MARKETING OF COMMUNITY FOREST TIMBER
Supporting a fair market for sustainable economic development of the Forest Communities in East Cameroon
Community timber ready for transport
In Cameroon communities have been given the right by the government to manage and exploit their own communal forests. These forests are very rich in resources, especially on timber. The timber market is a very complex market and the communities have, up to now, found great difficulties to enter this market successfully. The mission of SCNIC (Société Commerciale pour la Négociation et l’Investissement Communautaire) is to make profit by improving market access for Community Forest Timber against equal and fair prices. SCNIC offers services to the Forest Communities who want to bring their timber to the market. Because SCNIC is operating on a fixed percentage it is in the best interest of SCNIC to acquire the best prices possible. SCNIC works together with local NGO’s to re-invest the revenues into local development.
Facts
2007
| Two years ago: | |
| Last year: | |
| This year (forecast): | 43,400 |
| Year 2 (forecast): | 100,800 |
| Year 3 (forecast): | 196,350 |
| Two years ago: | |
| Last year: | |
| This year (forecast): | 1,352 |
| Year 2 (forecast): | 3,372 |
| Year 3 (forecast): | 6,465 |
| Two years ago: | |
| Last year: | |
| This year (forecast): | 1 |
| Year 2 (forecast): | 3 |
| Year 3 (forecast): | 4 |
How do you expect this to be financed? Please note: the total amount mentioned here should be equal to the total finance needed at the previous question.
| Own Contribution in cash | 1,240 |
| Loans (debt) | |
| Share capital that you seek from investors (equity) | |
| Other sources | 3,520 |
| Total finance needed (US$) | 4,760 |
The Business
The business concept is an intermediary concept. SCNIC deals with two sorts of clients. The first clients are the Forest Communities who want to bring their timber to the market. The other types of clients are the buyers of the Community Forest Timber. SCNIC brings them in contact with each other.
How profit will be generated
SCNIC is paid for its services by the Community Forests. They pay a fixed percentage of the revenues of the sales. For every order SCNIC receives from a buyer a contract is made between all parties, to ensure transparency, profitability and control over the results. Because SCNIC is operating on a fixed percentage it is in our best interest to acquire the best prices possible.
SCNIC product/service and clients
The buyers want to do business with SCNIC because SCNIC can offer them (legal) timber, produced with a very good quality. It limits their efforts to come all the way to the forest. Also SCNIC organises the production, transport and legal and administrative arrangements. SCNIC also helps them with the experience in dealing with the Community Forests, who are difficult business partners due to their very limited business and negotiating skills.
The Community Forests will enter into business with SCNIC because the prices that can be arranged for them are better than they currently receive from local buyers. Next to that SCNIC offers additional services like advice on marketing and market information, training on business development and lessons in production methods (together with local NGO’s). Also by bringing in the orders to the forest SCNIC creates direct employment.
SCNIC markets its product/service via different channels; SCNIC participated in Promote2005, a large business fair in Cameroon, where we presented the concept of the business model. SCNIC contacted a number of interested potential buyers of the Timber. Also we are going to launch an internet site where we present the Community Forest Timber (sorts, species, terms & conditions of deliveries etc).
Due to our extensive network in the region of Lomie, SCNIC has already the contacts with the Community Forests. We have organised numerous meetings to present the results of our research on the market barriers for Community Forest Timber and we have officially presented our business proposal. We invited all the Community Forests to come to this meeting to discuss SCNIC's business activities.
Competition
In the process of exploitation small scale exploiters can be considered as competitors of SCNIC because they offer more or less the same service to the Community Forests. Small scale exploiters bring their sawing machines directly to the forest, harvest it and pay direct the Community Forest. They offer direct cash, which is their strong point. But the prices they offer are very low, because they need to make a instant profit. Their tendency is to profit from the weak business capacities from the Community Forests.
Further, in the region of Lomie (also on national level in Cameroon) there is no organisation who gives support in a way SCNIC is offering.
Nowhere in Cameroon is our service offered like this. Direct business support to communities to link them to the market and support them in achieving delivery in time, with the right quality and quantities is a breakthrough concept. Next to that we assure that everything is done on the basis of sustainable forest management practices.
The Entrepreneur & Management
The aspects that support the elaboration of my business idea first relate to my education in financial and administrative management. Also I followed training in accountancy and management of projects. In my last job as director of GECEC, a micro credit institute based in Lomie, I gained relevant working experience during the last 6 years. I learned how the local business environment is working and I developed business relations with numerous partners on local and national level. Before I became director of GECEC, I worked 4 years as chef on the sales storage of timber at a saw mill called SFH. The last 3 years I worked and supported a group of 3 Community Forests called CODEVIR, in the region of Lomie. Next to that I participated in some (international) symposia and workshops on entrepreneurship and forestry. The last two years, I have put a lot of effort in research on analysing market barriers for Community Forest Timber. This research forms the basis for this business idea.
Development
On short term, SCNIC will create for each Community Forest 5 fixed jobs and 20 part-time jobs in the first 2 years. For 4 Community Forests this means 20 fixed jobs and 80 part-time jobs. SCNIC itself expects to employ 3 people the first 2 years.
Work is created directly in the Community. The young local work force will be trained on sawing techniques and sustainable harvesting. Trainings will be organised on ecological logging to prevent illegal cutting. Jobs will become available on sawing and transport in the forest, tree stock-tacking, uploading on the trucks etc. The increasing direct income in the Community will directly improve living standards and gain more commercial activity in the Communities.
After 3 years, the average revenue for one Community Forest, who will sell their 500m³ (maximum number of metres allowed to harvest by one Community Forest, based on Cameroonian law) around 50 mln CFA (EUR 75.000). For 4 Community Forests the amount will be around 200 mln CFA (EUR 300.000). The amount will become directly available for community development purposes. Projects on sanitation, housing, business development, education or healthcare could be financed with these funds. Management of these funds has to be organised together with local NGO’s.
On the long term, SCNIC will work with at least 20 Community Forests. A stable market share will be achieved. A special Community Timber Forest Brand will be developed and recognised on the national and international market.
SCNIC will research possibilities of timber transformation in the Communities to reach a higher added value for the Community Forests. Also the SCNIC model of the region of Lomie will be copied to other regions in Cameroon, because it is predicted that there will be over 250 Community Forests in Cameroon within the coming 10 years.