 4 of the most t h i n l y populated d i s t r i c t s of Turkana, Samburu, Marsabit and I s i o l o in addition to the North Eastern Province. Adjustments to cover these areas give estimates of 1.657 m i l l i o n (urban) and 12.186 m i l l i o n (rural) Appendix IIT, Table 2. 12 -Growth rate for the urban p o p u l a t i o n i s estimated to Vary 2 between 7 and 8 per cent annually. The high urban growth rates are mainly due to urban migration from r u r a l areas. Approximately 77 per cent of the population l i v e s on roughly 25 per cent of the land (more than 60 people per sq.km.) where r a i n f a l l i s i n excess of 1000mm per annum. Areas of heavy concentration are the Central, Western and Nyanza Provinces, the coastal b e l t and central parts of R i f t Valley Province with densities of 250-1500 persons per sq.km. By 1969, about 58.5 per cent of the population was aged less than 20 years and only 2.8 per cent of the t o t a l popula-ti o n had been educated up to or above secondary school l e v e l . During the period 1965-1974, enrolment i n schools and colleges were more than doubled from about 1.1 m i l l i o n to about 2.9 m i l l i o n while University enrollment increased from 1,000 to 6', 3 00. The nature., of the human resources i s depicted in Table 1.1. 2. The term 'urban' r e f e r s to towns of 2,000 or more people (Blacker, 1972; World Bank, 1975). Table 1.1 The Human resources CD P o p u l a t i o n s t r u c t u r e (1960 census) m i l l i o n Age (yrs) 0-9 10-14 15-19 20-24 25-29 30-39 40-49 50 + T o t a l Q i-T o t a l 3.903 1.3S8 1.107 0.882 0.756 1.094 0.729 1.084 10.943 Secondary education - 0.002 0.070 0.092 0.041 0.036 0.015 0.010 0.268 Post-Secondary education 1- - 0.001 | 0.008 0.008 0.010 0.005 0.006 0.038 ( i i ) Education enrolment (000) Primary Secondary Teacher t r a i n i n g T e c h n i c a l T o t a l U n i v e r s i t y of '' ' E." A f r i c a 1965 •1,014.7 48.0 5.4 1.2 1,069.3 1.0 1974 2,734.4 195. 7 8.9 3.7 2,942.6 6.3 ( i i i ) Employment (000) A g r i c . and Mining Manu-f a c t u -r i n g E l e c t r i -c i t y and water Const-r u c t i o n Trade Transp.. and F i n a n c i a l I n s t i t u -Community S o c i a l F o r e s t r y Comm.• t i o n Services 1972 246*9 3.2 84.8 5.1 37.6 47.6 45.3 17.5 231.8 197^ 261.1 3.9 101.3 5.7 44.4 57. 0 46.3 21.9 j 284.6 T o t a l employment: 1972 719.8 1974 826.3 Source: S t a t i s t i c a l A b s t r a c t (1975) 1.3:1^3 Economic S e t t i n g : The economy b e i n g p r e d o m i n a n t l y a g r i c u l t u r a l - b a s e d and p o o r l y endowed w i t h m i n e r a l r e s o u r c e s o f major economic s i g n i f i c a n c e , the m a n u f a c t u r i n g and commerce s e c t o r s a r e sub s e q u e r i t l y t o a l a r g e e x t e n t a g r o - o r i e n t e d (see T a b l e 1 . 3 ( b ) . A g r i c u l t u r e c o n t r i b u t e s an approximate t o t a l o f 34 pe r cent o f the GDP, o f which 19 per cen t i s i n the non-monetary s e c t o r and 15 per cen t i n the monetary s e c t o r . Other i m p o r t a n t s e c t o r s o f the economy are m a n u f a c t u r i n g (12 p e r c e n t ) , w h o l e s a l e and r e t a i l t r a d e (8 p e r c e n t ) , t r a n s p o r t , i n c l u d i n g s t o r a g e and communi-c a t i o n (8 per c e n t ) . D e s p i t e an i m p r e s s i v e growth t r e n d i n the a g r i c u l t u r a l s e c t o r , i t s r e l a t i v e c o n t r i b u t i o n has d e c l i n e d d u r i n g the p e r i o d 1964 to 1974 from 38.4 p e r cen t t o 31.9 per cent w h i l e t h a t o f m a n u f a c t u r i n g i n c r e a s e d from 10.4 p e r cen t t o 12.5 p e r c e n t . D u r i n g t h e same p e r i o d , the r e l a t i v e c o n t r i b u t i o n t o GDP from non-monetary s e c t o r d e c l i n e d from 27.0 per cen t to 21.0 per c e n t . The t o t a l GDP grew at an average r a t e o f 7 per cen t d u r i n g the decade 1964-1974 a t c o n s t a n t 1964 p r i c e s . World Bank (1978) e s t i m a t e d a GNP a t US$3,460 m i l l i o n a t market p r i c e s and GNP p e r c a p i t a a t US$250 f o r 1976 and US$270 f o r 1977 i n r e a l terms 1. T a b l e 1.2 shows the performance o f the major s e c t o r s . 1. US$ - Approx. KSh. 8 o r K£ 0 .4 - 15 Since Independence, Kenya's economic philosophy and p o l i c y have been based on the concept of a mixed economy as documented i n S e s s i o n a l Paper No. 10 o f (l965). The World Bank (1975) made a d e t a i l e d a n a l y s i s and e v a l u a t i o n of Kenya's economy during the past decade as b a s i s of f u t u r e developmental s t r a t e g y , i d e n t i f y i n g three areas as the ones on which the economic development s t r a t e g y concentrated namely; ( i ) to achieve f a s t o v e r a l l growth r a t e , ( i i ) designs to ensure e q u i t a b l e d i s t r i b u t i o n of development b e n e f i t s and ( i i i ) to ensure r a p i d 1 K e n y a n i -z a t i o n of the economy. S a v i n g performance has been on the average 19-20 per cent of GNP w i t h a household Saving-Income r a t i o of about 10 per cent. Investment has s i m i l a r l y been impressive during the f i r s t decade: of Independence. (See Table 1.4 and Appendix A, Table 2) A g r i c u l t u r a l Sector: Since independence, there have been ambitious and s u c c e s s f u l programmes to transform a g r i c u l t u r e from subsistence to market—oriented farming through co-operative settlement and a g r i c u l t u r a l c r e d i t schemes. The major a g r i c u l t u r a l products are given i n Table 1.3 These products accounted f o r approximately 77 per cent of a l l a g r i c u l t u r a l products i n 1974. Mining Sector: Major mineral resources are e i t h e r non-existent or c u r r e n t l y undiscovered. In 1973, the value of mineral s a l e s was only K^ 3.5 m i l l i o n of which: soda a s h , f l u o r s p a r , s a l t and lime were the more important (see Table 1.3a).Mining c o n t r i b u t e s only 0.6 per cent of the GDP. - 16 -Manufacturing: The manufacturing sector consists mainly of l i g h t agro-^-industries dealing i n chemicals, foods and beverages, t e x t i l e s and various a g r i c u l t u r a l products and machinery. Food-based industries account for approximately 40 per cent of t o t a l gross output of the i n d u s t r i a l sector while wood and wood products-based industries account for about 7 per cent. Table 1.3b shows the major manufacturing industries. The In d u s t r i a l Development Bank, the I n d u s t r i a l and Commercial Development Corporation (ICDC) with other f i n a n c i a l i n s t i t u -tions finance (or undertake j o i n t l y with entrepreneurs) i n d u s t r i a l projects. Energy: Mombasa Refineries, with yearly throughput capacity of 3.33 b i l l i o n l i t r e s (1974) processes imported crude o i l . I n s t a l l e d e l e c t r i c i t y capacity i n 1974 was approximately 266 megawatts of which 13 2 megawatts was thermal and 134 megawatts hy d r o - e l e c t r i c i t y . In 1974, about 27 per cent of the e l e c t r i c i t y was imported from Uganda. Several high power hydro-electric projects are i n progress,the most notable one being the Seven Falks Scheme on Tana River. Several geo-thermal projects are currently being undertaken i n the R i f t Valley area. Woodfuel remains the dominant form of energy i n the r u r a l areas, used as either charcoal or firewood. It i s estimated that 15-16 mi l l i o n ' —,cubic metres of wood are being used annually as f u e l energy. Communication: The country has a r e l a t i v e l y well developed transportation system. The railways cover 7,200 km, traversing the country from Mombasa on the east coast to the western border. A few other l i n e s connect the main railway l i n e with a l l the - 17 a g r i c u l t u r a l l y h i g h p o t e n t i a l a r e a s . An a l l - w e a t h e r - r o a d network c o v e r s 52,000 km (1974). A p a r t from the i n t e r n a l r oad network, a l l of Kenya's f i v e n e i g h b o u r s are connected t o the c o u n t r y by highways. E x t e r n a l communication network c o n s i s t s o f the Longonot Te l e c o m m u n i c a t i o n S a t e l l i t e , Jomo K e n y a t t a I n t e r n a t i o n a l A i r p o r t ( N a i r o b i ) , Mombasa A i r p o r t and Mombasa P o r t . Telephone, r a d i o and t e l e v i s i o n s e r v i c e s a l s o s e r v e f o r b o t h i n t e r n a l and e x t e r n a l communication. Table 1.2: Kenya's GDP (at constant 1964 p r i c e s ) - c o n t r i b u t i o n of some s e l e c t e d s e c t o r s . Year 1 964 1 PfiS . 1970 1971 1Q77 1 9 7 3 1974-T o t a l GDP (K^. m i l l i o n ) 330.10 427.28 454.72 485.09 512.37 547.38 585.92 607.2 2 GDP Der c a p i t a (Kfc.) 36.26 41.85 41.56 43.22 43.90 45.36 46.94 47.03 * * F o r e s t r y 3.87 4.77 5.14 5.54 5.85 6.22 6.92 7.01 (percentage) 1.2 1.1 1.2 1.1 1.1 1.1 1.2 1.2 A g r i c u l t u r e 129.95 154.42 166.41 172.59 175.85 189.47 191.27 193.40 (percentage) 38.50 36.1 19.34 36.6 21.34 35.6 23.94 34.3 25.77 5.0 34.6 29.70 5.4 32.6 31.9 Education 11.20 (percentage 3.4 4.5 4.7 4.9 Manufacturing and Repairs 34.17 44.56 48.59 52.49 59.29 63.61 70.78 76.11 (percentage) 10.4 10.4 10.7 10.8 11.6 11.6 12.1 12.5 Transport and Communication 24.52 38.10 38.57 41.18 43.12 42.43 45.21 42.05 (percentage) 7.4 8.9 19.26 8.5 20.97 8.5 21.60 8.4 23.91 4.7 • 7.8 26.38 4.8 7.7 . 7,9 P u b l i c A d m i n i s t r a t i o n 16.84 (percentage) 5.1 4.5 4.6 4*5 Mining and Quarrying 1.46 2.24 2.01 2.60 2.72 2.50 3.60 3.42 (percentage) 0.4 0.5 0.4 0.5 0.5 0.5 0.6 0.6 * * B u i l d i n g / C o n s t r u c t i o n Dwelling + Ownership: N-monetary (percentage) teclnTage 11.34 (3.5) 13.38 (3.1) 13.88 (3.1) fi:5} 14.41 (2.9) 29.92 C&.27 14.99 (2.9) 15.69 (2.8) 16.48 (2.8) 17.12 (2.8) Source:(Kenya) S t a t i s t i c a l A b s t r a c t (1975) - 19 -1970 1975 Table 1.3: Some f e a t u r e s of Kenya's economic s e t t i n g . (a) Gross value o f major marketed p r o d u c t s . ( K ^ m i l l i o n ) (i) A g r i c u l t u r a l : Coffee Tea S i s a l Beef j j a i r y Maize Wheat ^ g a r P y " t h -Prod. — cane rum 21.8 13.8 1.7 13.3 6.8 2.8 5.0 3.5 1.5 27.4 21.3 10.8 18.3 8.7 17.2 9.1 8.7 4.7 T o t a l A g r i c , L i v e s t o c k 85.4 150.0 1965 1973 ( i i ) Mining: Soda ash 0.9 2.1 F l o u r s p a r S a l t Lime Magnetite 0.3 0.4 0.3 0.1 0.2 0.1 T o t a l Mining 2.4 3.5 (b) Manufacturing: Gross output of the major m a n u f a c t u r i n g j n d u s t r i e s ( 1 g m i l l i o n ) M i s c e l l a n e o u s foods B a s i c Ind. chemicals and Petroleum Meat and d a i r y products Metal products S p i r i t s , beer, malt and tobacco G r a i n m i l l products T e x t i l e s Bakery p r o d u c t s , sugar and c o n f e c t i o n e r y P a i n t s soap and vegetable o i l s Footwear, c l o t h i n g and made-up t e x t i l e s Cement E l e c t r i c a l machinery Paper and paper products Leather and rubber products M i s c e l l a n e o u s chemicals *Sawn timber ( i n c l . f u r n i t u r e and f i x t u r e s ) P r i n t i n g and p u b l i s h i n g *Sawn timber ( e x c l . f u r n i t u r e and f i x t u r e s ) 1968 1973 11.1 5TT2" 13.4 29.6 14.5 26.5 6.8 21.8 9.3 17.8 7.6 15.3 6.9 14.7 6.8 14.3 4.3 14.3 4.8 11.3 4.9 9.5 3.8 8.4 3.9 7.8 1.5 7.3 2.7 7.2 3.4 7.3 3.0 6.9 2.3 5.1 1964 1974 Road net work (Km) Railway (Kirf E l e c t r i c i t y Petroleum ov Bitumen E a r t h / g r a v e l 6,558(1960) 7,191 I n s t a l - S a l e s l a t i o n B i l l i o n L i t r 1,811 4,022 40,135 48,284 2.36(1969) 3.14 (mw) M.Kwh 100.0S8 266.013 517.99 1,095.62 Source: S t a t i s t i c a l A b s t r a c t (1975) Table 1.4; C a p i t a l formation (« expenditure) 1964 const, p r i c e s . A l l s e c t o r s (K£million) 1964 1968 1969 1970 1971 1972 1973 1974 44.32 77.38 79.71 95.52 113.78 109.37 108.73 99.34 F o r e s t r y 0.22 0.21 0.13 0.16 0.24 0.18 0.16 0.27 (percentage) 0.50 0.27 0.16 0.17 0.21 0.16 0.15 0.27 A g r i c u l t u r e 7.54 11.00 10.93 12.48 11.76 11.33 10.48 12.33 (percentage) 17.01 14.22 13.71 13.07 10.34 10.36 9.64 12.41 Education 0.51 2.19 2.14 1.51 1.42 2.42 2.36 2.06 (percentage) 1.15 2.83 2.68 1.58 1.25 2.21 2.17 2.07 Manufacturing and Repairs 5.82 10.87 8.42 12.31 15.60 19.96 18.88 13.82 (percentage) 13.13 14.05 10.56 12.89 13.71 18.25 17.36 13.91 Transp. and Communication 10.26 14.89 15.14 18.47 23.04 15.10 16.44 17.41 (percentage) 23.15 19.24 18.99 19.34 20.25 13.81 15.12 17.53 P u b l i c A d m i n i s t r a t i o n 0.86 1.67 1.82 2.18 2.74 3.19 2.89 2.14 (percentage) 1.94 2.16 2.28 2.28 2.41 2.92 2.66 2.15 Mining and Quarrying 0.26 0.45 0.59 1.24 1.71 0.98 0.87 1.54 (percentage) 0.59 0.58 0.74 1.30 1.50 0.90 0.80 1.55 Source: ( K e n y a ) S t a t i s t i c a l A b s t r a c t - 1975. 2 1 1.3.2 Forestry Sector i n the National Economy; 1.3.2.1 An h i s t o r i c a l background: Forestry as an organised economic sector came into being, or rather was so recognized, i n Kenya with the creation of the Kenya Forest Department i n 1902 (Honore* 1962). This had the twin objectives of f i r s t l y protecting and conserving important catchment areas and secondly regulating the "exploitation" of the timber Resources i n a more systematic manner. This does not necessarily mean that before then forests did not play an important economic r o l e . They provided fuelwood, building materials and wood crafted into implements and household furniture and other equipments, and werethus the basis of the peoples' economic l i f e s t y l e . In addition, wooded lands, such as grazing, hunting and water catchment areas, were respected and protected i n t r a d i t i o n a l laws of the people as communal property and were not i n d i s c r i -minately destroyed through c u l t i v a t i o n as Honore' (1962) would make us believe. Most f o r e s t s and7!wooded g r o v e s were sacred. Large-scale destruction of forests actually started with c o l o n i a l , settlement as new s e t t l e r s cleared large forest areas, e s p e c i a l l y i n the then white highlands, for large scale farming. Some- evidence i s contained i n large stumps whose existence has survived over 70 years of farming i n these settlement areas. With European settlement and the coming of the railway the demand for wood reached high proportions, wood demanded for building i n new towns and squatter v i l l a g e s as well as fue l for the railway. A l l resulted i n extensive and i n d i s c r i -minate forest exploitation and subsequent destruction - hence 22 the need f o r c o n t r o l by the then c o l o n i a l government. Around 1895 the f i r s t Eucalypt stands ( e x o t i c to Kenya) were planted to supplement r a i l w a y fuelwood s u p p l i e s and i n 1902, the f i r s t sawmill was set up i n the eastern Aberdares (Nya-ndarua). Before then, lumber w a s . e i t h e r hewn or p i t - s a w n . In 1912 one of the major leases was given to Lingam and Grogan f o r 50 years on an area of about 95,000 acres. Their s a w m i l l w a s the 10th i n the country (Clark 1969). The f i r s t t r i a l - p l a n t i n g s of e x o t i c softwood., s p e c i e s were s t a r t e d i n the 1920s* but serious p l a n t a t i o n work s t a r t e d around 1945 and by 1975, about 130 thousand hectares of man-made f o r e s t s had been created; w i t h a current p l a n t i n g programme of about 6,000 ha per annum. During the war years, there was an unprecedented e x p l o i t a t i o n of the i n l a n d f o r e s t s and e s p e c i a l l y during the second World War, l a r g e areas of montane c o n i f e r f o r e s t s were l e f t denuded of almost a l l e x p l o i t a b l e timber (Kamau, 1972). This was f i r s t l y due to the war demands and secondly due to the i n f l u x of c o l o n i a l s e t t l e r s who were s e t t l e d i n Kenya (then a B r i t i s h Colony), as a reward f o r t h e i r war s e r v i c e s . Due to i n t i a l setbacks i n attempts to regenerate e x p l o i t e d n a t u r a l f o r e s t s , r e s u l t i n g from f i r e and animal damage and u n c o n t r o l l e d weed growth and subsequent high establishment m o r t a l i t y , production management of the n a t u r a l f o r e s t s was more or l e s s abandoned, and only h a l f -h e a rtedly attempted or supported. I t can, however, be appreciated that knowledge on production management of n a t u r a l f o r e s t s under the p r e v a i l i n g c o n d i t i o n s was very elementary - 23 -(many of the then f o r e s t o f f i c e r s were not f o r e s t e r s by p r o f e s s i o n ) ; f o r e s t workers were few to e f f e c t i v e l y maintain n a t u r a l regeneration treatment and, above a l l , the idea of i n v e s t i n g i n n a t u r a l f o r e s t s that take r e l a t i v e l y longer than e x o t i c s o f t w o o d s to mature was not very appealing at that time to the c o l o n i a l government. These f a c t o r s , among ot h e r s , had a bearing on the p o l i c i e s formed then and purs-ued^latir,'- i n timber production management which i n -v o l v e d c l e a r i n g of s e l e c t i v e l y e x p l o i t e d n a t u r a l f o r e s t s , and r e p l a c i n g them wi t h f a s t growing e x o t i c s , p r i m a r i l y pines and cypress. On the u t i l i z a t i o n s i d e , e x p l o i t a t i o n was going at an a c c e l e r a t e d r a t e and C l a r k (1968) noted that between 1941 and 1945 every means were being employed to increase lumber supply, and thousands of pit-sawyers were employed f o r the purpose. Up to 1955 the sawmill i n d u s t r y i n t a k e frad? expanded s t e a d i l y to about 330,000m3 of which 287,000m3 i s estimated to have come from p u b l i c reserved f o r e s t s and the r e s t from p r i v a t e land. A f t e r 1955, the s^awlog harvest s t a r t e d a steep d e c l i n e . These were d i f f i c u l t years f o r the i n d u s t r y l i k e a l l other sectors of the economy due to a s t a t e o f emergency (declared i n 1952) and the i n t e n -s i f i c a t i o n of war f o r independence. During t h i s p e r i o d , p l a n t i n g , p l a n t a t i o n treatment and h a r v e s t i n g d r a s t i c a l l y d e c l i n e d (see Appendix I , Table 2; Appendix IV, Table 3; and F i g . 3 ) . By 1961, p r i o r to i n t e r n a l s e l f r u l e , sawlog harvest reached an a l l time low l e v e l of about 146,000m3. By t h i s time most of the f o r e i g n sawmillers were l e a v i n g the country due to the u n c e r t a i n t y about the country's 24 -fu t u r e economic and p o l i t i c a l environment a f t e r independence. Since 1962, the i n d u s t r y recovered r a p i d l y , r e a c h i n g the 1955 l e v e l of 330,000m3 by 1969 and 362,000m 3 by 1973. By the mid 1970's the sawmill i n d u s t r y was u s i n g about 3 3 340,000m of roundwood an n u a l l y and producing over 136,000m of sawnwood. There were 5 sawmills producing more than 3 5,000m (s) an n u a l l y , 60 sawmills producing i n excess of 3 3 1000m a n n u a l l y and 11 m i l l s producing 500-1000m (s) a n n u a l l y (Wamugunda and Solberg 1975). The f i r s t plywood m i l l (Sokoro) was e s t a b l i s h e d i n Kenya i n 1968, and s i n c e then two others (Elgeyo, 1969 and Rae 1972) have been e s t a b l i s h e d . A f o u r t h (Transmara) plywood cum-sawmill i s scheduled to s t a r t at Kericho by the end of 1970's and a f i f t h scheduled f o r East Mt. Kenya i s i n the government's Development Plan 1973 - 1978, but might not be i n p r o d u c t i o n u n t i l a f t e r 1980. The 3 o p e r a t i n g m i l l s have a c a p a c i t y of 2 3.8 m i l l i o n M . Although a k r a f t paper m i l l at Th i k a , with a c a p a c i t y of about 3,000 m e t r i c tons has been o p e r a t i n g on r e c y c l e d waste paper f o r some time, the f i r s t pulp and paper m i l l , with an i n i t i a l c a p a c i t y of 45,000 m e t r i c tons, s t a r t e d p r o d u c t i o n at Webuye i n l a t e 1974. T h i s m i l l has plans to i n c r e a s e i t s c a p a c i t y to more than double by the e a r l y 1980's. 1.3.2.2 F o r e s t r y ' s C o n t r i b u t i o n : F o r e s t r y makes important d i r e c t and i n d i r e c t c o n t r i b u - " . t i o n s to the Kenyan economy i n terms of GDP, employment and earning of f o r e i g n exchange. Primary f o r e s t r y c o n t r i b u t e s 25 -approximately 1.2 per cent of the t o t a l GDP, of which 0.5 per cent i s i n the non-monetary s e c t o r and the other 0.7 per cent i n the monetary s e c t o r . The forest-based i n d u s t r i e s c o n t r i b u t e s u b s t a n t i a l l y i n both manufacturing and c o n s t r u c t i o n sectors of the economy. In terms of employment, f o r e s t r y and logging i n 1974 employed 32,500 people or 4.0 per cent of the t o t a l wage earning f o r c e . Wood and paper i n d u s t r i e s employed about 13,900 people or 1.6 per cent of the country's wage earners; thus i n t o t a l f o r e s t r y and forest-based i n d u s t r i e s employed 46,400 people i n 1974, equivalent to approximately 5.7 per cent of the wage earning labour f o r c e , which i s a s u b s t a n t i a l c o n t r i b u t i o n being only next to a g r i c u l t u r e . Of these workers, approximately 20,000 are employed by the p u b l i c s e c t o r . D i r e c t r e c o r d e d earnings i n f o r e s t r y and logging i n 1974 were about K£ 3 m i l l i o n and i n forest-based i n d u s t r i e s 6.8 m i l l i o n o r 15 per cent of a l l earnings i n manufacturing. Although i n monetary terms the c o n t r i b u t i o n to GDP may seem s m a l l , r e l a t i v e to other s e c t o r s , f o r e s t r y ' s c o n t r i b u t i o n a l s o can be viewed from the r o l e i t plays i n the non-monetary sector where wood, food from subsistence farming and l i v e s t o c k provide the economic and l i f e s t y l e base for.about.90 per cent of the p o p u l a t i o n which l i v e s "in'-' the r u r a l areas"; -Its'is e s t i m a t e d that over 90 per cent of the wood consumed d o m e s t i c a l l y i s i n form of fuelwood and b u i l d i n g p o l e s , used i n the i n f o r m a l r u r a l s e c t o r . Other than as a source of fuelwood and b u i l d i n g m a t e r i a l f o r the more than 90 per cent of the p o p u l a t i o n , woodcraft and wooden items form an important economic niche i n the r u r a l s e c t o r , a c o n t r i b u t i o n that does not enter the n a t i o n a l accounts. Apart from t h e i r production function, forests and wooded vegetations have very important c l i m a t i c , environmental and ecological conservation and improvement functions which are d i f f i c u l t to quantify i n monetary terms. Over 8,000 forest resident workmen, t h e i r families and dependants derive t h e i r food from forest ©states (for consumption and marketing) through the Shamba (Taungya) system. Table 1.5: F o r e s t r y ' s c o n t r i b u t i o n to the monetary economy r e l a t i \ s e l e c t e d s e c t o r s i n Kenya's GDP. Industry Percentage of t o t a l gross product at constant (1964) T o t a l monetary economy yi 1964 1968 75.4 1969 76.0 1970 1971 77.4 1972 1973 1974 73.0 76.8 78.1 78.9 79.0 * * F o r e s t r y 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 Mining and quarryi n g 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 Manufacturing and Re p a i r i n g 10.4 10.4 10.7 10.8 11.6 11.6 12.1 12.5 * B u i l d i n g and c o n s t r u c t i o n 2.1 2.8 2.6 2.5 2.6 2.9 2.7 2.4 Transport and communication 7.4 8.9 8.5 8.5 8.4 7.8 7.7 7.9 Education 3.4 4.5 4.7 4.9 5.0 5.4 I * A g r i c u l t u r e 16.1 14.4 15.5 15.3 14.3 15.2 15.3 14.7 *Dwellings 6.1 6.2 6.0 6.2 6.3 6.5 6.2 6.0 Source: (Kenya) S t a t i s t i c a l A b s t r a c t , 1975. Table 1.6: Employment i n f o r e s t r y and fo r e s t r y - b a s e d i n d u s t r i e s (1974) Industry F o r e s t r y ( P u b l i c s e c t o r ) Logging Sawmills, planning and other woodmills Wood co n t a i n e r s and other products Wooden f u r n i t u r e s and other f i x t u r e s Pulp and Paperboards Pulp, Paper and Paperboard Products TOTAL: Persons Percentage 17.219 "5.2 § 2.1 of P u b l i c and wage earners r e s p e c t i v e l y 7,763 7,356 176 i> 2.5 (of t o t a l wage earners) 3,161 492* 1,990 ) 38,157 4.6 of wage earners T o t a l employment i n p u b l i c s e c t o r T o t a l Estimated wage employment 330,045 826,263 * Webuye Pulp and P a p e r m i l l s s t a r t e d operating i n mid 1974 and i s not i n c l u d e d thus t h i s f i g u r e i s f a r below the employment f i g u r e i n the i n d u s t r y however the m i l l ' s l o g g i n g operations were already w e l l advanced. Source: (Kenya) S t a t i s t i c a l A b s t r a c t 1975. - 29 -1.3.2.3 F o r e s t p o l i c y ; In r e a l i s a t i o n of the r o l e o f f o r e s t r y i n the economy and s o c i e t y , the Kenya F o r e s t P o l i c y ( S e s s i o n a l Paper No.l, 1968) was formulated and adopted, not o n l y to meet the p r o d u c t i o n and p r o t e c t i v e f u n c t i o n a l o b j e c t i v e s , but a l s o to expand and strengthen them so as to i n c r e a s e and b e t t e r s e r v i c e t o s o c i e t y by f o r e s t s . The p o l i c y s t a t e s i n p a r t : v . . . . t e h e Government i s determined to r e s e r v e i n p e r p e t u i t y the e x i s t i n g f o r e s t s and wherever p o s s i b l e , add to them so as to p r o v i d e s u f f i c i e n t land i n order t o : (i) M a i n t a i n and improve the c l i m a t i c and p h y s i c a l c o n d i t i o n s of the country; ( i i ) Conserve and r e g u l a t e water s u p p l i e s by p r o t e c t i o n of catchments and by any other means necessary f o r the purpose, i n c l u d i n g the impounding of water i n f o r e s t areas; ( i i i ) Conserve the s o i l by p r e v e n t i o n of d e s i c c a t i o n and s o i l movement caused by water and wind; and (iv) Ho p r o v i d e f o r the needs of the country i n timber and other f o r e s t products adequate to  meet the requirements o f . t h e community under  a f u l l y developed n a t i o n a l economy and t o  p r o v i d e the greatest p o s s i b l e s u r p l u s of those  products f o r export market"" (emphasis mine) There has been i n a d d i t i o n an emphasis towards encourage-ment of the establishment of p r i v a t e l y owned wood l o t s and (where p o s s i b l e ) p l a n t a t i o n s by the farmers through The R u r a l A f f o r e s t a t i o n E x t e n s i o n Scheme S e r v i c e s (RAES), launched i n 1971 (Forest Department Progress Report, 1972-1975). Through the RAES, t r a i n e d f o r e s t o f f i c e r s are posted i n the r u r a l a d m i n i s t r a t i v e d i s t r i c t s t o p r o v i d e e x t e n s i o n s e r v i c e s through p r o v i s i o n of t e c h n i c a l a d v i s o r y s e r v i c e s to i n d i v i d u a l farmers, - 30 -co-operatives and other land-oriented firms. In addition the government i n i t i a t e d incentives by reducing the prices of departmentally raised seedlings to a fixed small rate of KSh. 2.00 (equiv. US$ 0.25) per box of 50 seedlings. On National Tree Planting Day, the country's President usually leads the nation i n tree planting, and seedlings are issued free by the Forest Department, usually i n the order of 1 to 2 m i l l i o n seedlings annually. The continued expansion of plantation establishment i s geared towards the fourth p o l i c y objective of enhancing the forest production function.. The attainment of t h i s p o l i c y objective i s dependent on the success or shortcomings of the production-management sub-p o l i c i e s , programmes and practices; the subject of t h i s thesis. 1.3.2.4 Organization and administration: Forestry i s administered under the Ministry of Natural Resources, together with the Department of Mines and Geology, and i s headed by a Chief Conservator of Forests assisted by a Deputy Chief Conservator (administration) and an Assistant Chief Conservator (Field management and operations). Three conservators head specialised conservancies (Forest Industrial Development, Management Services, and Research), while f i v e other conservators head f i e l d conservancies. The f i e l d conservancies are divided into Forest Divisions.; Forest Divisions into, Forest D i s t r i c t s and Forest D i s t r i c t s into Sub-Districts, with a D i v i s i o n a l Forest O f f i c e r (DFO) being in charge of a d i v i s i o n and a Forester i n charge of a d i s t r i c t - 31 or a s u b - d i s t r i c t . The l a t t e r has rangers as a s s i s t a n t s , who normally should have c e r t i f i c a t e s from a f o r e s t r y t r a i n i n g s c hool. The day-to-day p l a n n i n g , implementation, a d m i n i s t r a t i o n and r e p o r t i n g process flows i n e i t h e r d i r e c t i o n v e r t i c a l l y along the f i e l d conservancy and head o f f i c e l i n e , h o r i z o n t a l l y between f i e l d and s p e c i a l i s e d s e c t i o n s , and can o r i g i n a t e from e i t h e r d i r e c t i o n . The c u r r e n t < o r g a n i z a t i o n a l s t r u c t u r e i s depicted i n Chart 1. A d m i n i s t r a t i o n at and above the D i v i s i o n a l Forest O f f i c e r l e v e l i s normally manned by graduates i n f o r e s t r y , although a Senior Forester may administer a D i v i s i o n ^ and an A s s i s t a n t C o n s e r v a t o r of Forests (ACF) may be i n charge of a l a r g e Forest D i s t r i c t . 1 1. A-iG.F. i s a p r o f e s s i o n a l t i t l e f o r a f o r e s t r y graduate below the post of a conservator and i s t h e r e f o r e not an a d m i n i s t r a t i v e post. _ 32 _ M i n i s t e r of Natural Resources + A s s i s t a n t M i n i s t e r X Permanent Secretary (MNR) + Deputies '.Chief Commissioner '. • Mines and Geology I [  Deputy ChieTTonserva^f~TT)TCF) | Chief Conservator of Forests (CCF) P o l i c y , Development Plans, concessions and Licences Finance, manpower Dev. and Administration nr. I A s s t T I P r o j e | Loan Chief Conservator (ACCF) ect Manager, World Bank Project (PMWBL) operating accounts, Planting programmes, f i e l d management operations and plans Reports. Specialised' [conservancies I r I • , j. ; [Research! Management! I ' Services . / Conservators of Forests [ • ( l . S i l v i c u - 1.Inventory ( l t u r e Sec. ( Sec. (2.Pathology2.Fire Soc. ( Sec. (J.F.ntomo- 3.Manage-( logy Sec. ment ( Plans (4 . U t i l i z a - 4.Educ. and t i o n sec. T r a i n i n g ) * 5.Survey sec 6. (Rural Ext. S e r v i c e s ) * 7. Central Stores 8.Economics sec. r o r e s t Indus t r i a l Develo-pment 1. For"Ind. Tr. Centre 2. Marketing Sec. 3. Engineering Sec. 4 (roads F, bridges) J Z 7= T 3 ^ , I F i e l d conservancies' p°^l |Ea£t| |Nakuruj [wt^ [Pujpwool Coast (2,1) Lamu ( 2 . 0 ) Sou'the-Elburgan rn (7,6) (3,0) Londian Nairo- (5,3) b i Nyahururu (4,5) (6,3) Nyeri Baringo (4,3) (5,6) Embu (4.5) K i t a l e (Nabkoi) (4,4) (4,5) Kisumu Eldoret (3,0) (3,2) Turbo , (3,2) , DIVISIONAL FOREST OFFICERS ACFs/FORESTERS j Forest D i s t r i c t s (Stations) Foresters j Forest Rangers Forest guards Sub D i s t r i c t s (Substations) Headmen | • Resident Workmen .— Motes •These have no s e c t i o n heads " P r o p o s e d , from p a r t o f E l d o r e t (x, y)No. o f s t a t i o n s and s u b - s t a t i o n s 33 1.4 METHODOLOGY In s t u d y i n g wood r e s o u r c e s production-management i n r e l a t i o n t o market r e q u i r e m e n t s , the l a t t e r was c o n s i d e r e d t o be the c r i t e r i a f o r the former. Thus the premise was t h a t any p r o d u c t i o n p o l i c y , p l a n n i n g and i m p l e m e n t a t i o n w i l l be g u i d e d p r i m a r i l y by t h e needs and r e q u i r e m e n t s , b o t h q u a n t i t a t i v e and q u a l i t a t i v e , of t h e s p e c i f i c market f o r whi c h the wood raw m a t e r i a l s and t h e i r d e r i v e d p r o d u c t s are i n t e n d e d . To a t t a i n t h e o b j e c t i v e s o f the s t u d y (major p r i m a r y o b j e c t i v e b e i n g t o e v a l u a t e the c o n s i s t e n c y and c o m p a t i b i l i t y of p r o d u c t i o n programmes w i t h markets' r e q u i r e m e n t s ) , the f i r s t s t e p was t o c l a s s i f y t h e c u r r e n t d i f f e r e n t markets f o r wood and wood p r o d u c t s ; a n a l y s e t h e c u r r e n t s t r u c t u r e and r e q u i r e m e n t s . The second s t e p was t o make lon g - r a n g e f o r e c a s t s o f t he s i z e s and r e q u i r e m e n t s f o r t h e d i f f e r e n t markets (Chapter 2 ) . The t h i r d s t e p was an a n a l y s i s o f c u r r e n t wood r e s o u r c e s and p l a n n e d p l a n t i n g and management programmes, from w h i c h f o r e c a s t s f o r p o t e n t i a l f u t u r e wood s u p p l i e s were made (Chapter 3 ) . The f o u r t h s t e p was a c o m p a r a t i v e s y n t h e s i s o f p o t e n t i a l raw wood s u p p l i e s and t h e p r o j e c t e d e s t i m a t e s o f r e q u i r e m e n t s f o r s p e c i f i c markets (Chapter 4 ) . In Chapter 5, t h e f i n d i n g s o f t h e co m p a r a t i v e s y n t h e s i s a r e d i s c u s s e d . O b s e r v a t i o n s , c o n c l u s i o n s and recommendations a re summarised i n Chapter 6. - 34 -V a r i o u s s o u r c e s o f d a t a were used, p r i m a r i l y d e p a r t m e n t a l , government and i n t e r n a t i o n a l p u b l i c a t i o n s . Heavy r e l i a n c e was p l a c e d on p r i m a r y u n p u b l i s h e d i n t e r n a l r e c o r d d a t a from f o r e s t department's d i v i s i o n a l and d i s t r i c t r e p o r t s . 1.4.1 Market A n a l y s i s Wood markets were i d e n t i f i e d and c l a s s i f i e d by broad c a t e g o r i e s o f i n t e r m e d i a t e or f i n a l p r o c e s s e d p r o d u c t s as f o l l o w s : ( i ) Sawnwood ( i i ) Wood-based p a n e l s : (a) plywood (b) c h i p and f i b r e - b a s e d p a n e l s ( f i b r e b o a r d and p a r t i c l e board) ( i i i ) Paper p r o d u c t s : (a) n e w s p r i n t (b) w r i t i n g , and p r i n t i n g paper (c) i n d u s t r i a l paper (packaging o r l i n e r board and b u i l d i n g board) ( i v ) Roundwood (a) p o l e s and f e n c e p o s t s (b) mangrove p o l e s (v) F u e l wood (a) f i r e w o o d (b) c h a r c o a l 35 F o r each of t h e s e p r o d u c t s , t r e n d o f a p p arent consumption was a n a l y s e d on the b a s i s o f : Apparent Consumption = ( P r o d u c t i o n + Imports) - E x p o r t s P r o d u c t s ' i n v e n t o r i e s c a r r i e d o ver from y e a r t o y e a r were not t a k e n i n t o account s i n c e such i n f o r m a t i o n was n o t a v a i l a b l e . A n a l y s i s on w h i c h f o r e c a s t s a r e based c o v e r s t h e p e r i o d 1960-1975, a p e r i o d whose c h o i c e was made f o r a number of r e a s o n s . F i r s t l y , the p r e c e d i n g decade was c h a r a c t e r i s e d by p o l i t i c a l u p h e a v a l s , a f a c t o r t h a t g r e a t l y d i s t o r t e d t h e normal f u n c t i o n i n g o f t h e economy. S e c o n d l y , a f t e r t h e c o u n t r y ' s independence a t the b e g i n n i n g of the 1960's, i n d u s t r i e s , markets and o t h e r s o c i o - e c o n o m i c i n s t i t u t i o n s have f u n c t i o n e d and grown on the b a s i s o f newly f o r m u l a t e d i n d u s t r i a l , economic and p o l i t i c a l g u i d e l i n e s and s t r a t e g i e s . Thus the chosen p e r i o d can be r e g a r d e d , ce-tfris p a r i b u s , as b e i n g a s t e r e o t y p e o f t h e a n t i c i p a t e d f u t u r e i n b o t h p o l i t i c a l and s o c i a l economic c o n t e x t . T h i r d l y , the d a t a f o r t h i s p e r i o d can be c o n s i d e r e d as more a c c u r a t e t h a n f o r t h e p r e v i o u s y e a r s due t o t h e a d m i n i s t r a t i v e r e - o r g a n i z a t i o n , and i n s t i t u t i o n a l measures and s t r u c t u r e s i n s t i t u t e d s i n c e independence t o enhance r e c o r d i n g and d a t a c o l l e c t i o n by b o t h i n t e r n a t i o n a l a g e n c i e s , government and p r i v a t e f i r m s f o r p l a n n i n g and i n v e s t m e n t p u r p o s e s . Data f o r t h e p e r i o d 1975-1978 were e i t h e r u n a v a i l a b l e o r i n c o m p l e t e and hence t h i s p e r i o d was n o t t a k e n i n t o a c c o u n t . 36 -1.4.2 Market F o r e c a s t i n g Models Among oth e r t h i n g s , demographic, economic and time change f a c t o r s are the major determinants of market dynamics, and t h e i r r e l a t i o n s h i p and a p p l i c a b i l i t y t o the Kenyan markets f o r wood products were e x t e n s i v e l y e x p l o r e d u s i n g the a v a i l a b l e data f o r the p e r i o d chosen, 1960-1975. V a r i o u s econometric models, r e l a t i n g consumption of wood products to these independent v a r i a b l e s have been developed, used or d i s c u s s e d i n other works such as FAO (1971), H o l l a n d (1970), Enabor (1971), Buongiorno (1977), FAO (1960), FAO (1967), Gregory (1966), Hair. (1967), P r i n g l e . a n d A r n a l d (1965) , van Vuuren (1968), Nweke (1975), S l a t i n (1963), Wilson (1963) and M c K i l l o p (1971). D i f f e r e n t models emphasise the d e t e r m i n i s t i c i n f l u e n c e s on demand and consumption a s s o c i a t e d w i t h v a r i o u s socio-economic parameters. In d e v e l o p i n g the f o r e c a s t i n g models i n t h i s study, the demographic v a r i a b l e was disaggregated i n t o urban and r u r a l p o p u l a t i o n components and the economic v a r i a b l e i n t o monetary and non-monetary GDP components. I t was f e l t necessary t o do t h i s f o r a market such as Kenya's where the i d e n t i f i e d components are d i s t i n c t e n t i t i e s , w i t h a predominantly non-monetary economy s u b s i s t i n g i n the r u r a l areas and a pre-dominantly urban-based monetary economy. 37 P o p u l a t i o n : F o r e c a s t s were based on two a l t e r n a t i v e a s s umptions: (a) C o n s t a n t p o p u l a t i o n growth r a t e s of 3.4 p e r c e n t f o r t o t a l p o p u l a t i o n and 2.9 p e r c e n t per annum f o r r u r a l p o p u l a t i o n , growth r a t e s p r e v a i l i n g by 1975. Urban p o p u l a t i o n e q u a l s t o t a l p o p u l a t i o n minus urban p o p u l a t i o n . P r o j e c t e d t o t a l , u r b a n , and r u r a l p o p u l a t i o n s i n c r e a s e t o 84.70, 28.38 and 56.37 m i l l i o n r e s p e c t i v e l y by t h e y e a r 2030, from 13.23, 1.67 and 11.88 m i l l i o n by 1975. (b) V a r i a b l e d e c l i n i n g growth r a t e s , d e c l i n i n g a n n u a l l y by 0.01 p e r c e n t f o r t o t a l p o p u l a t i o n and 0.08 p e r c e n t f o r urban p o p u l a t i o n ; d e c l i n i n g from 3.5 p e r c e n t and 9.0 p e r c e n t f o r the two r e s p e c t i v e components (1960), t o 2.8 p e r c e n t and 3.3 p e r c e n t r e s p e c t i v e l y by the y e a r 2030. R u r a l p o p u l a t i o n i s the d i f f e r e n c e o f the t o t a l and urban p o p u l a t i o n s . P r o j e c t e d t o t a l p o p u l a t i o n i n c r e a s e s from 13.23 m i l l i o n i n 1975 t o 74.10 m i l l i o n i n 2030, urban from 1.67 m i l l i o n t o 34.51 m i l l i o n and r u r a l from 11.88 m i l l i o n t o 39.60 m i l l i o n (see F i g . 2 ) . A l t h o u g h e s t i m a t e s based on the two assumptions were used i n consumption p r o j e c t i o n s , o n l y e s t i m a t e s based on v a r i a b l e growth r a t e s were used i n t h e t e x t (Chapter 2 ) . Other p o p u l a t i o n e s t i m a t e s based on t r e n d r e g r e s s i o n s and c o n s t a n t growth r a t e s are g i v e n i n Appendix I I f o r comparison. 38 -Gross Domestic P r o d u c t (GDP): As an independent v a r i a b l e i n consumption model c o n s t r u c t i o n and subsequent f o r e c a s t s , GDP was based on an assumption o f t h r e e l e v e l s o f economic growth, v i z . h i g h , medium and low growth r a t e s . Growth r a t e s used were: Monetary GDP: 8.5 p e r c e n t ( h i g h ) , 6.7 p e r c e n t (medium), and 5.0 p e r c e n t (low) Non-monetary GDP: 6.5 p e r c e n t ( h i g h ) , 4.5 p e r c e n t (medium), and 3.5 p e r c e n t (low) The medium GDP growth r a t e s were t h o s e p r e v a i l i n g i n 1975, and t h e c o r r e s p o n d i n g r a t e s f o r t o t a l GDP were t a k e n as t h e sum o f monetary and non-monetary GDPs. A l t h o u g h p r o j e c t i o n d a t a f o r a l l e s t i m a t e s are g i v e n i n Appendix I I , o n l y consumption e s t i m a t e s based on medium growth r a t e s a r e used i n t h e t e x t (Chapter 2 ) . P r o j e c t i o n s o f GDP based on t r e n d r e g r e s s i o n s a re a l s o g i v e n i n Appendix I I f o r comparison. A l l GDP e s t i m a t e s are i n c o n s t a n t Kenyan Pounds (K ) a t 1964 p r i c e s . S i n c e economic w e l f a r e , as measured by p e o p l e ' s income i s an i m p o r t a n t f a c t o r i n consumption o f consumer goods, and t o some e x t e n t some p r o d u c e r goods, t h e p e r c a p i t a GDP income element was a l s o used as an independent v a r i a b l e . P r o b a b l y t h e d i s p o s a b l e p e r c a p i t a GDP income would have been a more a p p r o p r i a t e v a r i a b l e t o use, b u t t h e a v a i l a b l e i n f o r m a t i o n on - 39 -incomes i s not s u f f i c i e n t t o d e r i v e t h i s component of income. T h e r e f o r e t o t a l p e r c a p i t a GDP income was used i n t h e f o r e c a s t a n a l y s i s . In consumption r e g r e s s i o n and subsequent p r o j e c t i o n models, 8 independent v a r i a b l e were used i n d i f f e r e n t c o m b i n a t i o n s . These were: ( i ) t o t a l p o p u l a t i o n ( i i ) urban p o p u l a t i o n ( i i i ) r u r a l p o p u l a t i o n ( i v ) t o t a l GDP (v) monetary GDP ( v i ) non-monetary GDP ( v i i ) t o t a l p e r c a p i t a GDP income ( v i i i ) t i m e s e r i e s In a d d i t i o n , 3 f u n c t i o n a l e q u a t i o n models were t r i e d f o r each r e g r e s s i o n e q u a t i o n , v i z . l i n e a r , s e m i - l o g a r i t h m i c and d o u b l e - l o g a r i t h m i c f u n c t i o n a l e q u a t i o n s , f o r comparison and d e t e r m i n a t i o n o f t h e f u n c t i o n a l form t h a t b e s t d e s c r i b e s consumption - v a r i a b l e r e l a t i o n s h i p s f o r each p r o d u c t s . A s i m i l a r approach was used by FAO (1971). F i g u r e s 1, 2 and 3 show the e s t i m a t e d independent v a r i a b l e s used i n f o r e c a s t i n g v a r i o u s wood p r o d u c t s ' consumption t r e n d s . T a b l e 1.7 shows t h e d i f f e r e n t r e g r e s s i o n and f u n c t i o n a l e q u a t i o n models used i n p r o j e c t i o n e s t i m a t e s f o r each wood p r o d u c t . S E M I - L O G A U I T H M I C 5 C Y C L E S X 70 D I V I S I O N S MILLION .S ^1 t i f f ' l I i l _ > .LUxl M l V O ce o 3 f o a o i i i : ; I ! I [ J ;IT; i i i ; L L 1 '• i i i i nil HTIi -mi Tl'ii iii1 -U . i 4 1 - 42 -Table 1.7: Regression and func t i o n a l equation models ••• used f o r f o r c a s t i n g future consumption of each wood product other than fuelwood. Functional form Regression model Independent v a r i a b l e s l.time s e r i e s 2.urban pop, r u r a l pop. monetary GDP and non-monetary GDP 3.t o t a l pop. and t o t a l GDP 4.Per c a p i t a GDP income L i n e a r Y-a+b 1X 1+b 2X 2 +b nX n C . t = a l + b o t Semi-log. y=a+b 1logX 1.. ...+b logX. C t = a 2 + b l P U t + b 2 P r t +b 3Gm t+b 4Gn t C t - a 3 * C l P T t t C 2 G T t V V V Double-log. logY=a+b 1logX 1. ...+b logX V 7 where: Y = the dependent v a r i a b l e =-C X = the independent v a r i a b l e s-Pj, G} ^ • consumption during year t P = population; u , r , 7 a r e urban, r u r a l and t o t a l s ubscripts G «= GDP; m,n,T are monetary, non-monetary and t o t a l subscripts t = the actual year such as 1960, 1976 or 2020 a " a regression constant b, c and d 3 regression c o e f f i c i e n t s Equation constants and c o e f f i e n t s were obtained from regression analysis f o r the respective products (see c o r r e l a t i o n matrix,App.II) For time s e r i e s , regression t r i a l s showed that the use of the actual year gave better r e l a t i o n s h i p s than other forms of time notations such as 1960 » 1, 1965 = 5 etc . The l a t t e r form of indexing time also gives problems with f u n c t i o n a l models; other than l i n e a r forms, where backward projections extend - 43 -Through r e g r e s s i o n t r i a l s , t h e l i n e a r time s e r i o u s were found i n a p p r o p r i a t e f o r consumption e s t i m a t e s o f p r o d u c t s o t h e r than p o l e s , p o s t s and mangrove p o l e s . T h i s i s e x p e c t e d s i n c e f o r most o t h e r p r o d u c t s , o t h e r v a r i a b l e s t h a t have n o n - l i n e a r r e l a t i o n s h i p w i t h time have s t r o n g i n f l u e n c e s on consumption o f such p r o d u c t s . Mangrove p o l e s have a s p e c i a l market i n t h a t t h e i r use i s c o n f i n e d t o the c o a s t a l p o p u l a t i o n and t h e c o a s t a l e x p o r t t r a d e . Hence i t would be i n a p p r o p r i a t e t o use t h e c o u n t r y ' s p o p u l a t i o n o r income as d e t e r m i n a n t s o f demand o r consumption of mangrove p o l e s . F u r t h e r m o r e , a l a r g e p r o p o r t i o n o f t h e p o l e s ' demand i s e x t e r n a l . F o r t h i s p a r t i c u l a r p r o d u c t , o n l y t h e t i m e s e r i e s p r o j e c t i o n e s t i m a t e s were c o n s i d e r e d . F o r a l l t h e wood p r o d u c t s c o n s i d e r e d , t h e d e r i v e d p r o j e c t i o n models were used f o r f o r w a r d f o r e c a s t i n g from 1975 t o the y e a r 2030, as w e l l as backward p r o j e c t i o n e s t i m a t i o n o f p r o d u c t consumption d u r i n g t h e p e r i o d 1960 t o 197 5. The l a t t e r e s t i m a t e s were made t o e v a l u a t e t h e p r e d i c t i o n a b i l i t y o f the models used, s i n c e t h e a c t u a l 1960-1975 d a t a were known. I n the r e s p e c t i v e graph c u r v e s drawn i n t h e t e x t f o r d i f f e r e n t wood p r o d u c t s , the a c t u a l d a t a are r e p r e s e n t e d by a h e a v i e r p l o t c u r v e . P r o j e c t i o n e q u a t i o n models and p r o j e c t i o n e s t i m a t e s by d i f f e r e n t f o r e c a s t i n g models a r e g i v e n i n Appendix I I , and 44 -graph c u r v e s i n Chapter 2, i n t h e r e s p e c t i v e s e c t i o n d e a l i n g w i t h each wood p r o d u c t . E s t i m a t e s o f p r o b a b l e f u t u r e consumption f o r each p r o d u c t a r e g i v e n as a range based on two o r more f o r e c a s t s e s t i m a t i n g - m o d e l s c o n s i d e r e d as 'best' d e s c r i b i n g t h e market r e l a t i o n s h i p w i t h t h e chosen demographic, economic and t i m e v a r i a b l e s . The concept o f a consumption range i s based on t h e premise t h a t no f o r e c a s t e s t i m a t e can be c o n s i d e r e d as an e x a c t p r e d i c t i o n s i n c e d i f f e r e n t consumption d e t e r m i n a n t f a c t o r s , ( p o p u l a t i o n s , incomes and time) i n f l u e n c e t h e markets d i f f e r e n t l y . E s t i m a t e s a r e f u r t h e r r e f i n e d and s t r a t i f i e d i n t o 5-year p e r i o d ( t o t a l ) r a nges. Such e s t i m a t e s so grouped have the advantages o f s m o t h e r i n g out a n n u a l v a r i a t i o n s , f l u c t u a t i o n s e v i d e n t i n any market. Both t h e a n n u a l range and 5-year range e s t i m a t e s f u r t h e r demonstrate the u n c e r t a i n t y a s s o c i a t e d w i t h d i f f e r e n t assumptions about d i f f e r e n t v a r i a b l e s such as p r o p o r t i o n s o f p o p u l a t i o n components, GDP components and o t h e r s h i f t s a s s o c i a t e d w i t h passage of t i m e . Fuelwood e s t i m a t e s a r e based on a r e c e n t d e t a i l e d r e s e a r c h paper by t h e a u t h o r ( K a h u k i , 197 8 ) . I n t h e paper, 1975 fuelwood consumption was a n a l y s e d u s i n g h o u s e h o l d , r e g i o n a l , u r b a n , r u r a l , s e r v i c e s and i n d u s t r y s e c t o r s as the b a s i c consuming u n i t s and u s i n g t h e i r growth as p r o j e c t i o n b a s i s . - 45 1.4.3 Wood Raw M a t e r i a l Supply A n a l y s i s The p o t e n t i a l s u p p l y e s t i m a t e s a re based on t h r e e s o u r c e s v i z . ( i ) sawnwood p l a n t a t i o n s , ( i i ) pulpwood p l a n t a t i o n s and ( i i i ) n a t u r a l f o r e s t s . The p o t e n t i a l s u p p l y i s d e t e r m i n e d by a number o f f a c t o r s such as t h e p h y s i c a l q u a n t i t y o f wood produced p e r u n i t a r e a , t h e t o t a l a r e a under f o r e s t , t h e t e c h n i c a l s t a n d a r d o f u t i l i z a t i o n (e.g. t o p d i a m e t e r l i m i t s ) , t he t e c h n i c a l q u a l i t y o f wood and the a c c e p t a b l e q u a l i t y l i m i t s , as w e l l as t h e economic c o n s t r a i n t s o f h a r v e s t i n g and t r a n s p o r t i n g wood under d i f f e r e n t t e r r a i n and o t h e r g e o g r a p h i c a l c o n d i t i o n s . P o t e n t i a l s u p p l i e s from p l a n t a t i o n s : E s t i m a t e s of f u t u r e s u p p l i e s from p l a n t a t i o n s a r e based on p l a n t a t i o n a r e a s : ( i ) As e x i s t i n g by t h e end of 1975, c l a s s i f i e d by age, a r e a s i z e and g e o g r a p h i c a l d i s t r i b u t i o n (see Appendix I V ) . ( i i ) P l a n n e d p l a n t i n g and r e p l a n t i n g programmes f o r the p e r i o d 1975-1980 (FAO/IBRD, 1974). ( i i i ) Assumed r e p l a n t i n g o f h a r v e s t e d a r e a s and p o s s i b l e new p l a n t i n g beyond 1980. P a s t performance i n a c h i e v i n g p l a n t i n g t a r g e t s has been t a k e n i n t o a ccount. 46 -C u r r e n t l y , two 'top d i a m e t e r u t i l i z a t i o n l i m i t s ' a r e used i n Kenya i n a s s e s s i n g bole-volumes from p l a n t a t i o n s . An upper u t i l i z a t i o n l i m i t i s c o n s i d e r e d as 10.2cm f o r c y p r e s s and 15.2cm f o r p i n e s (the two major p l a n t a t i o n wood s p e c i e s ) , and a lower u t i l i z a t i o n l i m i t o f 15.2cm f o r c y p r e s s and 20.3cm f o r p i n e s . E s t i m a t e s o f f u t u r e p l a n t a t i o n pulpwood s u p p l i e s have been based on t h e upper l i m i t s w h i l e t h o s e o f o t h e r p r o d u c t s are based on the two a l t e r n a t i v e s . I n the t e x t , t h e acronyms UUL and LUL are f r e q u e n t l y used i n r e f e r e n c e t o upper u t i l i z a t i o n - t o p - d i a r i e t e r l i m i t and lower u t i l i z a t i o n - t o p -d i a m e t e r l i m i t . The t i m i n g f o r h a r v e s t i n g ( t h i n n i n g and c l e a r f e l l i n g ) a r e based on c u r r e n t d e p a r t m e n t a l management regimes as l a i d down i n T e c h n i c a l Orders ( T e c h n i c a l Orders No. 42, 43 and 44 of 196 9 ) . P l a n t a t i o n Management regimes a r e g i v e n i n Appendix V I . Volume c a l c u l a t i o n s a re on t h e b a s i s o f d e p a r t m e n t a l volume t a b l e s (Wanene 1975, 1976, Wanene and W a c h i o r i 1975). P o t e n t i a l s u p p l y e s t i m a t e s , l i k e market q u a n t i t a t i v e r e q u i r e m e n t s a r e on 5-year p e r i o d s b a s i s . The 5-year p e r i o d s u p p l y concept i s used t o m i n i m i s e e s t i m a t e e r r o r s r e s u l t i n g from a n n u a l o r p e r i o d i c f l u c t u a t i o n s caused by e i t h e r t h i n n i n g and f i n a l h a r v e s t i n g b a c k l o g s o r by e x c e s s i v e h a r v e s t i n g such as caused by the s t a r t o f a new m i l l . The s u p p l y f o r a 47 5-year p e r i o d i s assumed t o be t h e sum o f e s t i m a t e d volumes from t h i n n i n g i n a r e a s due f o r 2nd, 3 r d and 4 t h t h i n n i n g s d u r i n g the 5-year p e r i o d and volumes from f i n a l h a r v e s t i n g of a r e a s due f o r f i n a l h a r v e s t d u r i n g t h e r e s p e c t i v e 5-year p e r i o d . Three o t h e r assumptions a r e made: ( i ) A r eas h a r v e s t e d ( f i n a l h a r v e s t ) d u r i n g a 5-year p e r i o d w i l l be r e p l a n t e d d u r i n g t h e same 5-year p e r i o d , hence w i l l be i n t h e 0-5 y e a r age c l a s s d u r i n g t h e c o n s e c u t i v e l y f o l l o w i n g 5-year p e r i o d , ( i i ) H a r v e s t e d a r e a s w i l l be r e p l a n t e d w i t h t h e same s p e c i e s as t h a t h a r v e s t e d , o r a l t e r n a t i v e l y p r o p o r t i o n s r e p l a n t i n g a r e a w i l l be i n t h e same s p e c i e s r a t i o as t h a t o f a r e a s h a r v e s t e d , ( i i i ) S p e c i e s c o m p o s i t i o n of new p l a n t i n g programmes w i l l be i n accordance w i t h c u r r e n t p o l i c i e s . The s m a l l p r o p o r t i o n o f hardwood p l a n t a t i o n s (approx. 13,000ha. by 1975) i s m a i n l y composed o f e u c a l y p t s f o r fuelwood (approx. 9,000ha) and t h e r e s t i s made up of s m a l l s t a n d s o r b e l t s w i d e l y s c a t t e r e d o v e r th e c o u n t r y . F o r t h e s e r e a s o n s , t h e s e p l a n t a t i o n s a r e n o t c o n s i d e r e d t o be o f any s i g n i f i c a n c e as s o u r c e s of i n d u s t r i a l wood. P o t e n t i a l s u p p l i e s from n a t u r a l f o r e s t s : An assessment o f p o t e n t i a l f u t u r e s u p p l i e s o f wood from n a t u r a l f o r e s t s i s made d i f f i c u l t by a number of f a c t o r s . Some o f the major f a c t o r s a r e : 48 ( i ) Lack o f knowledge on t h e p r e c i s e q u a n t i t i e s o f t h e growing s t o c k . I n v e n t o r y s u r v e y s a re r a t h e r t o o g e n e r a l f o r d e t a i l e d u t i l i z a t i o n p l a n n i n g and f o r each i n d u s t r y o r h a r v e s t i n g t r a c t ; a d e t a i l e d i n v e n t o r y c r u i s e i s n e c e s s a r y p r i o r t o commencement o f o p e r a t i o n s . ( i i ) The heterogeneous n a t u r e o f a s t a n d , i n b o t h s p e c i e s c o m p o s i t i o n , age and t r e e s i z e d i s t r i b u t i o n as w e l l as s p e c i e s s t o c k i n g d e n s i t i e s a r e bound t o a p p e a l t o d i f f e r e n t p r o s p e c t i v e wood-using i n d u s t r i e s d i f f e r e n t l y , and hence t h e p o t e n t i a l u t i l i t y of t h e s t a n d w i l l v a r y w i t h the wood u s e r , ( i i i ) Some o f t h e n a t u r a l f o r e s t s o r p a r t s o f them may e i t h e r be e c o l o g i c a l p r o t e c t i v e u n i t s o r i n a c c e s s i b l a r e a s , hence c o n s t r a i n i n g wood e x t r a c t i o n , ( i v ) W i t h c h a n g i n g t e c h n o l o g y c o u p l e d w i t h p r o s p e c t s o f developments o f new wood-based p r o d u c t s , c u r r e n t l y u n u t i l i z a b l e s p e c i e s , wood s i z e s and grades might i n f u t u r e r a i s e s u p p l i e s above c u r r e n t e s t i m a t e s . The F o r e s t Department's Reconnaisance I n v e n t o r y R e p o r t o f Indigenous F o r e s t s (1973) i s the b a s i s o f e s t i m a t e s f o r growing s t o c k s i n the n a t u r a l f o r e s t s . E s t i m a t e s f o r p o s s i b l f u t u r e s u p p l i e s o f i n d u s t r i a l wood from t h i s s o u r c e have been made u s i n g two a l t e r n a t i v e approaches: - 49 -(a) Assumption t h a t e x t r a c t i o n of wood w i l l f o l l o w c u r r e n t t r e n d , w i t h volume h a r v e s t e d i n c r e a s i n g a t the r a t e of 2.3 per c e n t a n n u a l l y . (b) E s t i m a t e s based on p r o j e c t e d development o f f o r e s t i n d u s t r i e s . M i l l s c u r r e n t l y u s i n g wood from n a t u r a l f o r e s t s a re e x p e c t e d t o expand t h e i r o p e r a t i o n s and some new and l a r g e r plywood, f i b r e b o a r d , p a r t i c l e b o a rd and i n t e g r a t e d m i l l s , based on n a t u r a l f o r e s t s ' s u p p l i e s w i l l come i n t o p r o d u c t i o n a t c e r t a i n i n t e r v a l s . E s t i m a t e s based on t h e two a l t e r n a t i v e s a re g i v e n i n T a b l e 4.7. 1.4.4 S y n t h e s i s H a v i n g d e t e r m i n e d p r o j e c t i o n e s t i m a t e s f o r wood r e q u i r e -ments and p o t e n t i a l s u p p l i e s , a wood b a l a n c e approach was used t o compare t h e i r c o m p a t i b i l i t y i n terms o f p h y s i c a l q u a n t i t i e s . T h i s i s p r e s e n t e d i n b o t h t a b l e s and g r a p h i c a l models. The models d i s a g g r e g a t e r e q u i r e m e n t s and p o t e n t i a l s u p p l i e s f o r i n d i v i d u a l p r o d u c t s o r commodities and aggregate p r o d u c t s w i t h s i m i l a r raw m a t e r i a l base; ( i ) c h i p and f i b r e p r o d u c t s (paper p r o d u c t s , f i r e b o a r d s and c h i p b o a r d s ) , ( i i ) l o g - b a s e d ; p r o d u c t s (sawnwood and plywood), ( i i i ) p o l e s and f e n c e p o s t s , and ( i v ) fuelwood ( f i r e w o o d and c h a r c o a l ) . The q u a l i t a t i v e e v a l u a t i o n has two a s p e c t s . F i r s t l y , t h e p h y s i c a l raw m a t e r i a l form, n e c e s s i t a t i n g a g g r e g a t i o n i n t o p r o d u c t s o f s i m i l a r wood m a t e r i a l base. S e c o n d l y , t h e m e c h a n i c a l c h a r a c t e r i s t i c s of a v a i l a b l e wood and t h e market 50 r e q u i r e m e n t s w i t h r e g a r d t o t h e s e c h a r a c t e r i s t i c s such as w e i g h t , h a r d n e s s , d u r a b i l i t y , s h r i n k a g e , w o r k a b i l i t y and s t r e n g t h q u a l i t i e s . These a s p e c t s a re a n a l y s e d and d i s c u s s e d i n r e l a t i o n t o s p e c i f i c p r o d u c t s i n Ch a p t e r 4. Q u a n t i t i e s and c h a r a c t e r i s t i c s o f some o f t h e more common s p e c i e s growing i n Kenya are g i v e n i n Appendix V I I I . - 51 CHAPTER 2 MARKETS FOR KENYAS WOOD PRODUCTS In t r o d u c t i o n ; Sevefeal approaches e x i s t f o r market c l a s s i f i c a t i o n of wood products, Markets can be i d e n t i f i e d by: (a) product, (markets f o r roundwood, fuelwood, sawnwood, paper and paper products etc.) (b) Product use ( b u i l d i n g and c o n s t r u c t i o n , f u e l , packaging, newspaper and w r i t i n g paper etc.) (c) Product-user market (Industry, p u b l i c i n s t i t u t i o n s and works, p r i v a t e household, a g r i c u l t u r e or other such s e c t o r s and sub-sectors) (d) Market l o c a t i o n (Urban, r u r a l , geographical re g i o n or domestic and export market) No s i n g l e c l a s s i f i c a t i o n i s s u f f i c i e n t l y all-embracing t o p r e c l u d e t h e u s e o f / o t h e r s . . ... The h y b r i d i z a t i o n of the d i f f e r e n t conceptual markets i n an a n a l y s i s a f f o r d s the viewer c l a r i t y , and emphasises the importance of each market segment whose s i g h i f ic.awce w o u l d o t h e r w i s e be l o s t i n an a n a l y s i s of aggregates. This i s p a r t i c u l a r l y important i n form u l a t i o n of production p o l i c i e s , s ince each market segment, sector and sub-sect®r has d i f f e r e n t product s p e c i f i c a t i o n requirements i n product c h a r a c t e r i s t i c s , q u a l i t i e s and q u a n t i t i e s . In t h i s study, the approach taken has been f i r s t to broadly c l a s s i f y the major f o r e s t products i n t o product -forms'and then disaggregate the sub-markets as f o r b,c and d 52 above,where a p p l i c a b l e . The extent o f market d i s a g g r e g a t i o n has been l i m i t e d l a r g e l y by the absence of s u f f i c i e n t data to d e s c r i b e some market segments such as g e o g r a p h i c a l markets, d i s t r i b u t i o n and s i z e s . The study c e n t r e s almost e x c l u s i v e l y on the domestic market s i n c e study o f the e x t e r n a l market f o r f o r e s t products i s c o n s i d e r e d as being beyond the scope of t h i s p a r t i c u l a r a n a l y s i s and r e q u i r i n g a separate study. However, i n the a n a l y s i s o f apparent consumption t r e n d s , past exports and imports have been taken i n t o account. For the purpose of t h i s study, f i v e broad c a t e g o r i e s of wood products have been c o n s i d e r e d namely: (1) Sawnwood (2) Wood based p a n e l s , ( 3 ) Pulp and paper p r o d u c t s , ( 4 ) Fuelwood, and 1 ( 5 ) Roundwood. 5 3 2.1 SAWNWOOD ' 2 . 1 . 1 . 1 Problems of estimating, p r o d u c t i o n and consumption Several attempts have been made to a s c e r t a i n the amount of sawnwood produced. No e x p l i c i t system e x i s t s to evaluate such production and hence any estimates that have been made are i m p l i c i t . The Forest Department of Kenya la c k s s u f f i c i e n t . l e g a l powers e n a b l i n g i t t o o b t a i n : j a l l n e c e s s a r y production s t a t i s t i c s from the sawmill producers and d e a l e r s . On the other hand,the C e n t r a l Bureau of S t a t i s t i c s , which has such l e g a l powers i s l i m i t e d by i n s t i t u t i o n a l and f i n a n c i a l c o n s t r a i n t s i n i t s data c o l l e c t i o n and r e l i e s , to a lar g e extent,on data from the Forest Department and the M i n i s t r y of Nat u r a l Resources. The Forest Department employs t h r e e main- methods of data c o l l e c t i o n on wood harvest and manufacture. F i r s t l y , the department uses p e r i o d i c a l returns from the f i e l d s t a f f f o r limber s a l e s on monthly and annual b a s i s . Secondly, long-term l i c e n s e s - s a w m i l l e r s and plywood manufacturers are supposed to make annual sales returns f o r the pe r i o d March to A p r i l of consecutive years. This process i s f o r the purpose of esti m a t i n g the average s e l l i n g p r i c e s f o r the products on. - which timber r o y a l t y i s based f o r the f o l l o w i n g year. T h i r d l y , the department p e r i o d i c a l l y undertakes some studies on the i n d u s t r y , such as conversion r e c o v e r i e s , m i l l c a p a c i t i e s and economic s t r u c t u r e . 54 A l l three systems are f a r from p e r f e c t as s o u r c e s o f d a t a f o r the purpose of a comprehensive study of the wood i n d u s t r y and market. The f i r s t system, while g i v i n g f a i r l y accurate data of timber s a l e s , has a number of shortcomings (a) Only purchases of wood from government c o n t r o l l e d f o r e s t reserves are covered by the system and i t does not i n d i c a t e to what use the timber i s put, or when such timber i s p r o c e s s e d - There can be a time-lag between timber measurement, r e p o r t i n g , haulage to the m i l l and a c t u a l conversion. (b) During the process of c o m p i l a t i o n , r e c o m p i l a t i o n and aggregation, the data may be d i s t o r t e d . A case i n po i n t i s where only the val u e , and not the volume, i s i n d i c a t e d f o r some f o r e s t s t a t i o n s ' s a l e s . This i s p a r t i c u l a r l y common f o r short term l i c e n c e s , whereby the c o n t r a c t o r pays at the s t a t i o n of operation, u n l i k e --longterm l i c e n c e s whereby^ the f o r e s t o f f i c e r sends the s c a l i n g record documents to the m i n i s t r y headquarters,from where the l i c e n s e e i s b i l l e d and sales records compiled. (c) The timing of r e p o r t i n g can g r e a t l y a f f e c t the co m p a r a b i l i t y and accuracy of data. I f at the time of r e p o r t i n g some repor t s from some of the s t a t i o n s or d i v i s i o n s have not been r e c e i v e d , i t means that such data i s excluded from the r e l e v a n t r e p o r t . This may be one of the explanations f o r discrepancy of data published i n s t a t i s t i c a l a b s t r a c t s and that from departmental records w i t h a lowering b i a s f o r the former. - 55 -The second system of d i r e c t s a l e s submission i s not of much use as a source of production i n f o r m a t i o n since t h i s only records s a l e s and not production. I t does not take account of c a r r i e d over stock, i n t e r n a l l y consumed, swapped or "donated" stocks. The t h i r d system i s i d e a l f o r the s p e c i f i c purpose of the study. An i m p l i c i t approach of apparent production and apparent consumption e s t i m a t e can" be a u s e f u l one i n the. absence o f e x p l i c i t production and consumption data. This approach has been employed,(supplimented w i t h other ' l o c a l i s e d ' studies}, by FAO (1962), and Wamugunda and Solberg (1975) to estimate sawnwood production i n 1960 and 1972/73 r e s p e c t i v e l y . In i t s simple form, t h i s approach uses a c e r t a i n conversion recovery f a c t o r to estimate the q u a n t i t y processed and wood product produced.from round timber harvested i n a given year. By i n c o r p o r a t i n g trade balances and changes i n stock ( i f known), apparent consumption i s estimated. This approach has been used here. -'2,1.1.2 Apparent production and consumption Data on sawlog production f o r Kenya v a r y q u i t e considerably w i t h the data source. In esti m a t i n g sawlog pro d u c t i o n , published and unpublished data have been used. Table 2.1a compares d i s c r e p a n c i e s i n pub l i s h e d and unpublished data on the sa l e of sawlogs and veneer logs by the Forest Department, while Table 2.1b shows trend summary of departmental s a l e of timber and woodfuel as obtained from i n t e r n a l departmental sources ( d i v i s i o n a l and d i s t r i c t r e p o r t s and p e i o d i c r e t u r n s ) . A s t r i k i n g - 5 6 -f e a t u r e of the data i s the d o w n w a r d b i a s of the o f f i c i a l aggregate f i g u r e s compared w i t h the data obtained from the ©ther various sources. Apart from 1970 when excess of disaggregated data was negative (-4 per c e n t ) , the others show that on the average, aggregate recorded annual l o g sales are about 10 per cent lower than a c t u a l disaggregate reported s a l e s . There may be s e v e r a l explanations f o r t h i s ( i ) Most of the published data i s based on l a r g e long-term licence.e-records as shown i n t h e i r m i n i s t r y headquarters* accounts where the l i c e n c e e' makes payments, and not on monthly s t a t i o n reports to f o r e s t headquarters. Thus most short term and temporary licences; are not covered. This can be ob'serveddin the monthly compilations of wood production issued by the M i n i s t r y of Natural Resources s t a t i s t i c s d i v i s i o n , where only major sawmills are recorded, ( i i ) As mentioned e a r l i e r , there are some delays i n r e p o r t i n g at the / d i f f e r e n t stages of-data c o l l e c t i o n and communication ch a i n , hence not a l l i n f o r m a t i o n i s a v a i l a b l e at the time of r e p o r t i n g . A complete a n a l y s i s of i n d u s t r i a l timber sales i s given i n Appendix I , Table 1.1 In e s t i m a t i n g wood pr o d u c t i o n , t h i s f a c t o r of data discrepancy has been taken i n t o account by a d j u s t i n g the data of App.I, Table 1.1. (See Table 2.1a and App.I, Table 1.2.) A 10 per cent upwards adjustment has been used f o r the p e r i o d 1950 - 1965 while a c t u a l f i g u r e s were used f o r subsequent years. Another f a c t o r considered has been wood - 57 : - ' produced i n non-government c o n t r o l l e d f o r e s t s and wooded areas. Wamugunda and Solberg (1975) estimated i n t h e i r survey that about 9 per cent of log intake by Forest Department-licensed sawmills comes from p r i v a t e l y ow&ed lands. Mugweru (1969) studying some of the minor sawmills estimated that 25 per cent of t h e i r output comes from p r i v a t e lands. However these minor sawmills and pit-sawyers produce only 20-25 per cent of t o t a l sawnwood produced i n Kenya according to the survey by Wamugunda iand Solberg (1975). Assuming the l a r g e s t m i l l s take 75 per cent of t o t a l f o r e s t s a l es and the smaller m i l l s 25 per cent, and that the two c l a s s e s o b t a i n from p r i v a t e lands 9 and 25 per cent ( r e s p e c t i v e l y ) of t h e i r wood i n t a k e , then on weighted average a 13 per cent of f o r e s t departmental wood sales can be assumed to be a d d i t i o n a l l y taken from p r i v a t e land by a l l government-forestflicensed m i l l s . No previous estimate has been made of the volume produced by c o n t r a c t o r s , m a i n l y pit-sawyers operating s o l e l y on p r i v a t e lands. However, they form only a small p r o p o r t i o n of the t o t a l i n d u s t r i a l round wood harvested i n the country, probably l e s s than 2 of a l l i n d u s t r i a l harvest or 21 per cent of a l l sawnwood consumed. Thus i n t o t a l , unrecorded sawlogs from p r i v a t e and government f o r e s t s can be estimated at 27 per cent of o f f i c i a l l y recorded sales (Table 2.4), or 15 per cent of a c t u a l t o t a l . FAO (1970) i n d i c a t e d an estimate of 35 per cent of a l l d o m e s t i c a l l y consumed sawnwood i n 1967 as having been unrecorded, w i t h r u r a l consumption amounting to 40 per cent of the grand t o t a l . This FAO estimate i s r a t h e r high, amounting to about 54 per cent of the recorded - 58 volume, two and a h a l f times the estimates of t h i s study. The estimated removals of saw and veneer logs (adjusted f o r (a) unrecorded removals from government f o r e s t s , (b) removals from p r i v a t e lands)) are presented i n App.I, Table 1.2, while App.I, Table 1.3 shows the trade and apparent consumption balances. A trend a n a l y s i s (Figure 5) i n d i c a t e s d r a s t i c d e c l i n e i n sawnwood production and consumption by the end of 1950's and at the beginning of 1960's. This i s understandable since the country was undergoing great p o l i t i c a l changes, being the tra n s i t i o n p e r i o d from c o l o n i a l r u l e towards independence; and the ass o c i a t e d u n c e r t a i n t i e s a n t i c i p a t e d by the i n d u s t r y which was l a r g e l y i n the hands o f f o r e i g n e r s . Since 1961 consumption has r i s e n from a low l e v e l of about 40,000m to about 130,000m i n 1975. Since t h i s d e p i c t s the trend i n p o s t - c o l o n i a l Kenya, i t seems l o g i c a l to use that ttrend f o r f u t u r e f o r c a s t s as i t r e f l e c t s current and a n t i c i p a t e d p o l i t i c a l and economic environment i n which the f o r e s t r y s e c t o r under study i s expected to operate. The p r o p o r t i o n of net imports of sawnwood (rough or simply worked) r e l a t i v e to the country's output has d e c l i n e d from 36 per cent i n 1962 to about 5 per cent i n 1975. Although i n absolute terms the qu a n t i t y exported has been s m a l l ( a p p r o x i -mately 10,000m ), i t has been i n c r e a s i n g during the p e r i o d under review. T a b l e 2.1a: Table 2.1b: COMPARISON OF PUBLISHED AND UNPUBLISHED INTERNAL TREND IN TIMBER AND DATA. ON SAW AND VENEER^SALES BY FOREST DEPARTMENT i FUELWOOD SALES BY FOREST DEPARTMENT. 'UBLISHED 'OL. , (OOOnT) INTERNALLY (OOOir, ) REPORTED (Discrepancy) Excess unpub-(OOOnT(r)) Pulp- Saw and l i s h e d Saw and Logs T o t a l Veneer wood Veneer Logs 3 (OOOni ) % Year San-logs Veneer-l o S s Pulp-wood wood-f u e l 1965 197 202 - 202 5 2.5 1950 231 - - 505 66 196 206 ' - 206 37 21.9 67 169 255 - 255 19 8.1 1955 287 - - 184 68 204 229 - 229 25 12.3 69 279 29 2 - 292 13 4.7 1960 237 - - 188 70 288 274 - 274 -14 -4.9 71 274 287 - 287 13 4.7 1965 202 - - 123 72 293 306 - 306 37 12.6 73 307 344 - 344 37 12.1 1970 277 11 - 288 74 297 375 46 329 32 10.8 75 286 445 126 319 33 11.5 1975 286 33 126 291 76 503 175 328 1976 295 33 175 300 1 i Source: Forest Department. Source: (1) S t a t i s t i c a l A b s t r a c t s 5 Dept. Annual Reports. (2) D i v i s i o n a l and s t a t i o n s annual and monthly r e p o r t s . 6 0 -Z. 1.2. Sawnwood markets: Kenya's sawnwood markets (by uses) are mainly i n b u i l d i n g and c o n s t r u c t i o n , and wood manufacturing which includes f u r n i t u r e and ; j \ i _ n e r y . Wamugunda and Solberg (1975) found that the l a r g e s t r e c e i v i n g sectors were b u i l d i n g and c o n s t r u c t i o n works, and timber merchants, accounting f o r about 30 per cent and 31 per cent r e s p e c t i v e l y o f t o t a l s a l e s . The wood m a n u f a c t u r i n g sect o r r e c e i v e d about 7 per cent, p r i v a t e (producer's) consumption 12 per cent, and exports 1.9 per cent. The r e l a t i v e shares of other sectors are shown i n Table 2.2a. Of the t o t a l s a l e s from the sawmills (as shown i n Table 2.2b), 84 per cent i s i n form of m i l l - r u n timber, while about 10 per cent and 5 per cent are i n form of p r e f a b r i c a t e d houses and j o i n e r y . According to an FAO (1962) survey about 56 per cent of sawnwood used was accounted f o r by items of b u i l d i n g j o i n e r y (doors and windows), 34 per cent by f u r n i t u r e and 10 per cent by s t r u c t u r a l uses (walls and r o o f ) . The same survey estimated sawnwood used f o r f u r n i t u r e s at 0.028M (12bft) per c a p i t a f o r the urban household, and f o r the r u r a l household at 0.002m , 3 3 3 0.003m , 0.004m and 0.013m iper c a p i t a ) f o r the low, medium, high and very high income groups (Table 2.2d). FAO (1970) estimated sawnwood consumption i n 1967 at 17.6 per cent urban household, 56.8 per cent f o r r u r a l house-hold 10.8 per cent f o r the p u b l i c sector and 14.9 per cent f o r i n d u s t r y . Although t h i s d i s t r i b u t i o n i s s l i g h t l y d i f f e r e n t from that estimated f o r 1960, t o t a l sawnwood consumption had a l t e r e d w i t h sharp d e c l i n e s during the i n t e r -mediate p e r i o d and markets were recovering by 1967. - 60 a -The FAO (19 70) r e p o r t observed that improvement i n housing does not appreciably improve wood consumption f o r f u r n i t u r e s but does so f o r j o i n e r y . Thus at low income l e v e l s , f u r n i t u r e i s more important while j o i n e r y i s more so w i t h middle and high incomes. - 61 -% of dom. market 1960 (%) 1967 Table 2.2a: SAWNWOOD CONSUMPTION BY DIFFERENT SUB MARKETS Table 2.5a: P r o p o r t i o n a l D i s t r i b u t i o n of Sawnwood Sales by r e c e i v i n g s e c t o r s . B u i l d i n g . Wood A g r i c u - Timber E d u c , P r i v a t e and manu- l t u r e merchants H e a l t h , consum-co n s t r u - f a c t u - Govt. p t i o n Others Exports c t i o n r i n g I of t o t a l 30.1 7.0 1.7 31.3 12.0 2.8 (53.3) (7.7) (1.9) (34.7) (6.0), (13.3) L l i i l Table 2.2b: P r o p o r t i o n a l d i s t r i b u t i o n by main products from sawmill (%) As Sawnwood Pre-fab houses J o i n e r y , Crates 85.1 10.0 •'•9 — Source : Wamugunda and Solberg (1975) . Table 2.2c: Estimates of s e c t o r i a l sawnwood consumption f o r 1960 and 1967 (000nH) URBAN RURAL PUBLIC INDUSTRY TOTAL Six-main towns 18.41 (L8.9) 11.33 (10.8) Other urban] Rate of change p.a. -6.70 Average!;  8.78 |(9.0) 7.08 (6.8) -3.03 T o t a l urban 27.19 |(27.9) 18.41 1(17.6) -5.42 (22.75) Large farm house ho l d 8.22 (8.4) 4.25 (4.1) 8.99 Small farm house ho l d 27.76 |(28.4) (9.6) 42.4912.75 |(40.5)jl2.2) non-hou-se-h o l d T o t a l 1 r u r a l 1 9.35 6.27 4.53 45.33 (46.4) 59.49 (56.8) 3.96 14.73 15.1) 11.33 10.7) -3.68 10.34 (10.6) 15.58 (14.9) 6.03 • 51 .60 j(12 . 90) 1 (12 . 75) 97.59 (100.0) 104.81 |(100.0 1.02 Source: Recompliled from FAO £1970) • * (conversion f a c t o r 1M J " 3 5 . 3 f t J ) NB: A sharp d e c l i n e took p l a c e a f t e r I960 and an upward t r e n d began i n 196Z, - 62 Table 2.2d: Estimated sawnwood consumption i n Rural Households 1 A = M / C a p i t a , LOW INCOME B " M 3/household, C » Percentage of consumption MEDIUM INCOME HIGH INCOME J o i n e r y A 0.0008 F u r n i t u r e 0.0010 S t r u c t u -r a l T o t a l 0.0002 0.002 B 0.004 0.006 0.001 C 36.4 54.5 9.1 0.011100.0 A 0.0020 0.0009 0.0001 0.003 B 0.011 0.005 O.OOll C 64.7 29.4 5.9 0.017100.0 A 0.0025 0.0014 0.0001 0.004 B 0.014 0.009 0.0011 C 58.3 37.5 4.2 0.024100.0 Source: FAO (1962) 1 A rural h o u s e h o l d e s t i m a t e d t o b e 5.5 persons (Kenya statistical d i g e s t , S e p t e m b e r , 1976) T a b l e 2, 3 : SAWNWOOD MARKET LOCATION; PROPORTION OF WOOD SUPPLIED BY MAJOil" PRODUCING AREAS TO MARKET LOCATIONS FOREST DIVISION PROVINCE FOREST DIVISION MARKET AREA 1 . Mombasa 2. Embu 3 . Meru 4. Nairobi/Thika 5 . N y e r i 6 . N a n y u k i 7 . Nakuru 8. Eldore c 9 . K i t a 1 e 10. Kisuniu 11. K i s i i 12 . Others 1.3 . Exports C O A S T _ E A S T E R N (% of t o t a l ) S U P P L Y I N G N.E Coast Southern Embu & Lamu 0.6 | 0.4 1 .1 2.9 2 . 7 T o t a l 0.5 0.4 1.5 N Na i r o b i Ny er i Nyahururu 0.1 0.2 0.8 11.8 1.5 2.9 16.6 0.1 3 . 2 0.7 1.5 3.7 0.2 9.4 0.1 4.7 0.1 0.4 0.4 0.1 5.8 I F T V A L L E Y Londian Elburgon Baringo Eldoret 0.3 3 . 2 0.3 1.4 1.3 1.3 0.1 7.9 4.1 14.9 3.6 1.9 4.0 1.4 29.9 0.5 1.9 1.2 0.7 0.1 0.4 0.7 5 . 5 0.5 1.9 W E S T E R N ] N Y A N Z A K i t a l e 0.5 0.4 2.1 5.4 0.4 6.4 Kisumu iTotal Region 0.4 0.4 0.2 0.8 0.1 8.7 0.1 0.1 0.1 1.0 0 . 2 1.5 7.9 1.1 2 . 9 5 0.8) 0.7 ) 1.8) 4.9) 1.3-1-1) ..!> 1.3) 15 .8 6.3 100 Coast & Eastern N. Eastern Central R i f t Valley-Western Nyanza Source: C a l c u l a t i o n s based on data given from Wamugunda and Solberg Q975) 64 -Market L o c a t i o n ; The l o c a t i o n - and d i s t r i b u t i o n o f sawnwood- markets c l a s s i f i e d by towns, p r o v i n c e s and f o r e s t d i v i s o n s a r e shown i n T a b l e 2.3, based on a s u r v e y by Wamugunda and S o l b e r g (1975). N a i r o b i , t h e c a p i t a l c i t y , i s t h e most i m p o r t a n t market, a b s o r b i n g about 60 p e r c e n t o f t h e t o t a l sawnwood produced by t h e sawmills''". About 59 per c e n t of s u p p l i e s t o N a i r o b i and T h i k a , or about 30 per c e n t o f t h e t o t a l p r o d u c t i o n goes t o t h e t i m b e r - merchants who r e d i s t r i b u t e t h e t i m b e r m a i n l y t o s m a l l f u r n i t u r e and j o i n e r y m a n u f a c t u r e r s , w i t h t h e o t h e r 41 p e r c e n t o f N a i r o b i consumption g o i n g f o r c o n s t r u c t i o n works. N a i r o b i ' s n e t consumption a c c o u n t s f o r about 51 p e r c e n t o f 3 t o t a l wood consumption (about 348,000 m round wood e q u i v a l e n t 3 o r 139,200 m sawnwood i n 1972/73). Mombasa i s t h e second l a r g e s t market w i t h 8 p e r c e n t of t o t a l p r o d u c t i o n f o l l o w e d by Nakuru (5 per c e n t ) Kisumu (4 per c e n t ) and Meru (3 p e r c e n t ) . The e x p o r t market, a c c o r d i n g t o the same s u r v e y a c c o u n t s f o r about 6 p e r c e n t . A p p r o x i m a t e l y 16 per c e n t o f t h e sawnwood i s s o l d a t t h e m i l l s i t e d i r e c t l y t o t h e n e i g h b o u r i n g r u r a l communities. C i t i e s and urban c e n t r e s though i m p o r t a n t market a r e a s , a l s o s e r v e as d i s t r i b u t i n g -c e n t r e s f o r t h e a r e a s around, and some o f t h e sawnwood s o l d t o town ti m b e r - m e r c h a n t s and d e a l e r s f i n a l l y ends up i n t h e r u r a l a r e a s . 1. T h i s was based on a s u r v e y o f t h e l a r g e s t 58 m i l l s , e s t i m a t e d t o produce 7 0-8 0 p e r c e n t o f t o t a l sawnwood produced from government c o n t r o l l e d f o r e s t s . - 65 -Evidence to support t h i s o b s e r v a t i o n i s p r o v i d e d by FAO (1970) who found t h a t the r u r a l household s e c t o r consumes about 5 7 per cent of a l l the sawnwood produced w i t h urban b u i l d i n g and other c o n s t r u c t i o n work using.-.about 18 per cent; p u b l i c and i n d u s t r y (both s e c t o r s mainly c e n t r e d i n urban areas) accounting f o r about 11 per cent and 15 per cent r e s p e c t i v e l y . Thus the r u r a l s e c t o r i s a very important market although the towns are the d i s t r i b u t i o n c e n t r e s . When c o n s i d e r i n g consumption on a t c g j o n a l b a s i s , " the 16 per cent r e s i d u a l (column 13 i n Table 2.3) i s d i s t r i b u t e d p r o p o r t i o n a t e l y t o the p r o v i n c i a l l o c a t i o n of the f o r e s t d i v i s i o n w i t h i n which the timber i s produced s i n c e i t i s s o l d t o the m i l l s ' neighbourhood. Assuming t h a t timber d e l i v e r e d t o a town i s e i t h e r used i n the twon or r e d i s t r i -buted to the town's neighbouring r u r a l a r e a s , r e g i o n a l consumption can be estimated at C e n t r a l P r o v i n c e 59 per cent, R i f t V a l l e y 14.7 per cent, Nyanza and Western 7.6 per cent and Coast, E a s t e r n and North E a s t e r n P r o v i n c e s 12.4 per cent.' 2. N a i r o b i which i s normally t r e a t e d as an E x t r a P r o v i n c i a l D i s t r i c t i s here c o n s i d e r e d as p a r t of C e n t r a l P r o v i n c e . 66 -I t i s most probable that the p o r t i o n f o r C e n t r a l Province i s overestimated and that f o r Eastern and North Eastern Provinces conservative, c o n s i d e r i n g that N a i r o b i a l s o serves parts of the Eastern Province such as Machakos and K i t u i d i s t r i c t s . N a i r o b i i s known to supply timber f o r government timber works i n the dry North Eastern Province. However sawnwood consumption i n the two provinces i s so small that the estimate's d i f f e r e n c e cannot be expected to be more than 2 per c e n t , i n which case C e n t r a l Province would have about 57 per cent share. Another area of discrepancy could be the Western Province. K i t a l e , although a d m i n i s t r a t i v e l y a p a r t of the R i f t V a l l e y , i t i s an important economic centre f o r the Western Province and i n any case K i t a l e Forest D i v i s i o n covers l a r g e p o r t i o n s of Western Province i n c l u d i n g Mt. Elgon on the Uganda >. For these reasons, the estimates have considered K i t a l e as a part of Western and not R i f t V a l l e y Province. The f o r e s t s of Western Province are e i t h e r p a r ts of K i t a l e Forest D i v i s i o n or the r e c e n t l y created Turbo Pulpwood D i v i s i o n . Since Kakamega (the p r o v i n c i a l c a p i t a l of Western Province) has been grouped as pa r t of Kisumu wood consumption centre, i t has not been easy to disaggregate consumption f o r the two provinces Nyanra and Western and only a rough estimate can be made. Thus c o n s i d e r i n g K i t a l e and a p r o p o r t i o n of Kisumu, consumption can be estimated as Western province 2.6 per cent and Nyanza 5 per cent of the t o t a l sawnwood produced i n Kenya. 2.1.3 P r o j e c t i o n s In making p r o j e c t i o n s f o r sawnwood markets, s e v e r a l estimates based on d i f f e r e n t consumption - i n f l u e n c i n g f a c t o r s are compared. Demographic, economic and time parameters, s e r v i n g as independent 67 -consumption - determinant v a r i a b l e s , and used with d i f f e r e n t f u n c t i o n a l models ( d i s c u s s e d under methodology i n chapter 1) give a wide range of estimates e s p e c i a l l y f o r the d i s t a n t f u t u r e . Figure 4 i s a g r a p h i c a l p r e s e n t a t i o n of p r o j e c t i o n e s t i mates, summarising comparatively data i n Appendix II and u s i n g only estimate data based on assumed medium (current) GDP growth r a t e s . By comparing sawnwood consumption trends between 1950 and 1975 ( F i g . 5) and p r e d i c t i o n curves ( F i g . 4), i t would appear t h a t the expected t r e n d l i e s somewhere between the p r e d i c t i o n s of the l i n e a r and s e m i - l o g a r i t h m i c models. Due to t h i s i n d e c i s i v e n e s s of the two p o s s i b l e models, a deeper examination of sawnwood consumption and market i s necessary to overcome t h i s problem. An examination of trends i n other c o u n t r i e s show that i n the long run, sawnwood consumption tends to e i t h e r remain constant or i n c r e a s e at a d e c r e a s i n g r a t e . T h i s has been the case i n B r i t a i n and U n i t e d States of America (Norman 1973, Gregory 1972 and P o t t e r et_ a_l. 1962), a phenomenon that i s a t t r i b u t e d to the tendency to s h i f t from use of sawnwood i n favour of s u b s t i t u t e s such as wood-based panels. This s i t u a t i o n e x i s t s i n most cases i n a developed market and i s not c h a r a c t e r i s t i c of a developing economy as e x h i b i t e d i n markets such as those i n South America, A u s t r a l i a or South A f r i c a , where past trends and f o r e c a s t s i n d i c a t e t hat the markets have not reached the ' s a t u r a t e d ' l e v e l s o f constant or d e c l i n i n g growth r a t e s i n sawnwood consumption ( T u r n b u l l 1959, Hanson 1959, Van Vuuren 1959). 68 O-ol 1*60 1970 1980 1990 2000. 2010 2020 2 0 3 0 • M 3' ( 0 0 0 ) ..'2 00 150 ; —100 j 50 • A, ;B •, Production .... , 7 -r ~ - : - y - : - v / : - ; - Nr*-Coris TH / I n / v. ; iLon L j_^ r fj War of independence' i a j Independence t r a n s i t i o n , jj£_£> A f t e r independence I:QCLL 1 9 5 0 1555 1960 1965 1970 1275 FIGURE. IT:- • Production; and consumption; of: sawnwood'.. in Kenya 1950-751 . 70 _ The case i s b e t t e r i l l u s t r a t e d by Buongiorno (197 7 ) , showing t h a t o v e r t i m e , and a t c o n s t a n t growth r a t e s , consumption of sawnwood grows f a s t e r i n t h e c o u n t r y w i t h t h e l o w e s t i n i t i a l c onsumption and s l o w e r i n the c o u n t r y w i t h the h i g h e s t / i n i t i a l consumption. "As t i m e goes by, t h e r a t e s o f growth and t h e l e v e l s o f consumption as w e l l as t h e consumption - income e l e s t i c i t i e s c o nverge." The same o b s e r v a t i o n was n o t e d by P r i n g l e and A r n o l d (1960) who o b s e r v e d t h a t i n t h e l e s s d e v e l o p e d c o u n t r i e s , p e r c a p i t a consumption o f sawnwood c o n t i n u e s t o i n c r e a s e w i t h incomes whereas i n t h e more d e v e l o p e d c o u n t r i e s , per c a p i t a consumption tends t o d e c l i n e a t h i g h income l e v e l s due t o s u b s t i t u t i o n . An a l t e r n a t i v e p r o j e c t i o n o f consumption t r e n d based on growth t r e n d of sawnwood-using s e c t o r s i n Kenya s u p p o r t s t h i s t h e o r y and t e n d s t o c o n f i r m t h e p r o j e c t e d e s t i m a t e s • based on t h e l i n e a r f u n c t i o n a l model, w i t h t h e p r e d i c t i o n c u r v e r u n n i n g between t h e range g i v e n by p o p u l a t i o n and GDP components on one hand and t h a t o f t o t a l p o p u l a t i o n and t o t a l GDP on t h e o t h e r hand (see x - c u r v e i n R i g . 4 ) ^ The e s t i m a t e s based on t h e l i n e a r f u n c t i o n a l model o f t h e t o t a l p o p u l a t i o n and t o t a l GDP, and t h e sawnwood-using s e c t o r a l t e r n a t i v e compare w e l l w i t h FAO (197 0) e s t i m a t e s , w h i l e p r e d i c t i o n s by t h e s e m i - l o g a r i t h m i c f u n c t i o n a l model are c o m p l e t e l y o ut o f range (see T a b l e 2.4 and 2.5). Thus t h e a c c e p t a b l e p r e d i c t i o n range f o r sawnwood consumption i s g i v e n by t h e f i r s t two a l t e r n a t i v e s . . 1. See s o u r c e e x p l a n a t i o n under T a b l e 2.5 . 71 .The functional model estimates are given by the equation: SW10 = 9.354. - 0.966PT + 0.255GT ) F-Prob. 0.00001092 0.903S 0.9254 0.5700 ) * (R =0.83783; SE=13.840) ; N=I6 ) SW10.j.= Sawnwood consumption estimates for year t (in OOOcu.m) 2 PT = Total population during year t (in millions) GT^ = Total GDP during year t in m i l l i o n Kenya Pounds (K million) at constant prices'-.J The estimates indicate that sawnwood consumption w i l l 3 increase from s l i g h t l y more than 0.1 m i l l i o n m i n 1975 to 3 approximately 0.7 m i l l i o n m by the year 2000 and increase six 3 times during the next 30 years to approximately 4 m i l l i o n m by the jear 2030. On t h i s basis, consumption per capita would 3 3 increase from 0.01 m by 1975 to 0.02 m by 2000 and 0.06 by 2030AD. The sector-based estimates (details i n Table 2.5) indicate 3 consumption increases from approximately 0.1 m i l l i o n m by 3 3 1975 to approximately 0.6 m i l l i o n m and 6. m i l l i o n m by 2000AD and 2030AD respectively, and a consumption per capita s l i g h t l y higher than that predicted by the li n e a r functional model. Comparatively, estimates based on the a l t e r n a t i v e l y considered semi-logarithmic model are too conservative, only increasing 3 3 from 0.1 m i l l i o n m by 1975 to 0.3 m i l l i o n m by 2000AD and 3 0.5 m i l l i o n m by 2030AD; giving an almost constant consumption 3 per capita of 0.01 m ; which w i l l be an un l i k e l y stuation for the next 50 years. Anticipated housing programmes and i n d u s t r i a l expansion w i l l undoubtedly rai s e the per capita sawnwood consumption despite population increases. % Estimates used .in the text are based on; PTVR= t o t a l population estimated on basis of a varying (declining growth rate) and GTMR = t o t a l GDP estimated on basis of medium growth, rate (current). * See p. 98. -72 -Table 2.4: Comparison of sawnwood consumption estimates based on a l t e r n a t i v e p r o j e c t i o n models and compared to FAO f o r c a s t s . ( m i l l i o n c ubic metres) Estimate 1975 1980 1985 1990 1995 2000 2005 2010 2020 2030 A l t e r n a t i v e 1 Sawnwood se c t o r -based 0.13 0.17 0.23 0.32 0.44 0.62 0.88 1.26 2.70 6.01 A l t e r n a t i v e 2 L i n e a r f u n c t i o -n a l r e g r e s s i o n 0.14 0.19 0.27 0.36 0.49 0.67 0.92 1.25 2.32 4.32 A l t e r n a t i v e 3 Semi-log. func-J j o n a l r e g r e s s i - 0.14 0.18 0.20 0.23 0.26 0.30 0.33 0.37 0.44 0.51 FAO estimates 0.14-0.17 0.18-0.22 0.28-0.38 -0.41-0.66 - -; • - - -From sector-based estimates, i n d u s t r y (packaging, wood manufacturing and f u r n i t u r e ) i s expected to be the major consumer of sawnwood/ i n c r e a s i n g requirements from approximately 13,600m3 (10.8 per cent of t o t a l ) by 1975 to about 35,000m3 (15.3 per cent) by 1985, and r i s i n g to about 1 m i l l i o n m3 mark by 2020AD, equivalent to 37 per cent of the t o t a l . Although the urban housing and other c o n s t r u c t i o n w i l l be the l a r g e s t consumer of sawnwood by the end of the c e n t u r y (217,000m or 35 per cent compared to i n d u s t r i a l s e c t o r ' s 147,000m or 24 per c e n t ) , i t s proportionate share w i l l have f i r s t r a i s e n from about 33 per cent i n 1975 to about 36 per cent by 1995 and then d e c l i n e d to about 26 per cent by 2030AD. While the p r o p o r t i o n a t e market shares of the urban sector (housing and c o n s t r u c t i o n ) and r u r a l sector ( a g r i c u l t u r e , timber merchants and households), w i l l be d e c l i n i n g , market shares of the p u b l i c s e c t o r (education, h e a l t h and government) and i n d u s t r y sector w i l l be p r o g r e s s i v e l y i n c r e a s i n g ; p u b l i c sector i n c r e a s i n g consumption from about 7 per cent of t o t a l - 73 sawnwood by 1980 to about 21 per cent by 2030AD. These trends are s i m i l a r l y apparent i n a comparison of the e a r l i e r works of FAO (1962), FAO (1970) and Wamugunda and . Solberg (1975). D e t a i l s of the s e c t o r i a l consumption f o r c a s t a n a l y s i s are given i n Table 2.5 T a b l e 2,5: S e c t o r i a l Sawnwood Con s u m p t i o n f o r c a s t FAO E S T I M A T E S ^ WAMUGUNDA / SOLBERG ESTIMATES ^  P R O J E C T E D E S T I M A T E S (000 m 3) S e c t o r Components % S e c t o r Components (O00) % • % A (6.8%) B % 1980 1985 1990 1995 2000 j.005 3 C i .5 34.3 2010 2020 2030 URBAN S i x m a j o r towns 14.8 Oth e r towns 7.9 S u b - t o t a l 22.7 H o u s i n g and c o n s t r u c t i o n (41-9) 33.3 58 . 2 34.4 80.9 35 . 2 112.4 35.6 156. 2 35.6 217.0 35,1 419 . 0 33.2 809 . 0 29.9 1561.8 26.0 RURAL L a r g e farms H/hold6.2 S m a l l " " 34.4 N on-household 10.9 S u b - t o t a l 51.5 A g r i c u l t u r e 1.9 t i m b e r mercha- ,, , 34.7 nt s P r i v a t e conau- 13.3 m p t i o n 62.8 49.9 A (4.2%) B % 77.1 45 . 6 94.3 41.2 116.4 36.8 143.0 32,6 175.7 28.5 215.8 24.6 265.1 21.0 400. 0 14.8 603 . 5 10.0 PUBLIC P u b l i c 12.9 E d u c a t i o n , H e a l t h and government (7.5) 6.0 A (9.8%) B % 12,0 7 .1 19,1 8.3 30.5 9,6 48,7 11.1 77.6 12 . 6 123 ,9 14,1 197 .8 15 . 7 503 . 7 18 . 6 1282.9 21.3 INDUSTRY P a c k a g i n g and f u r n i t u r e S u b - t o t a l 12.7 Wood m a n u f a c t u r i n g 7,7 O t h e r s 3,1 (13.6) 10.8 A(10,Q%) B % 21,9 12,9 3 5,2 15,3 56,8 18,0 91.4 20 ,8 147 . 2 23 ,8 237 .1 27,0 381.8 30,2 990.3 36.6 2568.6 42.7 TOTAL 100 125.8 100 j (SW) 169.2 230.0 316.1 439.3 617 .5 878.3 1263.7 2703 . 0 6016.8 SOURCE; Ca). FAO (19.70), (b) Wamugunda and S o l b e r g ( 1 9 7 5 ) , (c). Based on 1975 b a s e - y e a r c o n s u m p t i o n of 0.13 m i l l i o n m ( A p p e n d i x I ) and s e c t o r i a l g r o w t h r a t e s ( s t a t i s t i c a l A b s t r a c t 1975) (_*) A v e r a g e between 1960 and 1967. (b) Average f o r the p e r i o d A p r i l 1972 - M a r c h , 1973 . A = E s t i m a t e P r o j e c t i o n s from c u r r e n t s e c t o r i a l g r o w t h r a t e s . P e r c e n t a g e a n n u a l growth r a t e i n p a r e n t h e s i s B = The c a l c u l a t e d s e c t o r i a l p e r c e n t a g e s h a r e i n t r e n d f o r sawnwood (as , i p e r c e n t a g e of p r o j e c t e d t o t a l ) - 75 2". 2 WOOD-BASED PANELS: The term wood-based panels i s used here w i t h reference to wood re c o n s t i t u t e d . f r o m wood c h i p s , wood wool, wood f i b r e s or wood sheets (veneers) to form boards or panels. Of these wood-based panels, the most important i n the Kenyan market are plywood, f i b r e b o a r d , p a r t i c l e b o a r d (chipboard) and blockboard. Although others such as veneers, cement-bonded woodwool board, cement-bonded p a r t i c l e b o a r d , waferboard and other t e c h n o l o g i c a l y new v a r i e t i e s of boards may e x i s t i n the market, they are commercially i n s i g n i f i c a n t at present. I t can be expected that as the i n d u s t r y and market f o r wood-based panels continue to develop and d i v e r s i f y , more of these lesser-used boards w i l l i ncrease inXbotft'quantity and importance. In the p a s t , plywood and f i b r e b o a r d have been the major products i n t h i s market. P a r t i c l e board i s a comparatively r e c e n t l y introduced product but one that i s r a p i d l y e s t a b l i s h i n g ,in the market. ( F i g . 6) . , Wood-based panels can be best thought of as lumber manufac-tured i n d i f f e r e n t methods. The re-constituted«wood boards, compared to lumber, although from a common wood base the former -.have s t r u c t u r a l , dimensional and economic advantages f o r c e r t a i n ^ as s t r e n g t h , r e l a t i v e to, weight and volume. •irse-s, such ns s t r e n g t h - r e l a t i v e to weight and volume. 2.2.1 Plywood', production and markets P r i o r to 1968, a l l plywood consumed i n the country was imported but since then three plywood m i l l s have been b u i l t , , two during 1968/69 and the other during 1972/73. The three e x i s t i n g m i l l s have c a p a c i t i e s of atfottt 1.0 m i l l i o n ; ^ 2 , 1 . 3 m i l l i o n m -'and.'i-1. 5 m i l l i o n m each per year or a t o t a l of 3 . 8 m i l l i o n . m 2 of plywood an n u a l l y . The veneerlog intake and plywood - 7 6 production f o r the three m i l l s s i n c e 1968 i s given i n Appendix I , Table 1.4. Domestic production from the three m i l l s has increased from l e s s than 1,000m ( 0 . 2 5 m i l l i o n square metres equivalent) by 1968 to about 11,800m3 (about 3 m i l l i o n square metres equivalent) by 1975 ( F i g . 6 ) . Most of the domestic production i s f o r packaging i n the tea i n d u s t r y 7 although a small p r o p o r t i o n i s produced f o r blockboards and c o n s t r u c t i o n . Thus the c o n s t r u c t i o n market i s almost wholly dependent on imported plywood. Plywood consumption i n Kenya has increased very f a s t from l e s s than h a l f a m i l l i o n square metres i n 1963 to about 4 m i l l i o n square metres by the middle of 1970's. During the 10 years p e r i o d 1963-1973, consumption increased by over 835 per cent or at the r a t e of 25 per cent annually. The most s i g n i f i c a n t increases are recorded f o r the p e r i o d a f t e r 1968 when l o c a l production s t a r t e d . Plywood c u r r e n t l y c o n s t i t u t e s the l a r g e s t p r o p o r t i o n of t o t a l wood-based panels, having increased from about 50 per cent i n 1960's to more than 60 per cent by mid 1970s and the balance being made up almost wholy by f i b r e b o a r d . The r e l a t i v e consumption trends f o r plywood, f i b r e b o a r d and p a r t i c l e b o a r d s are i l l u s t r a t e d i n Figure 6. 2.2.2 Fibreboard and P a r t i c l e b o a r d U n t i l r e c e n t l y , a l l the f i b r e b o a r d used i n Kenya was from imports. In 1975, a f i b r e b o a r d m i l l was set up at Elburgon and s t a r t e d production on a t r i a l b a s i s using eucalypts and some softwoods. U n t i l 1968 when plywood was f i r s t produced l o c a l l y , f i b r e b o a r d and plywood were imported and consumed i n almost equal q u a n t i t i e s . However, since the s t a r t of l o c a l production of plywood, consumption of f i b r e b o a r d i n i t i a l l y d e c l i n e d - 77 -2 by about a h a l f ( i n 1968 from about 1.2 m i l l i o n m t o about 0.6 , 2 m i l l i o n m ±, but has s i n c e made f a s t recovery. P r e s e n t l y , the r a t e of increase i n f i b r e b o a r d consumption i s f a s t e r than that of plywood although the amount used i s about 60 per cent of plywood. The major consumer - markets f o r f i b r e b o a r d s are c o n s t r u c t i o n and f u r n i t u r e . The recent upsurge of f i b r e b o a r d consumption can be a t t r i b u t e d to a c t i v i t i e s i n the housing sect o r of the economy, where f i b r e b o a r d i s needed f o r sheathing, c e i l i n g , p a r t i t i o n i n g and f u r n i t u r e . The growth of l t h e b u i l d i n g and c o n s t r u c t i o n sector i s the s i n g l e major i n f l u e n c i n g f a c t o r i n the consumption of f i b r e b o a r d and p a r t i c l e board, since u n l i k e plywood, very l i t t l e f i b r e b o a r d or p a r t i c l e b o a r d i s used f o r packaging. Due to the high s u b s t i t u t a b i l i t y of f i b r e b o a r d w i t h p a r t i c l e b o a r d and v i c e v e r s a , i t i s only reasonable that the consumption trend be considered f o r the two products together. P a r t i c l e b o a r d i s a new product i n the Kenyan market and i t s growth can be expected to have some negative e f f e c t s on f u t u r e expansion of f i b r e b o a r d markets. However while growth of p a r t i c l e b o a r d can be expected to be at the expense of f i b r e b o a r d , the aggregate growth of the two complimentary products can be expected to increase r a p i d l y w i t h increased incomes and demand f o r housing (and consequently expanded f u r n i t u r e demand^ coupled w i t h demand f o r higher standards of housing f o r an expanded and (standardwise) w e l l - o f f p o p u l a t i o n . The a n t i c i p a t e d growth and development i n housing, and housing standards can be expected not only i n the p r i v a t e sector but a l s o i n the p u b l i c sector as government and p u b l i c i n s t i t u t i o n s upgrade the housing and working environments f o r t h e i r workers f o r p o l i t i c a l , economic and s o c i a l expendiency. - 78 wood. P a n e l s - / P l y w o o d (consump-/ — t i o n ) / \ -- - - -P l y w o o d ^ ? : - r — ( P r o d u c t i o n ) ;1960 1962 1964 1966 1968 19-70. 1972 1974 1976 FIGURE 6: Consumption of"wood-based P a n e l s i n Kenya, 1960-1975. _L - 79 -There i s only one p a r t i c l e b o a r d m i l l i n Kenya (at Nakuru) but the m i l l i s at the i n i t i a l stages of p r o d u c t i o n , producing about 185,000m per year (Approx.1200m t o n s ) . This m i l l uses mainly p l a n t a t i o n t h i n i n g s as the source of i t s raw m a t e r i a l . P a r t i c l e b o a r d and f i b r e b o a r d are two areas of wood products that are expected to expand rather f a s t i n both production and consumption i n f u t u r e . In the near f u t u r e these products can be expected to supplement plywood i n the b u i l d i n g and f u r n i t u r e s e c t o r s r a t h e r than s u b s t i t u t i n g i t due to the high r a t e of expansion of the c o n s t r u c t i o n s e c t o r of the Kenyan economy. . 8 0 . -,2.2.3 Consumption P r o j e c t i o n s of 'Wood-based'.'Panels; In f o r e c a s t i n g consumption of wood-based panels, p r o j e c t i o n s are made sep a r a t e l y f o r plywood, f i b r e b o a r d combined w i t h p a r t i c l e b o a r d and f o r the three boards combined as one product. The f o r c a s t estimates from va r i o u s r e g r e s s i o n f u n c t i o n a l models (described urtdrer methodology i n chapter 1) are presented i n d e t a i l i n Appendix I I , Tables 11.8 - 11-10. Estimates based on a •medium* GDP growth r a t e and a v a r y i n g ( d e c l i n i n g ) p o p u l a t i o n growth ra t e assumptions are shown g r a p h i c a l l y i n Figures 7, 8 and 9. From r e g r e s s i o n a n a l y s i s c o e f f i c i e n t s , a n a l y s i s of the estimates data obtained by the d i f f e r e n t consumption p r o j e c t i o n models and t h e i r g r a p h i c a l e x t r a p o l a t i o n , the l i n e a r f u n c t i o n a l r e g r e s s i o n of the form Y=a+b,X,+b,X., b X 1 1 2 2 n n seems the more a p p r i a t e f o r e c a s t model. Of the independent v a r i a b l e s X^ used, urban and r u r a l components of p o p u l a t i o n , monetary and non-monetary GDP components, and the sums of the components seem to be b e t t e r estimate parameters f o r wood-based panels than e i t h e r per c a p i t a GDP or the time s e r i e s . Monetary GDP and urban p o p u l a t i o n seem to be the major components i n f l u e n c i n g consumption of wood-based panels wi t h r e s p e c t i v e r e g r e s s i o n c o e f f i c i e n t s of 0.9718 and 0.9721 (plywood) 0.9708 and 0.9668 ( f i b r e b o a r d and p a r t i c l e b o a r d ) , 0.9883 and 0.9872 (wood-based p a n e l s ) . From the va r i o u s t r i a l r e g r e s s i o n run p r o j e c t i o n s obtained, the prefered estimates are based on the f o l l o w i n g equations, ( u n i t s i n thousands of square metres). 81 -Plywood PW06 » -3269.813+2504.699PUt + 210.130PRt + 2.388GMt+0.156GNt F-Pvob. 0.18m-05 0.4815 0.5203 0.8039 0.8907 0.9420 PW10t=" -4669.455+342.643PTt + 6.671GTt (R2=0.94685)(SE=386.6) * F-Prob.0.4E-07 0.2256 0.6857 0.5781 (R2=0.94197) (SE=371.6) Fibreboard and Particleboard FB06t=2862.507-2335.556PUt - 694.110PRt + 34.980GMt - 12.506GNt FB10 = -15.920-342.891PT\ + 10.802GT,. t t t A l l wood-based boards and Panels BP06 - -407.306+169.143PUt - 483.979PRt+37.368GMt-12.350GNt F-Prob.0.5E-07 0.8856 0.9148 0.5808 0.5560 (R2=0.97957) (SE=360.0) BP10 =-4685.375 - 0.248PTt + 17.474GTt F-Proh.0.0E-08 0.2521 0.9496 0.1743 • (R2=0.97098) (SE=395.0)* where ; N= 16 PW06t,PW10. "two d i f f e r e n t estimates f o r plywood consumption i n year t (000m'2) FB06 t >FB10 t =two d i f f e r e n t estimates f o r fibreboard/ -particleboard consumption i n year t (000m ) BP06.,BP10t '•two d i f f e r e n t estimates for consumption of a l l wood-based boards and panels i n year t (000m2) Pu\ PRt PT t =urban, r u r a l and t o t a l populations during z> z * z year t ( m i l l i o n s ) 1 GMt,GNt,GTt ^monetary, non-monetary and t o t a l GDPs during year t (millions of Kenya pounds at constant prices Estimates on the basis of the prefered forecast equations are summarised i n Table 2.6. These prefered estimates indicate that on the assumption that Gross Domestic Product and i t s components w i l l continue growing at the rates p r e v a i l i n g between 1964 and 1975, plywood consumption w i l l increase from approximately 4 m i l l i o n m2 by 1975 to 24-29 m i l l i o n m2 by the end of the 2 centiiry and to somewhere between 127 and 136 m i l l i o n m by 2030AD. This consumption projection indicates an increase i n 2 2 consumption per capita from 0.04m i n 1961 and 0.31m by 1975 2 2 to 0.80-0.95m by the year 2000AQ and approximately 1.7-1.8m * See p. 98 82 -by 2030AD. Fibreboard estimates from the pr e f e r e d p r o j e c t i o n model i n d i c a t e that consumption w i l l increase from approximately 2 . 5 m i l l i o n m2 by 1975 to 2 0 - 3 1 m i l l i o n m2 by the end of the 2 century and 161-376m by 2030AD. Thus, by the end of the century, f i b r e b o a r d and p a r t i c l e b o a r d taken together w i l l more or l e s s equal the consumption of plywood. These estimates 2 represent consumption per c a p i t a of 0.19m (1975), 0.64-1.04m2 (2000AD), and approximately 2.2-5.1m2 by 2030AD. Market share of p a r t i c l e b o a r d i s c u r r e n t l y very small but the use of t h i s product i s i n c r e a s i n g r a p i d l y . Consumption estimates of wood-based products based on re g r e s s i o n equations f o r the aggregates i n d i c a t e that consump-t i o n of these products w i l l increase from approximately 6.6 2 2 m i l l i o n m by 1975 to something between 44 and 61 m i l l i o n m 2 by the year 2000 and w i l l be i n the range of 300-503million m by 2030AD. I f so, consumption per c a p i t a f o r a l l r e c o n s t i t u t e d wood panels w i l l have increased from approximately 0.06m by 1961 and 0.5m2 by 1975 to 1.44 - 1.98 by 2000AD and 4.0 -6.8M2 by the year 2030. P r o j e c t i o n estimates of the aggregate a r e i d e n t i c a l to the sum of i n d i v i d u a l products' estimates. 1. Estimates shown i n F i g u r e s , charts and t e x t - t a b l e s as we as i n the main t e x t are based on p o p u l a t i o n (and pop u l a t i o n components) estimated using v a r y i n g growth r a t e s . Estimates on b a s i s of constant growth r a t e s are given i n Appendix I I . S i m i l a r l y GDPs used i n t e x t , f i g u r e s and t a b l e s are based on 'medium* GDP growth r a t e s . Estimates on b a s i s of 'high' and 'low' GDPs growth r a t e s are given i n Appendix I I T a b l e 2. 6: PROJECTED ESTIMATED CONSUMPTION RANGES FOR WOOD-BASED PANELS (MILLIONS M 2) PANEL PRODUCT PLYWOOD FIBREBOARD/PARTIC-LE /BOARD. 1975 4.3-4.7 (4.2) 2.1-2.3 (2.5) 3,980 6.6- 7.5 3.7- 3.9 1995 9.5-11.0 5.9-7.0 1??0 13.3-15 . 7 9.0-11.9 1995 18.1-21.7 13.4-19.6 2000 24.4-29.2 19.6-31.4 2005 32.6-38.7 28.4-49.2 2010 43.4- 50.4, 4 0 . 7 - 7 5 . 8 2020 76.7- 81.9 81.7-172.5 2030 126.9-135.8 161.0-375.8 TOTAL WOOD-PANELS' ' (SUM) 6.4-7.0 (6.7) 10.3-11.4 15 . 4-18.0 22.3-27.6 31.5-41.3 44.0-60.6 61.0-87.9 84.1-126.2 158.4-254.4 287 . 9-511.6 TOTAL (ESTIMATES f o a g g r e g a t e s ) r 6.6-6.8 (6.7) 10.3-11.4 15.4-18.0 22.2-27.6 31,5-41,2 44,0-60,6 61,0-87,9 84,1-126,2 158,4-254,4 29.6.9-502.7 FAO ESTIMATES ( P l y w o o d ) * 2 .51 3.19 5.20 8.39 ! PLYWOOD FIBREBOARD/PARTI-CLEBOARD TOTAL WOOD PANELS 0.31 0,19 0.50 0.41-0.46 0.23-0.24 0.64-0.71 Per C a p i t a l consumption (M /head) 1.05-1.22 0.98-1.83 2.03-3.05 1.38-1.47 1.47-3.10 .2.85-4.56 1.71-1.83 2.17-5.07 4.01-6.78 0.50-0.58 0.31-0.37 0.81-0.95 0.60-0.70 0.40-0.53 1.00-1.24 0.69-0.83 0.51-0.75 1.21-1.58 0.80-0.95 0.64-1.03 1.44-1.98 0.91-1.09 0.80-1.38 1.71-2.47 /JO * FAO (1970) assumed a c o n v e r s i o n of 1.11m roundwood e q u i v a l e n t to 92 . 94m plywood () A c t u a l ' c o n s u m p t i o n 8 4 . 2 . 2 . 4 ; Sector Demand f o r Wood-based Panels: Before 1969, tea packaging was the major plywood consuming market s e c t o r , w i t h b u i l d i n g and f u r n i t u r e t a k i n g a second p l a c e . Since then, the s t u a t i o n has reversed w i t h the packaging market t a k i n g a second place r o l e i n the t o t a l plywood market. This trend was i d e n t i f i e d i n two separate r e p o r t s ; Putna (1971) and Tomesto Oy F o r e s t r y Consultants (1975) as i n d i c a t e d i n Table 2.7 and g r a p h i c a l l y shown i n Figure 10. This current trend can be expected to continue c o n s i d e r i n g that demand f o r tea packages w i l l depend on tea production and export, which i s f u r t h e r governed by expansion of tea growing areas. Such expansion i s approaching i t s l i m i t s . On the other hand c o n s t r u c t i o n and f u r n i t u r e markets w i l l g r e a t l y expand w i t h i n c r e a s i n g populations and the general c o n s t r u c t i o n sector and p u b l i c works. Table 2.7: S e c t o r i a l d i s t r i b u t i o n of plywood uses ( i n percentages) Sector j 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 B u i l d i n g and f u r n i t u r e 39.3 (39*2) 35.4 (35.3) 34.8 (34.6) 31.6 (31.4) 44.7* (44.3) 51.5* (54.8) 52.1* 51.1* 51.2* 51.6* Packaging (tea) 51.4 (51.2) 56.3 57.0 62.4 42.7* 37.7* 37.5* 39.0* 39.3* 39.1* 9.2 (9.2) (56.1) (56.7) (62.0) (42.2) (31.3) Miscellaneous 8.3 (8.3) 8.1 (8.2) 6.0 (6.0) 12.6* (12.8) 10.8* (12.9) 10.4* 9.9* 9.5* 9.3* Exports** (0.4) (0.3) (0.5) (0.6) (0.7) (0.9) Source: (1) Putna (1971); estimates of 1966-1970 (2) Tomesto Oy F o r e s t r y and Forest Industry Consultants (1975); estimates of 1969-1974 . 85 -* Tomesto Oy F o r e s t r y and Forest Industry Consultants (1975) estimates. Other estimates are based on Putna (1971) ** Exports are net of consumption from d o m e s t i c a l l y processed plywood (imports + l o c a l production -consumption). The f i g u r e s i n parenthesis are (as) percentages of consumption. () Percentage of t o t a l demand (consumption + export) as opposed to percentage of domestic consumption S E M I - L O G A R I T H M I C 7 C Y C L E S X 60 D I V I S I O N S 87 88 * • 90 According to FAO (1976), f u r n i t u r e i s the major market f o r p a r t i c l e b o a r d , and together w i t h c o n s t r u c t i o n account f o r more than 80 per cent i n most c o u n t r i e s , being u s u a l l y i n the order of about 45 per cent each. Transport and other user-markets account f o r the other 2 per cent and 8 per cent, r e s p e c t i v e l y . For f i b r e b o a r d , c o n s t r u c t i o n and housing i s the l a r g e s t s i n g l e user market i n the world accounting f o r about 45 per cent of a l l f i b r e b o a r d consumed, while other markets are roughly f u r n i t u r e 20 per cent, packaging and t r a n s p o r t 5 per cent and other users (miscellaneous) 30 per cent (FAO 1976). In most co u n t r i e s the c o n s t r u c t i o n f i b r e b o a r d markets are roughly 60-75 per cent i n s u l a t i o n board (softboard) and 25-30 per cent hardboard. The r e l a t i v e p r o p o r t i o n s of f i b r e b o a r d consumed i n Kenya were estimated by Putna and Espersen (1971) at approximately 55 per cent hardboard, 35 per cent softboard and 10 per cent f o r others ( u n s p e c i f i e d ) . Estimates f o r Uganda and Tanzania, both Kenya's p a r t n e r s i n E . A f r i c a n Community were s i m i l a r : Uganda (44 per cent, 51 per cent, 5 per cent) and Tanzania (66 per cent, 32 per cent and 2 per c e n t ) . To what extent the d i f f e r e n t wood based panels w i l l s u b s t i t u t e each other or be" s u b s t i t u t e d by other m a t e r i a l s i n f uture i s d i f f i c u l t to p r e d i c t . However, i t i s w e l l known that product s u b s t i t u t i o n i s more intense i n a slowly expanding or stagnant market; on the other hand, product s u b s t i t u t a b i l i t y and market c a n n i b a l i z a t i o n among supplemen-t a r y or complimentary but competative products i s l a r g e l y dependent on the market s o p h i s t i c a t i o n and decreases w i t h 91 -market expansion, development and s p e c i a l i z a t i o n as there i s a tendency to s h i f t from general commodities to s p e c i a l t y products .(Rich 1970) . Kenyan markets' f o r w o r l d p r o d u c t s a r e s t i l l undeveloped,by world standards,and there i s great p o t e n t i a l f o r expansion and s p e c i a l i z a t i o n i n f u t u r e ; hence i t i s u n l i k e l y that lumber and the d i f f e r e n t r e c o n s t i t u t e d wood panels w i l l e i t h e r s u b s t i t u t e each other or be s u b s t i t u t e d by other products on a s i g n i f i c a n t s c a l e . This premise does not r u l e out some s u b s t i t u t i o n on the b a s i s of comparative p r i c e s , but s t i l l wood products are, and are l i k e l y to remain, cheaper than most other l i k e l y s u b s t i t u t e s such as p l a s t i c s and metals, of which the country i s po o r l y endowed w i t h both the base resources and technology. FAO (1970) observed that i n Kenya, despite l a r g e increases i n p r i c e s over the years, m i l l s have never found d i f f i c u l t i e s i n d i s p o s i n g o f a l l t h e i r wood products, a s i t u a t i o n l i k e l y to p e r s i s t f o r a long time to come c o n s i d e r i n g the ra t e s o f growth of p o p u l a t i o n , i n d u s t r y , s e r v i c e s and other major sectors of the economy. - 9 2 2.3 PAPER PRODUCTS Paper and paper products are u s u a l l y c l a s s i f i e d according to t h e i r use such as newsprint paper, wrapping and packaging paper, w r i t i n g and p r i n t i n g paper, board paper and s a n i t a r y paper. A second c l a s s i f i c a t i o n i s i n t o one of two broad u t i l i t y c a t e g o r i e s : c u l t u r a l papers (newsprint, w r i t i n g and p r i n t i n g ) and i n d u s t r i a l papers (packaging and wrapping, paperboards and other types that are^'p^iinarly . i jpj ;^.industrial u s e ) . The d i f f e r e n t c l a s s e s and uses are more r e f i n e d and s p e c i f i c i n a developed market, but o f t e n tend to overlap i n a l e s s developed market where one paper product or type may be used f o r more than one purpose. I t i s :very common i n l e s s developed c o u n t r i e s to f i n d newsprint and w r i t i n g papers being used f o r wrapping and packaging purposes; such markets have high incidence of paper r e c y c l i n g . " 2 . 3 . 1 Domestic production: Before the f i r s t i n t e g r a t e d pulp and paper m i l l was b u i l t ' i n Kenya, and s t a r t e d production i n 1974/75, there was only one small paper m i l l producing paperboard from r e c y c l e d paper waste, at an annual output of about 3,000 metric tons. Thus almost a l l of the country's requirements (approxima-t e l y 21,300 m.tons by 1960 and 74,000m.tons by 1973) were met from imports (see Appendix I , Table 1.6 and 1.7). Since 1974, the Pa n a f r i c a n Pulp and Paper M i l l s has b u i l t up i t s production to i t s scheduled c a p a c i t y of 45,000m.tons paper/year: 719m.tons (1974), 25,100m.tons (1975) and 41,000m.tons (1976). During the same p e r i o d , Kenya \ paper m i l l s , which produces paper from r e c y c l e d paper waste increased i t s production from 3,300m.tons i n 1974 to 93 4,100m.tons i n 1975 and 5,200 m.tons i n 1976. P a n a f r i c a n Pulp and Paper M i l l s i s planned to expand i t s p r o d u c t i o n to about 100,000 m e t r i c tons o f paper by the begin n i n g of 1980s. 2.3.2 Markets and consumption o f paper and paper products Past trends i n consumption of paper and paper products show very r a p i d i n c r e a s e s p a r t i c u l a r l y i n consumption of i n d u s t r i a l papers. Between 1958 and 1974, consumption of t h i s group o f papers i n c r e a s e d from l e s s than 10,000 m e t r i c tons to 60,000 m e t r i c tons or a growth r a t e o f about 12.17 per cent per annum. Consumption of C u l t u r a l papers i n c r e a s e d at a l e s s e r r a t e of 8.42 per cent per annum, (of which, newsprint 8.03 per cent and w r i t i n g and p r i n t i n g papers 9.35 per cent) from about 6,000 m e t r i c tons (1958) to 21.5 m e t r i c tons (1974). The o v e r a l l growth f o r paper consumption was about 11 per cent ( F i g u r e 11) Lara :'80i -60 4 4 Cut ,.L r 3 • -O -{£>, 1. i - E - i • T 2 ' 0 _L 1 T a t a 1 paper . and 7J-ji~fpa-g) e r bo a r d s . . . . . . ' 1 i • t - | - p - r ?. ! 1 1 ' ' • ; " 11 ..Ind¥strial"rpapers " I" ! -I..!. I i-i ; . j p ^ i U ^ v j r l ' t i n g ' arid \ p r i n t i n g p a p e r s ' r\ ; •; \-\ [•*• \ j'<•''''' i I \ r\ ; i'j'f r! r -h T";.' r \: f T " t" T Ne w sp r i n t _ l [_L - i - 1 . . . . . . .... .L'.fl i < T 'fbVTT i f ) 6 0 65~~~" 7/0, • 7'5' ' 80' : • • ' i "" I ' i ' ; : . . . . . ^ . . . . ( . . . . . , . . | F i g u r e 11: • Consumption•• o f paper and pa p e r b o a r d ' i n Kenya 1956-75 94 -The p o t e n t i a l and a c t u a l consumption of papers must have been higher than the data i n d i c a t e c o n s i d e r i n g the high incidence of paper r e c y c l i n g i n use i n the whole country. Old newspapers, some magazines and p r i n t i n g papers such as computer p r i n t - o u t s have a l u c r a t i v e and ready market i n the r e t a i l trade business sector where they are re-used as wrapping m a t e r i a l . An estimate of 80-90 per cent of a l l newspapers as the p r o p o r t i o n r e c y c l e d i n use f o r wrapping purposes would be a reasonable one. When other types of r e c y c l e d papers are taken i n t o account, an a d d i t i o n a l wrapping paper supply equivalent to the t o t a l newspaper supply i n a year can be estimated i n a d d i t i o n to the o f f i c i a l l y recorded data. This i s about 7-10 per cent of the i n d i c a t e d apparent consumption of a l l paper and paperboard. Furthermore the wrapping and packaging papers produced or imported i n t o the country are used s e v e r a l times before they can be discarded as u n s e r v i c a b l e . Since paper r e c y c l i n g i s a market fea t u r e that can be expected to p e r s i s t f o r a long time i n f u t u r e c o n s i d e r i n g the ever r i s i n g p r i c e s o f paper, estimates of f u t u r e net requirements can s a f e l y be p r o j e c t e d on the bases of past net demand,disregarding that demand met from i n t e r n a l r e c y c l i n g of used paper. Since 1963, there has been a: r a p i d growth i n consumption of i n d u s t r i a l and w r i t i n g papers, an aspect a t t r i b u t a b l e to the f a s t growth i n i n d u s t r i a l and commercial a c t i v i t i e s and the upsurge of the Harambee ( s e l f help) movements i n both education, community and s o c i a l s e r v i c e s , that followed independence. Apart from the peoples' Harambee i n i t i a t i v e s there were government programmes f o r expansion of education, government-managed s o c i a l s e r v i c e s , 95 -c i v i l s e r v i c e a n d a d m i n i s t r a t i o n J a l l f a c t o r s r e s p o n s i b l e f o r i n c r e a s e d c o n s u m p t i o n o f w r i t i n g a n d p r i n t i n g p a p e r s . B e t w e e n 1 9 6 0 a n d 1 9 7 4 , p r i m a r y s c h o o l s i n c r e a s e d f r o m 5 , 2 0 6 t o 7 , 6 6 8 a n d s e c o n d a r y s c h o o l s f r o m 9 1 t o 1 0 2 9 w h i l e e n r o l m e n t i n c r e a s e d f r o m 7 8 1 , 3 0 0 t o 2 , 7 3 4 , 4 0 0 a n d 2 0 , 1 4 0 t o 1 9 5 , 6 7 0 f o r t h e t w o c a t e g o r i e s r e s p e c t i v e l y . D u r i n g t h e s a m e p e r i o d , t h e t e a c h i n g f o r c e i n c r e a s e d f r o m 2 0 , 2 0 0 t o 6 4 , 7 5 0 . F u t u r e g r o w t h o f c o n s u m p t i o n w i l l l a r g e l y b e i n f l u e n c e d b y g o v e r n m e n t p o l i c i e s o n e d u c a t i o n , i n d u s t r y a n d c o m m e r c e a n d w i l l c l o s e l y f o l l o w t h e g e n e r a l e c o n o m y a s w e l l a s t h e i n s t i t u t i o n a l a n d s t r u c t u r a l c h a n g e s i n t h e p o p u l a t i o n . A s a l a r g e r p r o p o r t i o n o f t h e p o p u l a t i o n m o v e s f r o m t h e l o w e r i n c o m e t o h i g h e r i n c o m e g r o u p s , c o n s u m p t i o n o f p a p e r p e r c a p i t a w i l l r i s e . C u r r e n t l y , a p o l i c y o f i m p o r t - s u b s t i t u t i o n i n d u s t r i -a l i z a t i o n i s i n f o r c e a n d i f p u r s u e d i n f u t u r e , c o u p l e d w i t h e x p o r t - o r i e n t e d p r o d u c t i o n , i t w i l l i n e f f e c t i n c r e a s e c o n s u m -p t i o n o f i n d u s t r i a l p a p e r , ••; ar l i k e l y t r e n d . 2;,.3.3 P r o j e c t e d c o n s u m p t i o n e s t i m a t e s f o r d i f f e r e n t t y p e s  o f p a p e r " F o r t h e p u r p o s e o f t h i s s t u d y p r o j e c t i o n e s t i m a t e s a r e m a d e f o r p a p e r s g r o u p e d i n t o t h r e e c a t e g o r i e s : n e w s p r i n t , w r i t i n g a n d p r i n t i n g , a n d i n d u s t r i a l p a p e r s . S i n c e e a c h p a p e r c a t e g o r y h a s m o r e o r l e s s a d i s t i n c t u s e r - m a r k e t ( d i s r e g a r d i n g u s e - o v e r l a p f o r r e c y c l e d p a p e r a s d e s c r i b e d e a r l i e r ) , c o n s u m p t i o n f o r e c a s t i s m a d e f o r e a c h c a t e g o r y s e p e r a t e l y a n d f o r a l l p a p e r a n d p a p e r b o a r d i n a g g r e g a t e . S i n c e n o d a t a w e r e a v a i l a b l e f o r s a n i t a r y a n d t i s s u e p a p e r , t h i s c a t e g o r y i s n o t d e l i n e a t e d f r o m o t h e r p a p e r s a l t h o u g h i t i s h e r e a s s u m e d t h a t t h i s p a p e r g r o u p i s c o v e r e d u n d e r ' o t h e r p a p e r p r o d u c t s ' i n t h e E a s t A f r i c a n t r a d e s t a t i s t i c s ( E . A f r i c a n C u s t o m s a n d 96 -Excise Trade Report 1975). In this study 'other paper products' are grouped together w i t h w r i t i n g and p r i n t i n g paper. P r o j e c t i o n estimates based on d i f f e r e n t p r o j e c t i o n models are given i n Appendix I I , Tables 11.11 - 11.14 and summarised g r a p h i c a l l y i n Figures 12-15. Estimates from the pre f e r e d p r o j e c t i o n models are summarised i n Table 2.8 and 2.9. Using the c r i t e r i a of i n d i c a t e d c o r r e l a t i o n c o e f f i c i e n t s , backward and forward f o r e c a s t e x t r a p o l a t i o n w i t h the various models and comparative g r a p h i c a l curves, the double-logarithmic consumption models as f u n c t i o n s of t o t a l p o p u l a t i o n , t o t a l GDP, per c a p i t a GDP and time are found to give b e t t e r p r e d i c t i v e estimates i n case of paper consumption than e i t h e r the l i n e a r or the semi-logarithmic models. In c o n t r a s t t h e ' d i s a g g r e g a f e d , components of po p u l a t i o n (urban and r u r a l ) and GDP (monetary and non-monetary) are found to be poor consumption p r e d i c t i o n v a r i a b l e s i n the case of papers. Estimates of f u t u r e consumption of papers are based on equations, given i n Table 2.8, which have been chosen from a l l those estimate models tried,(Appendix I I , Tables 11.11 - 11.14), as g i v i n g the most probable range of consumption q u a n t i t i e s ; T a b l e 2 . 8 : The p r e f e r e d e q u a t i o n s f o r p a p e r  c o n s u m p t i o n e s t i m a t e s : N e w s p r i n t ( a c t u a l )  L o g N P 0 1 t = - 1 0 1 2 . 9 0 2 + 1 3 3 . 7 3 8 l o g t ( R 2 = 0 . 8 0 3 2 9 , S E = 0 . 1 6 3 1 ) * l o g N P 1 0 t » - 8 . 4 8 4 - 2 . 6 7 71ogPT t. + 2.6321o{-GT t ( R 2 = 0 . 8 4 1 7 2 , S E = 0 . 1 2 2 9 ) l o g h - P 1 3 t - - 8 . 4 9 6 + 2 . 6 8 9 1 o g ( G T / P T ) t ( R 2 » 0 . 8 4 1 7 2 , S E - 0 . 1 4 1 8 ) MP:iO - 6 . S G 0 - 1 . 6 9 0 P T t + 0.361GT ( R 2 = 0 . 3 2 9 9 2 , S E ° 0 . 7 S 2 7 )  W r i t i n g and P r i n t i n g p a p e r s f a c t u a l )  l o g W P O l - - 1 3 3 4 . 8 7 7 + 1 7 6 . 2 8 9 1 o g t ( R 2 » 0 . 9 4 8 8 1 , S E = 0 . 1 0 2 6 ) l o g K P I O - - 4 . 0 9 & + 2 . S 6 0 1 o g P T ' t + 0 . 0 S 2 S k i g G T t ( R 2 = 0 . 9 5 6 2 0 , S E - 0 . 0 9 8 5 ) l o g W P 1 3 - - 1 0 . 4 7 9 + 3 . 4 3 0 1 o g ( G T / P T ) t ( R Z " D . 9 2 5 4 6 , S E - 0 . 1 2 3 3 ) . I n d u s t r i a l p a p e r s f a c t u a l )  l o g I P 0 2 = - ) 4 G 0 . 4 5 4 + 1 9 3 , 0 1 3 1 o g t 1 ( R 2 = 0 . R 8 7 8 0 , S E - 0 . 1 7 1 9 ) l o g I P l f ) — 7 . 723-1 . 2 4 3 1 o g P T t + 2 . 3 3 6 1 o g G T t * (R 2 <=0.86766, S H - 0 . 1 9 3 7 ) l o g I P 1 3 = - 1 0 . 3 9 S + 3 . 7 S 0 1 o g ( G T / P T ) . V ( R 2 ° 0 . 8 6 3 4 6 , S E ° 0 . 1 S 9 6 )  A l l p a p e r and p a p e r b o a r d ( a g g r e g a t e ) ( a c t u a l )  l o . g P B 0 2 - - 1 3 8 9 . 8 1 9 + 1 8 3 . 7 4 7 1 o g t * ( R 2 = 0 . 9 4 6 9 2 , S E - 0 . 1 0 9 0 ) l o g P B 1 0 * - 6 . 1 3 9 - 0 . S 0 8 1 o g P T t + 1 . 8 4 7 1 o g G T t 1 ( R 2 = 0 . 9 3 3 4 2 , S E - 0 . 1 2 6 6 ) l o g F B 1 3 » - 9 . 4 1 3 + 3 . S 8 0 1 o g ( G T / P T ) Z ( R 2 " 0 . 9 2 5 9 9 , S E ° 0 . 1 2 8 7 )  ESTIMATES (000 METRIC TONS) I 9 6 0 |l970'[1974 1980J2000 J2010 T I . 2 . 5 2 . 6 2 . 6 2 . 6 4.-9 4 . 6 4 . 9 4 . 8 JA\ J>_._5_ 5 . 5 | 6 . 5 4 . 7 4 . 7 4 . 4 6 . 0 6 . 0 6 . 1 9 . 4 1 3 . 1 1 5 . 2 1 6 . 1 6 . 1 1 1 . 2 1 2 . 1 1 0 . 3 1 6 . 0 4 3 . 0 4 0 . S 3 9 . 5 3 6 . 9 1 6 . 0 1 7 . 3 1 4 . 2 9 . 8 8 . 9 8 . 9 1 0 . 2 2 7 . 3 2 9 . 4 2 3 . 4 3 7 . 5 3.7.9 3 8 . 0 5 5 . 2 119 73 84 84 20201 2030 6 0 . 0 J 59.91107.7 5 6 . 9 5 2 . 5 9 9 . 7 9 0 . 9 1 6 0 . 5 1 6 0 . 2 1 4 8 . 3 142 195 196 249 387 361 410 928 793 H97 7 4 9 . 1 7 0 3 . 8 6 8 3 . 3 1962!5113j 13262 276 472 474 503 2215 1700 3701 19615624! 16570 2074i670d 23031 i I I i 9 6 0 ! 19701197"4l 1930l 20O012O1O12020I2O50 2 1 . 3 5 9 . 5 8 1 . 5 2 2 . 5 57. 2I S 3 . 1 2 3 . 8 2 3 . 7 5 6 . 6 5 2 . 2 SO.6 7 3 . 1 1 4 5 . 1 1 3 7 . 9 1 2 3 . 5 9 1 9 . 6 8 7 5 . 9 8 4 7 . 1 2.3 on 2276 2445 5,724 6,023 7495 14,183 16207 24.34 3 c = Newsprint 0.69E-03 0.95E-05 0.11E-05 0.14E-04 Writing- Papers 0. 69E-05 - -0.1E-07 0.1E-07 ••• where: NP(i) t > WP(i)t IP(i) t and PB(i) t log" t • natural logarithm (In) estimated consumption of newsprint, writing and printing paper, industrial paper and all categories of paper and paperboard during year t (000 metric tons) PT r GT 7 * W i SE -the actual year eg. 1976; this is explained under methodology in chapter 1) • total population and total GDP estimated for year t coefficient of determination and standard error of estimate respectively NB: 1. 2. * 3. a 0. 4E-03 . 0. 294E-01 0. OE-04 0.3993 0. OE-04 0. 886E-01 0.OE-04 . The estimates given here are based on assumption of medium (current) GDP growth rate and the assumed varying (declining) population growth rate. Estimates based on other alternatives are given in Appendix II, Tables 11.11 - 11.14. . ' See Table 2.9 for a summary of estimated consumption range. Note the regression coefficient statistics (Overall F-Probabilities and partial F-Probabilities of a, b +bj^ +bQXt b„ etc.) of consumption C. C = a ( N=I6 ): 0. 7E-03 0.410 OlOE-04 0.3322 -0. OE-04. 0. 219-9 0. OE-04 Industrial Papers"' 0. 56E-05 0.OE-04 0.1521 0.1422 ,0.9163 0. 4E-07 0.7E-07 All Papers 0.3E-07 . 0. 9E-07 0.1E-07 ' 0. 72E-01 0. OE-04 0. OE-04 0.514E-01 0. OE-04 + b l X l 0.OE-04 0.3461 0. OE-04' 0. OE-04 0.8258 0. OE-04 +h2X2 0.1637 0. 2273 i VO CO I Despite a highly significant overall F-Probability, the partial statistics of coefficients are indicated as insignificant where population and GDP are used together as independent variables. This anomally is observed for the different products. The probable .explanation is that each of the two variables or their components are highly correlated to consumption of wood products and taken together, the additional contribution of each variable can be considered insignificant. This is evident from the correlation coefficients of multiple determination (R2) and correlation coefficients given in correlation matrix (Appendix II). Normally an F-probability greater than OrOS is considered to be not statistically ..significant, at the 95% level of confidence. 99 ljDOOOOO FUNCTIONAL VARIABLES JUNCTIONAL MODEL Urban Pop. + R u r a l Poo. Monetary GDP non-monetary GDP T o t a l Pop. + T o t a l GDP Per. C a p i t a (GDP) Time (trend) 2020 2030 1960 1970 I960 1990 2000 2010 FIGURE 12: Newsprint consumption p r o j e c t i o n estimates based on al t e r n a t forecasting models lpoopoo FUNCTIONAL VARIABLES FUNCTIONAL MODEL Linear Semi-Log [Urban Pop. '. + Rural Pop. Monetary GDP non-monetary GDP - t>—>—t-. . <=-•• -us-Total fop. + Total GDP Per. Capita (GDP) Time (trend) ~- - -+ T T 1" + - r , - t - ' - - *- • --L-: 1 : I960 1970 1980 1990 2000 2010 2020 FIGURE 13: P r i n t i n g and Writing paper; consumption p r o j e c t i o n using a l t e r n a t i v e forecasting molels. 101 196TT T 5 7 D " TWO" TOTCT TTjrj.O FIGURE 14: I n d u s t r i a l paper, consumption p r o j e c t i o n estimates based on a l t e r n a t i v e forecasting models. \ \ 102 1990 2000 2010 I960 1570 1980 FIGURE 15; consumption p r o j e c t i o n estimates oc a l l papers (aggregate) b on a l t e r n a t i v e forecasting models. Table 2.9; PROJECTED ESTIMATES OF PAPER CONSUMPTION RANGE (000 M e t r i c tons) Ca) 22 . 9-23.7 (21.3) 22.5-235 (21.3) 1960 19 74 2 . 5-2 . 6 6 .0-6.5 (3.2) 4 . 6-4 . 9 (4.9) (5.5) 14.2-17.3 (16.0) 7 .1-7.5 (8.1) 20.2-23.8 (21.5) 15.8-16-1 52.5-59 . 9 (13.2) (60.0) 1980 8.9-10. 2 23.4- 29. 4| 32 ,3-39, 6 90.9-107.7 72 . 7-83 . 7(113 . 2-147 . 3, (81.5) 73.1-83.1|123 . 5-145. l | (81.5) 1985 12.6-15.8 36 .3 - 45.3 48 .9- 61.1 146.6-175,2 195.5-236.3 194.9-230.6 1990 18 .0 - 24.3 5 7 . 1 - 69.4 75.1- 93.7 240 .7- 284,7 315 .8- 378.4 312.8-366.2 1995 25.9-36.9 91,3-105,8 117.2- 142.7 402,1^462,1 519 .3 - 604,8 510.6-580,6 2000 37,6-55.2 148,3-160.5 185.9-215.1 683,3^749.1 86 9.,2964.S 847,1-^19.6, 2005 5 2.5-81,7 ,241,1-249.,3 29.3 .6-331,0 1170,4^1213.0 2010 73.3-119..4 360, 9.-409 ,^3 434,2^5-28,7 19J61, 0-2073.71 0.464 ,0^1544.0 2393 , 2-2602.7 1408 ,6^14549 2276,0-2444^ •2020-142.3-248.5 79.2.6-119.7,3 9.34,9.^14 45.8 5113.0T6705.ISJ 6047 . 9.T8151.4.I I 5723 .5-749-5.4J 2030-275.5-502. 6 1699.-7-3701.1 19.75. 2^4203 , 7 13262 , 2-23O30-5" 15237 .4-27034-2 14183 . 2-2434-Z:? o FAO ESTIMATES C u l t u r a l I n d u s t r i a l . T o t a l 24,0* 45 . 0* 69.0* 37.0 69.0 106.0 81.0 150.0 230.0 160.0 2 9.0. 0 450.0 Source: (1) Appendices (2) FAO (1970) () A c t u a l consumption * Estimates for year 1975 (a) The range i s def ined by the lowest and highest est imates in a year for the 3 or 4 equit tons chosen, which means that other estimated values are wi th in the range. In almost a l l cases , up to 2Q00AD, th.e trend s er i e s and per c a p i t a func t ion est imates form the upper and lower range l i m i t s r e s p e c t i v e l y and change p o s i t i o n s beyond then. Estimate values by aggregates of pop, and GDP f a l l between the two. - 104 -j-2.3.3.1 C u l t u r a l papers : The p r o j e c t e d consumption estimates f o r newsprint show increases from approximately 6,000 m e t r i c tons by 1974 to somewhere i n the range of 8,000 - 10,000 metric tons by 1980 and 37,000 - 55,000 metric tons by 2000AD,and r i s i n g to 276,0:00 - 503,000 metric tons by 2030AD. On the basi s of these estimates, per c a p i t a consumption would be 0.55 - 0.63 kg (1980), 1.23 - 1.80 kg (2000AD) and 3.7 - 6.8 kg by 2030AD, having r i s e n from approximately 0.39 kg i n 1960 and 0.67kgin 1975. For w r i t i n g and p r i n t i n g paper, the increase i n consumption i s p r e d i c t e d to be even more r a p i d , i n c r e a s i n g from approximately 5,000 me t r i c tons i n 1960 equivalent to 60.5 per cent of a l l c u l t u r a l papers,to 23-29 metric tons by 1980 (72.6 - 74.2 per c e n t ) , and r i s i n g to the range of 148 - 161 metric tons by the year 2000AD (approximately 80 per cent) and 1.7 - 3.7'mrllion metric tons by the year 2030AD.By t h i s time, t h i s category of paper w i l l form about 87 per cent of c u l t u r a l papers while newsprint w i l l account f o r the other 13 per cent. Although the p r o j e c t e d c u l t u r a l paper estimates are s l i g h t l y higher than FAO ( 1 9 7 0 ) f o r e c a s t s f o r the year 2000AD, (186 - 216 tonnes and 160 tonnes r e s p e c t i v e l y ) , the FAO ( 1 9 7 0 ) e s t i m a t e s w i t h i n t h i s study's estimated ^ranges f o r the p r e c e d i n g p e r i o d . F o r e c a s t estimates by Sundelin (1967), f o r consumption of c u l t u r a l and i n d u s t r i a l papers during the years 1970, 1972 and 1975, turned out comparatively higher than e i t h e r the a c t u a l consumption or the estimate range of t h i s study f o r those years. _ 105 _ On the b a s i s o f the p r e f e r e d p r o j e c t i o n model and on the assumption t h a t the economy w i l l grow a t the medium ( c u r r e n t ) GDP r a t e , p e r c a p i t a consumption f o r w r i t i n g - 1 and p r i n t i n g paper i s e s t i m a t e d t o i n c r e a s e from 0.6:kg (1960), 1.09 kg (1969), and 1.56kg (1975) t o a p p r o x i m a t e l y 1.45 -1.70kg (1980), 4.85 - 5.25kg (2000) and 22.9 - 49.9 kg (2030AD). From the p r o j e c t i o n t r i a l s made under d i f f e r e n t models, i t seems t h a t p e r c a p i t a income has the g r e a t e s t i n f l u e n c e on consumption o f w r i t i n g and p r i n t i n g papers u n l i k e n e w s p r i n t where changes i n p e r c a p i t a GDP and i n aggregates of p o p u l a t i o n i n GDP have r e l a t i v e l y the same e f f e c t / (see Appendix I I , T a b l e s 11.11 and 11.12 compare c o i n . 3 - 1 4 ) 1 . Thus, were economic growth r a t e to r i s e above the c u r r e n t l e v e l s , p r o b a b l e c u l t u r a l paper consumption w i l l be much h i g h e r t h a n t h e s e e s t i m a t e s as p r e d i c t e d by the a l t e r n a t i v e models i n Appendix I I . 1. Column 01 and 02 are time t r e n d e s t i m a t e s , Column 03 and 04 = e s t i m a t e s under h i g h GDP growth w i t h components o f p o p u l a t i o n and GDP;03 = at f i x e d pop. growth R. Column 05 and 06 » e s t i m a t e s under medium GDP growth w i t h components o f pop. and GDP; 05 = a t f i x e d pop. growth R. Column 07 and 08 = e s t i m a t e s under low GDP growth w i t h components of pop. and GDP; 07 = a t f i x e d pop. growth R. Column 09,>.it0' and 11 » e s t i m a t e s w i t h aggregate pop. and GDP; and assumptions o f h i g h , medium and low GDP Column 12, 13 and 14 » e s t i m a t e s w i t h p e r c a p i t a GDP; and assumptions o f h i g h , medium and low GDP. - 106 2.3.3.2 I n d u s t r i a l p a p e r s : As discussed e a r l i e r , consumption of i n d u s t r i a l paper i n Kenya has been much higher than ha'sr c u l t u r a l paper i n the pas t , and consumption growth r a t e Has s i m i l a r l y ; been more r a p i d . As i t i s apparent from the var i o u s p r o j e c t i o n models t r i e d (Appendix I I , Table 11.13), at low income l e v e l s , consumption of t h i s category of papers i s much more responsive to p o p u l a t i o n than GDP changes but,at higher income l e v e l s , consumption i s extremely s e n s i t i v e to economic f a c t o r s and e s p e c i a l l y per c a p i t a GDP. I t i s i n t e r e s t i n g to note that under the l i n e a r f u n c t i o n model, p r o j e c t i o n s with the assumption of low GDP growth rates assume(in some cases)negative consumption trends (App.II, t a b l e 11.13, Column 6-10); whereas w i t h the assumption of high GDP growth r a t e s , changes i n p o p u l a t i o n f o r the same GDP ( i m p l i c i t l y changes i n per c a p i t a income) have extremely l a r g e consumption-boosting e f f e c t s . I t i s worth noting f u r t h e r that w i t h the semi-logarithmic and double-logarithmic f u n c t i o n a l p r o j e c t i o n models, the p o p u l a t i o n v a r i a b l e ' eoef-ficieht'S" a r e - n e g a t i v e . Assuming that economic growth r a t e w i l l continue i n c r e a -s i n g i n both absolute terms and r e l a t i v e to po p u l a t i o n growth, p r o j e c t e d estimates i n d i c a t e l a r g e increases i n consumption of i n d u s t r i a l papers. This w i l l r e s u l t l a r g e l y from requirements f o r packaging of consumer and producer goods as a consequence of increased i n d u s t r i a l and commercial a c t i v i t y and personal disposable incomes. Estimates i n d i c a t e that consumption w i l l i ncrease by growth rates of 10.38 - 11.26 per cent per annum, i n c r e a s i n g 107 -from approximately 60,000 me t r i c tons by 1974 to around 91,000-108,000 metric tons by 1980, 683,000-749,000 metric tons by the end of t h i s cejhtury, and r i s i n g to 13.2-23.0 m i l l i o n tons by 2030AD or an increase of 220-383 times over 55 years from the p r o j e c t i o n base. On the bases of per c a p i t a consumption, the past t r e n d , i n c r e a s i n g from 1.61 kgby 1960 to 4.65 kgby 1974 w i l l r i s e f u r t h e r to approximately 5.65-6.69 kg by 1980, 22.3-24.5 kg by 2000AD and 179-310 kg by 2030AD. This per c a p i t a consumption growth of about 6.7-7.8 per cent per annum compares w e l l w i t h an-average of_513 p e r c e n t p e r annum-estimated, f o r L a t i n American c o u n t r i e s between 1955 and 1975 (FAO 1970). Comparatively average consumption i n L a t i n America has been higher than i n Kenya (4.9kg by 1955, 8.34kg by 1965 and estimated at 13.68kg by 1975 f o r L a t i n America). The average per c a p i t a consumption of i n d u s t r i a l paper f o r most A f r i c a n c o u n t r i e s i s f a r below the average f o r Kenya (Meyer 1973), and th e r e f o r e when viewed from an A f r i c a n context, estimates may seem as i f over-estimated. 2 ._3-. 3 . 3 A l l papers and p a p e r b o a r d ; P r o j e c t e d estimates f o r a l l papers and paperboard cat e g o r i e s as aggregates compare f a i r l y w e l l w i t h the summed estimates of the seperate categories, although the l o n g - t e r m estimates show some estimate-range d i v e r g e n c i e s . One of the obvious reasons i s t h a t the estimated range f o r newsprint consumption f o r e c a s t s i s based on four f u n c t i o n a l equations wh i l e a l l other estimates are on the bas i s of three types of f u n c t i o n a l equations. Another reason i s that s e p a r a t e l y , ' the estimate range f o r w r i t i n g and p r i n t i n g papers has a more pronounced 108 -wider range f o r the d i s t a n t f u t u r e estimates, a f a c t o r g r e a t l y reduced i n the aggregates. Generally aggregates' estimates are s l i g h t l y lower than the summed s e p a r a t e estimates. Estimates of t o t a l paper consumption f o r both aggregates and s e p a r a t e paper c a t e g o r i e s are g r e a t l y i n f l u e n c e by consumption of i n d u s t r i a l papers since they form the l a r g e s t p r o p o r t i o n of t o t a l consumption. Present f o r e c a s t estimates i n d i c a t e that the r e l a t i v e p r o p o r t i o n of c u l t u r a l papers w i l l continue to d e c l i n e , r e l a t i v e to the p r o p o r t i o n of i n d u s t r i a l papers. By 1960, c u l t u r a l papers formed about 38 per cent of a l l papers consumed, a p r o p o r t i o n that had d e c l i n e d to approximately 26 per cent by 1974. P r o j e c t e d estimates i n d i c a t e that t h i s w i l l f u r t h e r d e c l i n e to about 21-22 per cent by the end of the century and approxi-mately 13-15 per cent by the year 2030; at the same time newsprint d e c l i n i n g from 15 per cent by 1960 and 7 per cent by 1974 to approximately 5 per cent and 2 per cent of t o t a l paper products by the years 2000 and 2030 r e s p e c t i v e l y . This propor-t i o n a t e d e c l i n e o f newsprint consumption w i l l be r e l a t i v e to both w r i t i n g and i n d u s t r i a l papers. These trends have important i m p l i c a t i o n s i n the planning of f u t u r e paper i n d u s t r i a l development i n the country and are worth nothing. I t i s probable that beyond the end of t h i s century, the r e l a t i v e economic growth r a t e might be lower than the current one which i s assumed i n these estimates, i n which case, a c t u a l consumptions w i l l be lower than that i n d i c a t e d . On the other hand, however, i t might be that during the p e r i o d between 1980 and somewhere around 2000AD, economic growth rates w i l l be 109 -higher than c u r r e n t l y p r e v a i 1 i n g before slowing down to probably lower than the p r e s e n t l y p r e v a i l i n g . In that case consumptions could be expected to increase more r a p i d l y than projected, and probably such a d e c l i n e of economic growth i n f u t u r e would r e s u l t i n consumptions more or. l e s s s i m i l a r to those estimated here. In the event o f both s t u a t i o n s , these estimates seem the most l o g i c a l i n the end. The production management i m p l i c a t i o n s f o r these expected trends are discussed i n chapter 4. -2.4 ROUNDWOOD OTHER THAN FUELWOOD 2r4.1.1 Power p o l e s , b u i l d i n g poles and fence posts; For the purpose of market a n a l y s i s , 3 markets are i d e n t i f i a b l e f o r these products, namely markets f o r ( i ) power and telephone p o l e s , ( i i ) c o n s t r u c t i o n and housing poles i n c l u d i n g w i t h i e s ( f i t t o ) , and ( i i i ) fence posts. There i s a general l a c k of data on markets and consumption of these products f o r two reasons: (a) The l a r g e r p r o p o r t i o n of market supplies and consumption of these products take place w i t h i n the non-monetary sect o r where there i s v i r t u a l l y no recording of these data. The only data a v a i l a b l e are f o r s u p p l i e s from government-managed f o r e s t s , or l a r g e estates such as East A f r i c a n T a n n i n E x t r a c t Company. (b) There has been no study undertaken before to determine e i t h e r s u p p l i e s from p r i v a t e sources or consumption i n r u r a l housing and fencing (to the best knowledge of the a u t h o r ) ; despite the - 110 f a c t t h a t p r i v a t e f i r m s and w o o d l o t s are the main s u p p l i e r s , and r u r a l households and a g r i c u l t u r a l s e c t o r the main consumers o f p o l e s and f e n c e p o s t s . A d e t a i l e d s u p p l y and consumption s u r v e y has however been c o n s i d e r e d as b e i n g beyond the scope o f t h i s s t u d y , and hence the s t u d y has c o n c e n t r a t e d on s u p p l i e s }and consumption o f p o l e s and p o s t s from p u b l i c managed f o r e s t s . One o b s e r v a t i o n , however, i s w o r t h n o t i n g , , t h a t a l t h o u g h t r a d i t i o n a l l y p r i v a t e a g r i c u l t u r a l farms and w o o d l o t s have been the major s u p p l i e r s o f p o l e s and p o s t s , r e c e n t t r e n d s i n l a n d r e g i s t r a t i o n and. c o n s o l i d a t i o n r e s u l t e d i n a g g r e s s i v e l y i n t e n s i f i e d f o o d - c r o p and l i v e s t o c k f a r m i n g which has a l m o s t c o m p l e t e l y d i m i n i s h e d wood s u p p l i e s from t h e s e s o u r c e s . The d i s a p p e a r a n c e o f communal wo o d l o t s and l a n d s u b - d i v i s i o n i n t o s m a l l i n d i v i d u a l -owner's p i e c e o f l a n d , on which th e s m a l l h o l d e r has t o i n t e n s i f y p r o d u c t i o n o f f a m i l y f o o d i n a d d i t i o n t o market c a s h - c r o p s , have r e s u l t e d i n p r o g r e s s i v e l y dwindlingwooded a r e a s qn many farms. For t h e s e r e a s o n s , most o f t h e h o u s e h o l d s , i n s t i -t u t i o n s and f i r m s a r e now t u r n i n g t o public-managed f o r e s t s and w o odlots f o r s u p p l i e s o f h o u s i n g , c o n s t r u c t i o n and f e n c i n g m a t e r i a l s . I t can be s t a t e d w i t h j u s t i f i c a t i o n t h a t t h e i n c r e a s e s o b s e r v e d i n demand f o r p o l e s and p o s t s from p u b l i c f o r e s t s and w o odlots are not e n t i r e l y due t o market e x p a n s i o n i n t h e c o u n t r y , but p a r t l y due t o s h i f t i n d e m a n d j o r i g i n a l l y s e r v e d by p r i v a t e s u p p l i e r s . An e x a m i n a t i o n o f c o e f f i c i e n t s o f c o r r e l a t i o n shows t h a t t h e s e c o e f f i c i e n t s a r e h i g h e r f o r : r u r a l t han urban p o p u l a t i o n s , non-monetary t h a n monetary GDPs, I l l -and per c a p i t a than e i t h e r t o t a l p o p u l a t i o n or t o t a l GDP or t h e i r r e s p e c t i v e components. This observation i s f u r t h e r supported by a comparison of consumption trends and the b u i l d i n g a c t i v i t y i n the monetary se c t o r (which i s more as s o c i a t e d w i t h the urban s e c t o r than the r u r a l s e c t o r ) . HvThis comparison i s g r a p h i c a l l y depicted i n Figure 16. From the f o r e g o i n g , i t seems that the major markets f o r b u i l d i n g poles and fence posts, (from a l l sources),, are i n the r u r a l areas. The r e l a t i v e l y low growth f o r consumption of b u i l d i n g poles can'probably-be a t t r i b u t e d to s u b s t i t u t i o n by sawnwood. A feature of r u r a l housing i s a gradual s h i f t from the t r a d i t i o n a l huts and simple houses to more permanent sawnwood-built houses. This can be a t t r i b u t e d to r i s i n g l i v i n g standards i n a d d i t i o n to s c a r c i t y of the t r a d i t i o n a l l y abundant roundwood. Due to t h i s s c a r c i t y , the cost of these poles and the high t r a n s p o r t costs make them j u s t as expensive as processed wood f o r most consumers other than t h o s e near the supply sources. In the p a s t , s u p p l i e s of b u i l d i n g poles from p u b l i c f o r e s t s have averaged between 5,000 and 8,000 m3 per year. Demand f o r fence posts has c l o s e l y followed that of b u i l d i n g p o l e s . This i s not unexpected since,other than c o n s t r u c t i n g fences around newly constructed b u i l d i n g s , the other market i s farm f e n c i n g . The need f o r farm f e n c i n g i s dependent l a r g e l y on land s u b - d i v i s i o n s . These are r a t h e r infrequent and hence only form a small segment of the whole market,which i s dominated by housing, which i n turn i s i n f l u e n c e d by household formation and mi g r a t i o n ( e s p e c i a l l y from r u r a l to the urban a r e a s ) . The. p r o p o r t i o n of. f e n c e p o s t s used f o r replacement i s r a t h e r too small compared to new works since most woods used f o r fencing are f a i r l y durable. Apart from some d e c l i n e s during the middle of 1960s,, when sup p l i e s averaged 2,000m per year, demand f o r fence posts 3 from p u b l i c f o r e s t reserves rose from about 1,500m i n 1967 to 8,300m3 by 1975, a l e v e l s t i l l lower than the pre-1960 l e v e l of more than 10,000m per year, and s l i g h t l y l e s s than the volume of b u i l d i n g poles (Appendix I , Table 1.8). Power and telephone poles form the l a r g e s t p r o p o r t i o n of a l l roundwood,(other than fuelwood), purchased from p u b l i c f o r e s t s e r v i c e s , r i s i n g from approximately 7,000m3 by 1960 to purchases of 20,000 - 25,000m3 per year between 1970 and 1975. Government-managed f o r e s t s u p p l i e s have been the major sources of t h i s category of p o l e s , s u p p l i e d from eucalypt p l a n t a t i o n s . U n l i k e the housing and c o n s t r u c t i o n i n d u s t r y , the power and telecommunications sectors are extremely s e l e c t i v e i n t h e i r choice of p o l e s , w i t h s p e c i f i c dimensional, p h y s i c a l and other q u a l i t a t i v e requirements!.' T h i s i s one reason why. t h i s p r oduct-market'has r e l i e d so h e a v i l y on s u p p l i e s from F o r e s t . Department-managed f o r e s t s , f o r c o n s i s t e n c y o f q u a l i t y . The trend f o r demand of b u i l d i n g , power and telephone poles and fence posts has i n the past c l o s e l y f o l l o w e d the trend f o r the power and telephone p o l e s , the major component. Demand f o r power and telephone poles c l o s e l y f o l l o w s the trend i n p r o v i s i o n of e l e c t r i c i t y and telephone s e r v i c e s i n ttee r u r a l areas; t r a n s m i s s i o n of these s e r v i c e s w i t h i n the 113 -urban areas i s mainly by underground c a b l e s . T h i s i s another f a c t o r t h a t may e x p l a i n the r e l a t i v e l y c l o s e r e l a t i o n s h i p (observed i n c o r r e l a t i o n matrix - App.II, Ta b l e II.2) between purchases of p o l e s and r u r a l p o p u l a t i o n component and the non-monetary GDP component. 112. „4;i E'tt 2s Mangrove pp l e s : Mangrove pole s have a d i s t i n c t market i n that t h e i r occurence and use are r e s t r i c t e d to the c o a s t a l areas. The main markets are h o u s i n g r i n the c o a s t a l r e g i o n and exports to the P e r s i a n G u l f i Most of the mangrove f o r e s t s are w i t h i n the j u r i s d i c t i o n o f the F o r e s t Department and thus s a l e s data a v a i l a b l e f o r mangrove pole s are f a i r l y d e s c r i p t i v e of the market, although some s u p p l i e s and s a l e s from a few p r i v a t e mangrove areas escape the r e c o r d s . Since the export market i s such an important component of t o t a l market f o r mangroves, demand can l o g i c a l l y be c o n s i d e r e d as an aggregate o f the two components. Consumption (both l o c a l and export) has i n c r e a s e d from about 0.5 m i l l i o n p o l e s a t the b e g i n n i n g o f the 1960s t o over 1 m i l l i o n p o l e s per year d u r i n g the f i r s t h a l f o f the 1970s d e s p i t e a n a p p a r e n t d e c l i n e _ _ i i n exports_."d_uring t h e l a t e 1960s. .' -(Se,e_>Ap'p'. 1, T a b l e 1.8).- Demand growth r a t e , l i k e t h a t o f o t h e r types o f poles, seems to have been f a i r l y modest, depending on c o a s t a l p o p u l a t i o n growth and export p o t e n t i a l f a c t o r s . - I 14- -; B u i l d i n g (OOQ Sq.M.) - 400 •: -3 c o 2pr> I : . I FIGURE 16: Comparison o f trends J. .':—4 _!... i n the urban b u i l d i n g ; Sector and demand j . , . . . f o r poles.. :.. : j;__L | 1 ; .j . • j I i I : ! "N ! .Tota.1 j \..:r ' [ ! t j - J I j-I^o'ies---L.:.J—go 1 ' Ho .1 ; ! So 10 10 i I ! 77 7 A -A \ - Power P o l e s B u i l d i n g Poles Fence Posts •96o 1965 1975 - i i t> -1000) ODOM ! I . ' j ••!,!'•! -!-;- i •-! I r a n a ( A c t u a l ) ; — r r ! c-a+bt 1 . . - —: | • • •FIGURE 17; Trend in demand for mangroves, Poles and prsta. - 116 2.4.2. Demand p r o j e c t i o n estimates f o r roundwood: ...2.4.2.1 Poles and fence posts: Most of the consumption-predicting models a p p l i e d f o r • ' o t h e r f o r e s t products were found u n s u i t a b l e i n p r e d i c t i n g consumption f o r the d i f f e r e n t c a t e g o r i e s of roundwood. Consumption estimates based on per c a p i t a , *GDP however, seem r e l a -t i v e l y Reasonable, compared t o t h e ; o t h e r s . " From a; Comparison o f consumption estimates p r e d i c t e d by the various models and the a c t u a l s a l e s by the Forest Department, i t seems that the only l o g i c a l v a r i a b l e s f o r e s t i m a t i n g f u t u r e s a l e s f o r posts and p o l e s , other than mangrove poles, are per c a p i t a GDP and time trend. Estimates by v a r i o u s p r e d i c t i o n models are shown g r a p h i c a l l y i n Figure 18. The semi-logarithmic model seems to describe the trend more s a t i s f a c t o r i l y than the others. Although the demand of these products from the p u b l i c f o r e s t reserves between 1960 and 1975 v a r i e d g r e a t l y from year to year, the trend seems to have s t a b i l i z e d during the p e r i o d 1969-1975 (see Figure 17). Whether such s t a b i l i z a t i o n i s permanent or temporary, i t i s d i f f i c u l t to a s c e r t a i n , but i t would seem that f u t u r e increases would be modest. Consumption estimates f o r fence p o s t s , t r a n s m i s s i o n and b u i l d i n g poles are based on p r e d i c t i o n s by the equations given i n Table 2.10 . An estimate f o r consumption of the . i n d i v i d u a l p o l e s • i n t h i s : c a t e g o r y has been made on r b a s i s of l i n e a r time trend,model- as g i v e n i n t a b l e 2.10. Estimates i n d i c a t e that demand f o r posts and poles (other than mangrove) from p u b l i c reserves,which averaged 117 FIGURE 18: Projecte'd-estimates of detnand f o r p o l e s fence posts from p u b l i c f o r e s t r e s e r v e s based on a l t e r n a t i v e forecasting models. and .118 • Table 2,10; PROJECTED ESTIMATES OF DEMAND FOR POLES FROM RESERVED FORESTS POLE TYPE Transmiss ion (000m 3 ) 3 1960 1975 1980 1985 1990 1995 2000 2005 2010 2020 2030 7.4 7 . 0* 25.6 20.7* 31.6 37.7 43.8 49.8 55.9 61.9 68.0 80.1 9-2 . 2 B u i l d i n g (OOOm 3) 3 6.3 7.1* 7.6 8.3* 8.1 8.5 ft, a ft,4 ft,9- 1Q,3 10.7 11,6 12.5 Fencing (000m 3 ) a l ' . 7 10.4* 5.9 8.3* 7 . 2 8.6 10.0 11.4 12.7 14,1 15.5 18.2 21.0 (A) TOTAL'3 (B) 17.2-17.6 24.5* 38.3-39.3 39.8* (46.9) 45.9-46.5 (54.8) 53.7-54.9 (62.8) 60.9-62.1 (70.6) 68.0-70.6 78.5) 75.2-79.5 (86.3) 82,3-88,6 (94.2) 89.4-57.9 (109.9) 103.5-117 .4 (125.7) 117.6-137.9 ( M i l l i o n ) Mang^ { rovefPoles ) s 0.56 0.68* 1.55 1.19* 1.88 2.20 2.53 2,86 3.18 3,51 3.83 4.5 0 5.15 3 c P r e d i c t i o n - e q u a t i o n s used to estimate consumption of round wood (OOOm ) 1 Poles and fence posts (exc. Mangroves) "PD0J;= - 2822.435+1.449t -215 94.101+2 850.8801ogt 1 (\) Transmiss ion poles 1(H) B u i l d i n g poles 1 (ti\) Fence Posts 2 Mangrove Poles ( i ) ( i i ) Fi3 t= 2366.012+1.211t 168.145+0.089t -537.185+0.275t - 128.130+0.065.660t; ( m i l l i o n poles) - 979.253+129.2511ogt ( " " ) 201.861+62.342 l o g ( G T / P T ) t Notes Estimates <3re based on l i n e a r time trend model (A) est imates as a sum of d i f f e r e n t components and (B) re f er s to estimates of aggregates Mangrove poles are estimated in m i l l i o n poles while other poles and posts are in thousand cu, The a c t u a l f i g u r e for the re spec t ive year . metres - 120 -18,000m3 by 1960 and 40,000m3 by 1975, w i l l increase only modestly to about 46,000m3 by 1980, 75,000-80,000m3 by 2000AD and 118,000-138,000 M 3 by t h e year.203 0. The p r e d i c t e d estimates show a trend of a d e c l i n i n g p r o p o r t i o n of b u i l d i n g poles while that of fence posts w i l l be i n c r e a s i n g . By 1985, i t seems that the p u b l i c f o r e s t s e r v i c e s w i l l have to meet demand f o r fence posts equal to that of b u i l d i n g poles (about 8,500m ); beyond t h i s time, demand .for t h e former w i l l be "higherV- Transmission poles w i l l continue to dominate demand f o r poles ranging between 65 and 75 per cent of a l l poles and p o s t s . 2.4.2.2 Mangrove po l e s ; Estimates f o r demand of mangrove poles a r e on the basi s of time trend. 7The l i n e a r and semi-logarithmic f u n c t i o n a l models of the time s e r i e s give almost i d e n t i c a l estimates and seem to give more l o g i c a l estimates compared to the double-logarithmic model (Figure 19 and App.II, Table 11.16). P r o j e c t i o n estimates f o r mangroves p r e d i c t that demand w i l l r i s e from 1.5 m i l l i o n poles by 1975 to approximately 2.2 m i l l i o n by 1985, 3.2 m i l l i o n by 2000AD and 5 m i l l i o n poles by 2030AD. The r e a l i z a t i o n of these estimates however w i l l much depend on the development of the export market which c u r r e n t l y i s . a n i m p o r t a n t component o f t h e whole market-demand f o r t h i s product. 121 2.5 FUELWOOD MARKETS AND CONSUMPTION  I n t r o d u c t i o n : U n l i k e w i t h o t h e r wood p r o d u c t s , where p r o d u c t i o n and consumption d a t a e x i s t , f u elwood market and consumption d a t a a r e "not•-•available^;/since, s u p p l y arid consumption t a k e .place a l m o s t e x c l u s i v e l y w i t h i n t h e non-monetary s e c t o r and no r e c o r d s a r e k e p t . The o n l y a v a i l a b l e record's & a re f o r fuelwood s a l e s from F o r e s t D e p a r t m e n t - c o n t r o l l e d f o r e s t r e s e r v e s . F o r t h i s r e a s o n , consumption e s t i m a t e s used here a r e based on a d e t a i l e d f uelwood consumption a n a l y s i s f o r 1975 c a r r i e d o u t by t h e a u t h o r ( K a h u k i , 1 9 7 8 ) . The term f u e l w o o d , i n t h i s c o n t e x t , i s used t o i n c l u d e f i r e w o o d i n form o f unprocessed roundwood, and c h a r c o a l . On t h e b a s i s of 1975 consumption, p r o j e c t i o n e s t i m a t e s a r e made up t o t h e ye a r 2000AD. The r a t i o n a l e f o r t h i s c h o i c e o f p r o j e c t i o n p e r i o d , compared t o t h e p r o j e c t i o n p e r i o d o f t h e o t h e r wood p r o d u c t s , has been t h a t p r o d u c t i o n o f fue l w o o d r e q u i r e s a r e l a t i v e l y s h o r t p e r i o d , n o r m a l l y 7 y e a r s , ( K i n g s t o n , 1972). T h e r e f o r e s u p p l y programmes can always be r e v i e w e d p e r i o d i c a l l y t o m o n i t o r any r e q u i r e d a d j u s t m e n t s o f s u p p l y i n res p o n s e t o changes i n the market. P r o j e c t i o n o f fuelwood consumption i n t o t h e f a r d i s t a n t f u t u r e would have no s i g n i f i c a n t b e a r i n g on ^pr e s e n t s u p p l y management; as i s t h e case w i t h o t h e r wood p r o d u c t s . 2.5.1 Fuelwood Supply S i t u a t i o n . : As p o i n t e d o u t e a r l i e r , i n f o r m a t i o n on fuelwood consumption i s e x t r e m e l y s c a r c e , t h e o n l y i n f o r m a t i o n p u b l i s h e d b e i n g "\ ' t h a t ! o f s u p p l i e s from g o v e r n m e n t - c o n t r o l l e d f o r e s t s . Even t h i s i n f o r m a t i o n i s i n c o m p l e t e because r e c o r d s a r e o n l y k e p t , - 122 -e i t h e r f o r l a r g e s a l e s t o c o n t r a c t o r s and i n s t i t u t i o n s , o r f o r monthly fuelwood e x t r a c t i o n l i c e n c e s which do not s p e c i f y t h e amount, o t h e r t h a n a K e a d l q a d o f . f uelwood^.-per,.:day:, per l i c e n c e f o r one month. P r e v i o u s l y c h a r c o a l p r o d u c e r s p a i d f o r amounts o f c h a r c o a l produced (the b a s i s o f r e c o r d s ) under a G e n e r a l F o r e s t L i c e n c e o r GFL, but a r e c e n t d e p a r t m e n t a l d i r e c t i v e r e q u i r e s t h a t s t a c k e d wood f o r c h a r c o a l p r o d u c t i o n be measured b e f o r e c h a r c o a l producV-t i o n . The F o r e s t Department s o u r c e s have been s u p p l y i n g appro-3 x i m a t e l y 3 00,000m o f roundwood e q u i v a l e n t o f c h a r c o a l and f i r e w o o d per year, (Appendix I , T a b l e 1.10;). T h i s r e c o r d e d q u a n t i t y can be r e g a r d e d as. a c o n s e r v a t i v e .estimate , s i n c e ; l a r g e - q u a n t i t i e s a r e e i t h e r smuggled out o r a r e l e g a l l y removed, where d e p a r t m e n t a l r u l e s • f r e e use o f f uelwood by f o r e s t r e s i d e n t s o r n e i g h -b o u r i n g communities. A p a r t from th e d e p a r t m e n t a l s o u r c e s , two o t h e r major s o u r c e s a r e E a s t A f r i c a n T annin E x t r a c t Company (EATEC) wh i c h 3 produces about 223,000m roundwood e q u i v a l e n t o f fuelwood from t h e i r b l a c k w a t t l e p l a n t a t i o n s , and t e a e s t a t e s , e s t i m a t e d t o 3 produce a p p r o x i m a t e l y 210,000m a n n u a l l y , (Kahuki 1978). Thus, t h e t h r e e l a r g e - s c a l e fuelwood s u p p l y s o u r c e s produce a p p r o x i -3 m a t e l y 730,000m roundwood e q u i v a l e n t a n n u a l l y . The b a l a n c e o f a l l wood used i n t h e c o u n t r y i s s u p p l i e d from s m a l l w o o d l o t s . 2.5.2 Consumption e s t i m a t e s : P a s t a v a i l a b l e works such as ,FAO(l962, 1970), C h l a l a (1972), Wamugunda (1974) and U h a r t (1975), d e a l i n g w i t h . f u e l w o o d consum-p t i o n were al m o s t e n t i r e l y based on s u p p l i e s from government r e s e r v e s . FAO (1970) fuelwood consumption e s t i m a t e s were an 123 -update o f FAO (1962) and put t h e e s t i m a t e a t 10 m i l l i o n m " 3 (r) 3 f o r 1967 and a f o r e c a s t of 11 m i l l i o n m (r) f o r 1975. C h l a l a ' s (1972) e s t i m a t e s c o n c e n t r a t e d on c h a r c o a l consumption, based* on a s u r v e y o f consumption i n t h e major towns, and put. t h e e s t i m a t e s a t a p p r o x i m a t e l y 310,000 t o n s of c h a r c o a l f o r 1975, c o m p r i s i n g 260, 000 tons(Household), 15,000 t o n s ( i n d u s t r y ) and 35,000 t o n s ( S e r v i c e s ) . 3 Wamugunda's (1974) e s t i m a t e :; o f 11.345 m i l l i o n m roundwood e q u i v a l e n t , f o r fuelwood consumption i n 1975, was based on FAO (1970) and C h l a l a ( 1 9 7 2 ) e s t i m a t e d p r o j e c t i o n s f o r f i r e -wood and c h a r c o a l r e s p e c t i v e l y . U h a r t (1975) , e v a l u a t i n g t h e p o s s i b i l i t i e s o f c h a r c o a l p r o d u c t i o n ! i n Kenya, basedvhis.:estima.t.es.onuChla-la : (197-2) K a h u k i (1978) made-a- -m6re."detailed-. cSnsumpfeibn-a'ri&l'ysis t h a n any o f t h e p r e v i o u s works on t h i s s u b j e c t , b a s i n g e s t i m a t e s a n a l y s i s on s t r a t i f i e d g e o g r a p h i c a l p o p u l a t i o n consumption p a t t e r n s , i n d u s t r i a l segments and s e r v i c e s components. These e s t i m a t e s put consumption f o r 197 5 a t a p p r o x i m a t e l y 15.09 m i l l i o n 3 3 m s o l i d roundwood e q u i v a l e n t (or 23.95 m i l l i o n m s t a c k e d roundwood e q u i v a l e n t ) . The e s t i m a t e s a r e shown i n T a b l e 2.11;, and form t h e b a s i s o f t h e f u t u r e consumption p r o j e c t i o n e s t i m a t e s f o r fuelwood. TABLE 2.11 CATEGORIES .OF FUELWOOD CONSUMPTION AREAS CATEGORY I I 113 IV V (a) V (b) V (c) CHARACTERISTICS ESTIMATED CONSUMPTION Forested regions and forest neighbourhoods. Both n a t u r a l and manmade f o r e s t s . Wood p l e n t i f u l . Neighbouring farmers and for e s t workers mainly use wood. Moist and dry woodlands. Wood f a i r l y p l e n t i f u l butr being depleted due to the in t e n s i v e a g r i c u l t u r a l pressure. Small and largescale farmers u s u a l l y w e l l o f f economically. Dry savannah rangelands. Mainly thorn bushes. Inhabiting communities mainly p a s t u r a l i s t s . Dry semi-desert regions. Vegetation mainly dwarf shrubs and grass. Inhabiting communities l a r g e l y