Here’s a calculation of the area of plantations that will required to feed UFS’ chip mill currently under construction on the island of Pulau Laut off the southeast coast of Kalimantan.
1.46 m3 of wood is needed to produce one bone dry metric tonne of wood chips (that’s the figure that CIFOR uses, in its report about UFS’ chip mill on Pulau Laut). Therefore, the chip mill will need 1.46 x 700,000 m3/yr. Which is 1,022,000 m3/yr.
Forestry consultants Jaakko Pöyry (more on them later), use an estimated growth rate of 15 m3/ha/yr, with a loss of 10% by the time the timber reaches the mill gate. Pöyry calculates that on a seven year rotation, the yield from each hectare will be 95 m3.
So, the area of plantation required to be harvested each year is 1,022,000/95 = 10,758 hectares. The total area of plantation required will be 10,758 x 7 = 75,306 hectares.
There is a 50,000 hectare acacia plantation on Pulau Laut, where the chip mill is planned. It is owned by Inhutani II, a state-owned plantation company. The company recently joined WWF’s Global Forest and Trade Network – to sell its timber to furniture manufacturers.
Incidentally (or not so incidentally at all, come to think of it), the reason I had to do this calculation is because Jaakko Pöyry didn’t do it in 2004 when they were commissioned to produce an “Environmental Issues” report on the wood chip mill for the Raifiesen Zentralbank (RZB) Singapore Branch.
The most likely reason Pöyry didn’t look into the raw material supply is because UFS doesn’t have enough plantations to feed its various wood chip and pulp projects in Kalimantan. Pöyry did not mention that Inhutani II was planning to sell its timber for furniture manufacture (even though Inhutani II has been working on joining WWF’s GFTN for two years, with assistance from the World Bank’s IFC – as part of IFC’s support to small-medium sized furniture manufacturers).
The reality is that the wood chip mill is going to be chipping what’s left of Kalimantan’s forests before long.
Shortly after Pöyry’s report was published, RZB Singapore decided to lend US$21 million to UFS to build the wood chip mill. “We would be glad if we had not invested in this project,” Andreas Ecker, Head of Communications at RZB’s headquarters in Austria, said a month later. “It’s a lot of trouble.” He made the comments at a meeting with Global 2000 and Environmental Defense.
Here’s a hint for banks looking at funding wood chip or pulp projects. If your forestry consulting firm doesn’t tell you where the raw material is going to come from, it’s probably because they’ve got something to hide.