GEA Partners

Where is the market for plantation timber?
Why Promote Timber Plantations in the Philippines?

Potential partners of GEA Timber Ventures Inc. include several foreign companies which are seeking reliable, long-term supply of lumber for processing, or wood biofuel for energy production. These include; Konshii Woods--manufacturers of high quality flooring and external timber walls, decks, trellises and screens; Mitsubishi Power Source L/c--users and producers of wood biofuel for energy; and the Thailand United Paper and Pulp Company (UPPC)--producers of paper products--seeking long-term supply of wood biofuel to supply their local energy requirements.

Our initial partnerships also included those with the (i) indigenous people's (IP) organizations, the Aetas of Gayaman, Bamban, Tarlac, and soon with a second Aeta IP, located in Porac, Pampanga; (ii) Alternative Development Initiatives (ADI) which has developed a resource pool model by which economies of scale, price and efficiency can be applied to smallholder tree farmers; and (iii) ARCTAS, a USA-based energy venture capital company. We have signed a memorandum of agreement (MOA) with (i) ADI to assist in the development of pelletized woodchips for export to Europe, and (ii) ARCTAS, targeting the sequential harvesting of existing trees for export of wood chips with Mitsubishi followed by establishing new clone timber plantations on farmers' fields in Southern Mindanao.

Locations of Potential Partner's Timber Plantations in Luzon, Visayas and Mindanao
Potential Partner Location / Area under Consideration
1. Konshii Woods, Japan
(Processed Lumber)
Agusan del Norte & Agusan del Sur, 3,000 ha
2. Mitsubishi Power, Japan (Wood Biofuel) & ARCTAS, USA Caraga Region, 50,000 ha & Bayawan City, 1,000 ha
3. United Pulp and Paper Company, Thailand (Wood Biofuel) Cenral Luzon, 5,000 ha
4. The Power Source Group, USA (Wood Biofuel) Cagayan de Oro, 5,000 ha
5. Negros Occidental Timber Company Kabangkalan, Negros Occidental, 3,000 ha
Source: GEA Timber Ventures, Inc. October 2010

Our company has had two or more joint visits with Konshii Woods and Mitsubishi Power to existing timber areas in Cagayan de Oro (Misamis Oriental), Agusan del Norte, and Agusan Del Sur. We had fruitful meetings with Thailand's UPPC, in their Manila Office in Fort Bonifacio. We have visited several times and we have provided our technical services to the owner of a 1,000 hectare, 15-year old Gmelina plantation in Bayawan City of Dumaguete, Misamis Oriental. Our company has submitted a report after completing a survey of marketable timber from the Bayawan City timber plantation. Recently, the owner of a 6,600-hectare of deforested lands in Kabangkalan, Negros Occidental in the Visayas, has expressed interest in engaging our services to reforest her idle property with clones.

Upon their requests, our company has already submitted our 1,000 hectare timber plantation module, including our cost and benefits analysis, and return-on-investments (ROI), to top officials of the Philippines Social Security System (SSS) and the Development Bank of the Philippines.

Where is the market for plantation timber?

When GEA Timber Venture Inc. starts producing good quality lumber products from 10,000 hectares, where will it market these lumber? The company will market these products locally or abroad. The Philippines has been a net importer of round wood and other wood products. In the past five years, the Philippines imported wood valued at more than $100 million per year. The wood is used mainly for housing and the furniture industry. The outlook for exporting wood is also very promising. According to the United Nations' Food and Agriculture Organization (FAO/UN), the three major Asian wood-consuming countries (People's Republic of China, Japan, and South Korea) will need 70.04 million cubic meters (cu.m.) this year (2010). Refer to the following table below:

Countries Predicted Consumption in 2010
(million cu.m.)
Round Wood Imports
(as % of consumption)
Round Wood Imports
(million cu.m.)
1. People's Republic of China 193.59 6% 10.96
2. Japan 82.72 64% 52.74
3. South Korea 7.81 81% 6.34
Total Imports 70.04

Why Promote Timber Plantations in the Philippines?

The Philippines being a tropical country has the distinct advantage of having a climate, which favors faster-growing trees (or 2.5 times faster) compared to tree plantations in countries with a temperate climate. The advantage is derived from a combination of:

  • high average temperature(26 degrees C);
  • high rainfall (1500 to 2400 mm);
  • high humidity, and
  • fertile soils.

The Philippines needs assistance from the private and public sectors to reforest millions of hectares of deforested land through sustainable and economically-viable timber plantations. Due to a prolonged unmitigated deforestation, which has taken place since the beginning of the 20th century, the Philippines has lost about 92 percent of its original forests, and only about 8 percent of the original forest remains today.

Based on socioeconomic considerations, timber plantations provide sustainable landuse, and employment to indigenous peoples and local upland inhabitants. While it can never replace natural forests, it does provide economic alternatives that helps protect and conserve remnant natural forest areas.