Enhancing Productivity of Forest Industry through Industrial Clusters Concept

Abstract

The forest products industry in Nigeria was one of the most developed in the country in the 1960’s to early 1970’s.  During this period, forest resources served as the engine of growth and propelled economic activities in the construction, furniture and packaging industries. It also made Nigeria an exporter of wood products such as plywood, furniture and particleboard.  However by mid 1970’s, the toll of intensive forest exploitation has started showing and volume of wood export which peaked at 700,000m3 in 1964, decreased to 290,000m3 in 1970.  Since the 80’s, installed capacity in most of the wood enterprises has dipped considerably. The  capacity utilization in the sawmill industry rose from 8,831,750m3 in 1988 to 15,793,188m3 in 1992 and decreased to 10,900,000m3 in 1996. It subsequently increased to 14, 684,000m3 in 2002 and 11,734,000m3 in 2010.  This pattern of decrease in capacity utilization was also experienced in the furniture, plywood, particle board and matches producing companies. A major characteristic of the forest industry in the country is that most of the companies operate at cottage and small scale level with 3-5 men workforce.  They rely mostly on crude and old implements. The efficiency in most of the enterprises is low, leading to wastages, low quality products and marginal profitability.  As industrial clusters have the capacity to rejuvenate local economies, provide competitiveness and create wealth, the formation of the enterprises into industrial clusters will significantly improve efficiency, innovation and quality of products in the forest industry.  Clusters also have the advantages of promoting access to loan able funds, support by government and funding agencies in addition to promoting joint actions. Thus, clustering has the advantage of enhancing productivity in the forest sector and promoting access of the wood enterprises to global markets.

Key words: clusters, sawmill, quality control, forest industry, wood processing.