Miro Forestry is a commercially focused and sustainable forestry business centered in West Africa.

As an independent Cayman Islands incorporated private limited company headquartered in Dubai, the company owns and operates sustainable forestry plantations of fast growing timbers for the production of lumber, poles and biomass in Ghana and Sierra Leone. The company manages its own forestry plantations, which cover approximately 25,000 hectares of land, and commenced planting a mix of fast growing timber crops in February 2010.

With an aim to be a leading, commercial and sustainable plantation business that operates to high management, social and environmental standards, Miro Forestry focuses on fast-growing, high-yield plantation timber that enables it to cater to both local and international markets. The company mixes commercial plantation forestry with protection and regeneration of indigenous tree species, and also promotes bio-diversity and environmentally sustainable land-use management. As such, the company is also able to continue delivering both attractive returns to investors as well as significant social and environmental benefits within local communities.

Managed by an experienced team of forestry, business and investment management professionals who have a good track record of building and operating emerging market businesses, the company aims to lead the sustainable plantation forestry industry in West Africa with in excess of 2,000 hectares being planted next year for the production of poles, saw timber, and wood chips for wood based panels and biomass. In an exclusive chat with Timber Design & Technology, Andrew Collins, Executive Director & CEO, Miro Forestry provides an overview of the company and its strategy.

Objectives

Miro Forestry is a profit driven, commercial plantation timber business that aspires to operate in line with high management, social and environmental standards. As such, the company aims to continue to conserve and expand natural forest and other valuable vegetation within its areas of operation and to also obtain FSC certification for all its forest plantations. In addition, the company plans to continue to reach out to local communities to establish social, economic and environmental development programs within the local community adhering to high standards of corporate social responsibility. Collins states that this is in line with the company's' aim to be the preferred partner for the local communities in which it operates and for international business partners and financial institutions.

At its core, the company's principal objective is to continue to acquire and build interests in timber and sustainable forestry businesses and assets that provide it with:

- exposure to capital appreciation of, as well as the cash yields generated from, timber and forestry investments; - optimize long-term sustainable returns through best practice management;

- ownership of timber and forestry businesses and assets, which are, or have the objective of, producing sustainable timber certified by the Forest Stewardship Council; and

- revenue from the supply of timber and timber products worldwide.

According to Collins, the company was borne out of a venture capital group originally based in Dubai and has its head office in the UAE. Collins notes that the company has a number of investors in the Oil & Gas industry, based out of the Middle East, who have been attracted to investing in Miro Forestry given their understanding of the growing demand for timber as a global commodity and the strong commercial returns that the company can deliver. In addition, they have been attracted by the ability to offset their carbon footprint (given the atmospheric carbon sequestered by the plantations) and because the company delivers significant social benefits generating jobs, providing vocational training and other benefits in poor rural areas of Africa.

Business Strategy

Collins believes that demand for sustainable timber will continue to rise with the increased global demand for wood products particularly from the expanding and increasingly affluent emerging markets. More importantly, in the face of increasing demand, the planet is losing over ten million hectares of forestland every year or an area equivalent to Ireland or Sierra Leone. On a positive note, there are several measures being implemented to curtail this continued deforestation and illegal logging. However, demand for sustainable timber continues to grow and plantation timber represents one sustainable and feasible option to address this demand.

In the case of plantation timber, the truth is there is simply not enough land being planted with sustainable timber crops to meet the growing demand. However, tropical climates in emerging markets have high biological growth rates, ensuring that trees grow and reach maturity quickly. This combined with low land and operating costs ensure that countries in West Africa such as Ghana and Sierra Leone can be extremely competitive and profitable for the production of sustainable tropical timber. Collins is quick to point out that the industry in West Africa suffers from a lack of investment and knowledge of best practice forestry and sustainable practices. There is also a general shortage in construction timbers - particularly as the region continues to boom with world leading GDP growth rates.

Against this backdrop of increasing demand for sustainable timber, Miro Forestry's strategy is to convert low-yielding grassland and degraded forest into sustainable plantations that grow the highest-yielding timber crops suitable for the land areas under the company's management. According to Collins, the plantations currently are still immature and no timber has been harvested. However, the company is positive of harvesting timber from 2016 onwards and building up towards an annual supply of over 500,000 cubic meters per annum from 2018.

Species

Miro Forestry owns and operates its own forestry plantations in Ghana and Sierra Leone, which cover over 25,000 hectares of degraded land, and commenced planting a mix of fast growing timber crops in February 2010. However, it is important to note that selecting the correct species for future plantings is not just about the timbers and products that the market demands; it is very important to select species that grow well on the proposed planting site. West Africa has ideal climatic conditions for maximum tree growth and competitive operating costs; it is also a region with significant and growing demand for timber products. As such, the company is focusing on Eucalyptus, which is appropriate for construction and for transmission poles, sawn timber, wood chip for wood based panels and biomass, with a view towards selling this in West Africa and into Europe.

Wood Products

In addition to its own plantation, Miro Forestry has supplied sawn timber from third-party suppliers to customers in Europe. Leveraging its contacts in West Africa and globally, the company has been able to source a range of West African, South-east Asian and European species timbers. The company is also able to supply creosote treated pine transmission poles, primarily made from eucalyptus and pine. In line with its environmental policy, the company is looking to obtain FSC certification for its plantation and also works with FSC certified suppliers. Further, Miro Forestry intends to start supplying sustainable wood biomass for renewable energy in the near future.

BOUMFOUM FORESTRY, GHANA

The Boumfoum Forestry Plantation consists of 5,000 hectares of fertile land located in the Ashanti Region of Ghana. The company's land is located about 10 minutes drive from the town of Agogo and about one hour from Kumasi.

The plantation is around 7° north of the equator and has a tropical climate with average monthly temperatures ranging between 24°C and 28°C and annual rainfall between 1,500 - 1,650mm. The rains predominantly fall in June, July and September with the driest hottest months being December through to March.

The land on which Miro Forestry is establishing plantation forests was severely degraded during the 1980s and 1990s by agricultural clearing and heavy logging. Today, the land has been designated a forestry reserve, and the Ghanaian Forestry Commission are very supportive of foreign investment being deployed to reforest the area. Moreover, Miro Forestry works in close consultation with local subsistence farmers in the area aiming to deliver mutual benefit through education and controlled agro-forestry practice.

Most of the soils are well drained and considered ideal for trees such as Teak and Eucalyptus. The land areas not planted by the company currently hold a canopy cover of less than 5 percent and show a dominance of secondary growth species such as elephant grass, characteristic of the transition zone, and is ideally suitable for growing both indigenous and commercial timber species.

YONI, SIERRA LEONE

The company's Yoni Plantation consists of 21,000 hectares of flat and fertile land located in the Tonkolili District of Sierra Leone, 90 miles from Freetown, the country's capital, and adjacent to the country's major highway into Freetown. At this plantation, fast rotation species, predominantly including Eucalyptus, are grown to cater to demand from the local transmission pole market as well as for export. Due to the proximity of the land to Freetown, and substantial deepwater port facilities, the company has good access to the North American and European lumber, pulp and biomass markets, which are characterized by increasing demand coupled with decreasing supply.

The Yoni Plantation is around 8.5° north of the equator and has a tropical climate with average monthly temperatures ranging between 26°C and 36°C and annual rainfall in excess of 2,000mm. The dry season typically spans between December and March having less than 100mm of rainfall.

The land on which Miro forestry has established its plantation forests was once forested with primary forest. However, the land now consists of secondary growth including grasses, low level bush and palms. The land is being leased under long-term agreements with landowners ratified by the chief's and government as legal custodians.

The land area has limited subsistence farming going on which is primarily centered around the low lying swampy areas for rice cultivation unsuitable for forestry. The Company works in ongoing consultation with local farmers and aims to bring additional benefit to such farmers through opening up swampy areas for rice cultivation and enabling controlled agro-forestry thus providing clear land for subsistence farming, mutual crop protection and keeping the land free of nutrient sapping undergrowth.

© Timber Design & Technology 2012