EXECUTIVE SUMMARY
Pulp demand rising, fibre supply limited
1. Projected demand for pulp and paper in Thailand in the coming 25 years is high, which renders rapid strengthening of country’s own pulp milling capacity nationally well justified. Remarkable increment in pulp supply can be met only with planted trees, through plantations and contract farming. The exploitation of natural tropical forests has been banned in Thailand.
2. The proposed pulp mill of the Forest Industry Organization (FIO) has an output capacity of 100’000 ADT/a, with an annual demand of 470’000 green tons (or 264’400 m3/a) of Eucalyptus or other short-fibre wood. The FIO’s plantation land resource in North-East Thailand is 20’161 ha (126’006 rai), out of which 9728 ha (60’803 rai) has already been planted with Eucalyptus camaldulensis. The additional area to be reforested is 10’432 ha (65’203 rai).
3. Steady wood supply for the pulp mill is secured if an average growth of 13.1 m3/ha/a (3.7 tn/rai/a) is achieved. Currently the growth potential of the existing plantations (9728 ha) is at 11.4 m3/ha/a (3.2 tn/rai/a).
4. The planted and plantable area in the North East (20’161 ha) is estimated to sustain an annual timber supply of 410’000 gtn/a. The required management measures for this level are: i) reforest the remaining 10’432 ha with current practices at spacing 3 x 3 m, apply 7 years rotation, ii) enrichment plant the older understocked plantations into the spacing of 2 x 4 m, apply 5 years rotation in agroforestry approach (with forest villagers’ cassava every 5th year).
5. The remaining wood demand, 60’000 gtn/a, is to be procured from contract farming, open markets, or from the FIO’s remote plantations. The concept of contract farming has already been established in Thailand, a working example is applied with Phoenix Pulp & Paper Co., Ltd. in Khon Kaen. Wood markets of plantation Eucalyptus have opened up in the North-East; the wood prices are in the steady rise after the logging ban for natural forests.
Improved tree stock and production optimisation raise yields
6. With the advanced tree and stand improvement, combined with production and management optimisation, a rise in the plantation productivity to the level of 14.1 m3/ha/a (sufficient supply from the FIO’s own plantations) is within reach. This is justified by the following findings:
– Ecological conditions in North-East Thailand favour Eucalyptus plantation forestry. Rainfall is over 1100 mm/a, soils, in general, are good enough for eucalypts; they are soft, only a few rocky sites have been planted or reserved. Saline soils are rare in the plantation sites of the North-East.
– Thai foresters have developed advanced plantation establishment techniques. Complete ploughing and mechanical weeding are nowadays commonly practised. Consequently, the high survival rate and rapid early growth results. This is especially the case in the youngest FIO plantations.
– Majority of the older plantations are understocked (2 x 8 m spacing). Doubling the density will double the yield at currently practised short rotation (5 years).
– 5 years’ rotation does apparently not maximize pulp fibre yield. In Brazil, the rotation of 7 years is practised in comparable conditions but with much higher yield level. In Ethiopian highlands, the biomass yield is maximized at 10-12 years rotation. Future raising of rotation time from 5 to about 10-12 years is likely to increase annual timber supply with 30-50 %.
– Miscellaneous, apparently poor Eucalyptus seed stock is used to raise seedlings. A shift from unimproved seed stock to improved clonal stock has a potential multiplier effect of 2 (two) on the annual biomass yields. Working examples are found in Aracruz Florestal pulpwood plantations in Brazil and in South African Eucalyptus forestry. The Thai foresters are capable to adopt these techniques; clonal forestry applications are already underway in the Kasetsart University and in the Royal Forestry Department.
Ecological, social and economic impacts positive
7. The environmental impact of plantation forestry and contract farming in North-East Thailand is positive. It must not be expected that Eucalyptus plantings are substitutes for tropical rainforests. Eucalyptus must rather be regarded as an alternative tree crop in agricultural and agroforestry systems suitable for impoverished soils and degraded lands.
8. The Thai forest research has shown locally that positive ecological impacts of eucalypts overweigh the negative impacts. In the positive side is the reclamation of open wastelands for tree cover and binding soil from wind and water erosion. Negative ecological impacts occur when reforesting fragile upper zones of watershed areas. This problem is known in Thailand and is avoided with careful land management. Agroforestry application of eucalypts combined with cassava or other crops are better studied in Thailand than anywhere else in the tropics.
9. Reforesting open lands with any tree crop increases the woody biomass density and counterbalances the effect of natural forest destruction on climate. Plantation forests and contract tree farming are a national Thai attack on the global greenhouse effect.
10. The alternative to Eucalyptus planting is the nitrogen-fixing tree Acacia mangium. It grows moderately well in areas where the rainfall exceeds 1400 mm/a. Working examples for ecologically sustained, humid tropics Acacia mangium forestry, are found in Indonesia. In drier areas, A. mangium is expected to produce only half of the E. camaldulensis yields.
11. Logging ban from natural forests on one hand, and the already existing Eucalyptus plantations and woodlots, on the other hand, have created an operating plantation wood market in the countryside of North-East Thailand. Currently, Eucalyptus timber is bought and sold as poles or to be processed for exported wood chips (mainly for Japan). Phoenix pulp mill is steadily increasing the plantation wood demand in the Khon Kaen area. The Eucalyptus wood markets are becoming an essential part of the agricultural and forestry sector in rural areas. This has a positive effect on the economy of North-East Thailand in general and on the farmers livelihood especially. By adding a new crop into a selection of profitable alternatives for cropping in impoverished soils, the welfare in the rural areas is expected to increase. Higher wood demand will mean higher security to the wood producing farmers and also steadily rising prices.
11. The forest village concept of the FIO is a model example of successful social forestry. The current experience already shows that shifting cultivators can be settled in the forest areas by providing land for housing, home gardens and permanent cropping, and by providing permanent additional income from plantation forest work. The continued satisfaction of forest villagers is a guarantee for a more positive attitude towards forest plantations.
12. The economic impact of the plantation forestry is positive. Provided improved stock is in use and management optimisation is applied, an internal rate of return (IRR) of over 10 per can be expected from the plantations. Lower IRR from older, forest village combined plantations is also acceptable, as the social and agroforestry advantages justify shorter rotations and lower wood yield levels.
13. To guarantee steady pulp fibre supply as early as possible for the proposed pulp mill, it is recommended that possibilities for international soft loans are sought for, to ensure funding for rapid tree improvement and reforestation activities well in advance.
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Comment on 13 October 2020:
I was in January 1992 on a forestry trip to Thailand, to study the subject above. The full report (feasibility study) was completed on 28 January 1992. The raw text can be found in the link.
The text in the link is quite raw because digital reporting in 1992 was quite elementary. The figures and graphs for the report had to be annexed separately. The previous softwares handled the tables in a different manner than the present modern softwares. The text as such in the 2020 link, however, is quite comprehensive with the 1992 text.
Veli Pohjonen 