Sunday, Jul 22, 2018
Agriculture | Africa | Equatorial Guinea

Logging industry in Equatorial Guinea

A local wood logging and processing company supplying the domestic and international markets

3 years ago
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Mr. Ricardo Hanna

Managing Director of Rio Muni Timberland, Equatorial Guinea

Rio Muni Timberland’s Managing Director tells us about the origins of the company he runs, the challenges they had and how they overcame them to be a prominent player in the industry nowadays

Tell us about you and how Rio Muni Timberland started to operate in Equatorial Guinea.

I was born here, in Guinea. My father came to the country in 1912. At that time there were cocoa, coffee and traders and we were in the trade business. Eventually I noticed that as this was a country with a small population, and there were already many traders, I decided to do something different. As I had some knowledge of wood, because I had an uncle in Spain who imported wood, my partner and I decided to create the company. What happens is that when we started in 2006 we still didn´t have a factory or anything, so when in 2008 it became compulsory to have a factory for the wood processing we had to stop for two years. Then we started building the factory, but we had no experience in this industry and we had some problems with the people we sought to help us to set it up. In the end, we were able to set up two lines for sawing plank and two development lines to make veneer because there are two different sizes.  Now, somehow we are there.

Guinea is a mountainous country. We are in a hilly area and when we got here, as we did it first, there wasn’t any industry or anything else so we decided to set up the factory to develop the business and offer employment to the nearby people. We spent three or four years until we could finish everything because there are technical difficulties very often or sometimes there is a lacking in some of the things needed to finish. Now we have finished everything.

We were told by the Hon. Minister of Agriculture and Forestry that you want to help the rural exodus and that there are companies that set up factories in rural areas to provide employment for the local population.

What happens is that there are many people from very small villages and if they all have to move to find work then there will be no one inland. Therefore, we have established the factory in Nyefang, others have moved to Rio Campo, and so, the idea is that all the people can have access to work. Meanwhile we are teaching: we have to bring some technicians from other areas to teach people how to work step by step. Since there was no industry before, we teach them to use the machinery, etc.

What types of products does your factory make?

Veneer and planks.

What markets do you supply, domestic market or the international market?

Before there was a great demand here in the country for the construction sector. First, we had to supply the local demand and if there was anything left, we exported it. So we have two sales representatives who export to various countries: part of it goes to Spain, another part goes to Italy, the Gulf, Denmark and even South Africa. There are some countries, like the Gulf ones, which are mostly deserted areas and need all types of wood.

These agents sell around the world and know what is needed in every market and they send the orders. So you do not have to worry about looking for customers here and there.

In this phase of economic diversification that the country is undertaking some of the priority sectors are agriculture and forestry, what potential do you see for these sectors?

For example, I have a cousin who has just set up a factory in Malabo to make all types of furniture and I am supplying wood. Then, somehow it does not consist only in exporting the semi-finished product but it also includes the final product, like furniture. In the forestry sector, I see it in its nature, there is a approximately 60% of okume, which is a species we have here that regenerates very fast and besides, it is not even necessary to plant it for its regeneration, since it grows from the fruit itself. Then, as there was a very good policy that stated that everything that was less than 60 cm in diameter couldn't be cut, and there were other species that are highly demanded worldwide, then the forests regenerated very quickly. Around five or seven years later there are new trees that can be exploited. The policy pursued is a very good one, because, otherwise, I would not make an investment like this, but as we see future we have made it.

Agriculture is not my specialty, but there is a lot of potential. Look, for example, I see that in Malaysia and Indonesia, there is a lot of palm oil production, but as those lands have been used so much the product is not the same. Here, however, there is a great amount of land that can be used if someone comes to plant, because it can be all used up. It's not like cocoa, which is more delicate, you can only plant it on virgin and fertile land and that is what we have here.

Yes, it has all the climate benefits and fertile land but what other competitive advantages would you say Equatorial Guinea has for an investor who is considering coming?

Here it is not like in other countries. Although there are, of course, all the ministries, here everyone knows each other, it is like a big town. So when you need anything, you have access to see the minister at any time. In other countries there is a lot of bureaucracy, it is very difficult. In Guinea we all know everyone and we have easy access. I have some family in Nigeria, for example, and it takes a lot of time to get to a director or a minister there; but not here. If you arrive and have a project in hand, you have access to everyone; it is much more effective and a great advantage to all investors.

Also there is peace and political stability, you can come and go without any problem. The fishing sector, agriculture, tourism, all that has a great potential if developed for such a small population like the one Guinea has; apart from oil and gas, which are there, but will not last a lifetime, that is why you have to develop other sectors, which have a lot of potential. Now, for example, they are making important infrastructure in Corisco Island and all that is focused on tourism, and that is a paradise, really. Many years ago the husband of Onassis's daughter came here and wanted to buy the island to develop it for tourism and planned to put a glass factory because that sand is the best in the world for that. But of course, that offer was not accepted, although we were poor. Because, even if we are poor, people can’t come to take advantage of us.

Given that we are going to be read by major investors and decision makers, what message would you like to convey to them?

The more investors come, the better for the country, so that everyone has a job, that's what we all want. The truth is that the advantage here is that if you want to start a business, you can do it faster than in any other country in the world because you have access to all ministries and ministers and any problem can be solved in just a moment; that is an advantage over other countries.

If we take into account that the US is more focused on Africa than ever, what values would you like Equatorial Guinea to be associated within the United States?

United States has greatly helped Guinea. Before them, there was a Spanish company that had a ten-year contract for exploration, they brought piping etc. and left everything there, they said that there wasn't oil. But the American companies, when they could not work in Nigeria for a while because of the war, came here, where they had already made explorations. The truth is that the Spanish company set us back 10 years because until the contract with them finished, no other companies could get in. When the contract ended, then, the American companies came and the good thing was that not only did they devote themselves to oil exploration but also to methanol transformation, which has been very positive for the country. So it is thanks to them that we have much of what there is today.

Where do you see yourself and your company within five years?

We are analyzing options to add and do other things, see what we can do to complement the factory. We continue looking. For example, instead of selling the plank, we can turn it into tablex and sell it. In other countries there is consumption of a sort of board that then goes with other strips, and it is widely used for construction there. The idea is to add and make more products because in that way we can profit from parts that we sometimes have to put in the boiler, which feeds on waste. We are evaluating how to make the most of these wastes.




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