Tree Growers’ Profitability in Veneer-Based Engineered Wood Products in Mufindi District, Tanzania

Abstract

Engineered wood products have increased in demand worldwide. This also applies to Tanzania, leading to a developed interest in the increased production and demand of veneer, plywood and marine boards in the Mufindi District. This in turn influenced the aim of this study to examine the potential of Veneer Based Engineered Wood Products (VBEWPs) through the value chain. A cross-sectional study design coupled with purposive, stratified and snowball sampling techniques were adopted. A total of 152 actors involved in VBEWPs were sampled from the population of about 681 tree growers, brokers, traders, transporters and manufacturers. Techniques such as interviews, focus group discussions and key informant interviews were used to collect data. Data was analyzed by computing Gross Profit Margin, Value Added and Value distribution.  The study concluded that although chains involving both small and large scale growers played a significant role in production of the veneer based engineered products, small scale chain experienced inefficiency compared to chain that involved large scale growers. Recommendations include increasing efficiency for small-scale tree growers’ chains and strong cooperative alliances to enhance collective negotiation for better pricing and access to loans. Furthermore, the government should improve investment policies and reduce various taxes that the value chain actors incur to lower production costs and maximize profits.