Editor’s pickGabon: The land full of opportunities
Gabon,Timber,Africa,OKOUMÉ,GABON SPECIAL ECONOMIC ZONE
The entrance of the Gabon Special Economic Zone
Gabon is a picturesque country with rich natural resources in West Central Africa. A privileged geographical location on the edge of the Congo Basin and bordered by the Atlantic Ocean on the west, it shares the Northern Boundary with Cameroon, Equatorial Guinea as well as the Eastern and Southern boundary with Republic of Congo.
On August 17, 1960 Gabon declared itself an independent nation following centuries of foreign intrusion and colonial confl icts. Since independence from French rule, Gabon has developed a relatively stable political and social environment. Fast-forward to the present day, and Gabon is emerging as something of a regional fl agbearer for foreign investment. With the continent increasingly opening up to international enterprise, the Central African nation is proving itself as an enticing place to do business. This is backed up by fi gures of inward FDI, which show that foreign direct investment in 2017 neared $1.5 billion, up signifi cantly from the $1.24 billion seen in 2016 and $990 million a year earlier.
With astonishing resources: Oil, Manganese (second largest producer in the world for high grade), tropical forest with more than 400 identified species and some major infrastructures, Gabon is the new face of the progressive and prosperous Africa. With a strategic location at the heart of Africa, Gabon offers an ideal gateway for entry to a regional market of 250 million consumers. This is why several multinationals and visionary SMEs have been attracted by its great assets and have decided to establish their business here.
GABON FOREST … HOME OF OKOUMÉ
Boasting the second highest forestry potential in Africa, Gabon's forests cover 22.8 million hectares, i.e. 88 per cent of the country’s land surface. The tropical forest offers enormous possibilities with a logging potential of 18 million hectares with more than 400 species including Okoumé, Okan, Padouk, Tali, Kevazingo. Until 2010 i.e. before ban on export of raw logs, Gabon was the largest exporter of raw wood in the region, and its sales represent 20 per cent of Africa’s raw wood exports. Gabon’s reserves of harvestable timber includes 130 million m3 of Okoumé, 25-35 million m3 of Ozigo, 20-30 million m3 of Ilomba, 15-25 million m3 of Azobé and 10-20 million m3 of Padouk. Other woods are Dibetou (Tigerwood or African Walnut), Movingui, Kevazingo and Zingana (Zebrano or Zebrawood).
Over the past ten years, Gabon has gone through a profound process of reform affecting the forest and environment. A new forest law has come into force that emphasises Sustainable Forest Management (SFM) as the overall approach in the forestry. Forestry is, and will remain, one of the pillars of Gabon's economic and social development. The private sector has become a major driver of industrial forest development and the export of forest products. Gabon has a low deforestation rate, forests rich in valuable timber species and among the best prospects for a healthy and sustainable forest industry. The timber industry is already the largest private sector employer, employing 28 per cent of the working population, and represents an extremely signifi cant growth potential.
Gabonese Republic is aiming to turn Gabon into a world leader in certified tropical timber production through an industrial strategy aimed at sustainably managing timber stocks and by promoting secondary and tertiary processing.
OKOUMÉ … THE PINK GOLD FROM GABON
Commercial forest harvesting in Gabon began as early as 1892, but only in 1913 was Okoumé, Gabon’s most valuable wood, introduced to the international market. Gabon supplies 90 per cent of the world’s Okoumé, known worldwide for the production of plywood. Aucoumea klaineana (Angouma, Gaboon, or Okoumé) is a tree in the family Burseraceae, found in equatorial West Africa in Gabon, the Republic of the Congo, and Rio Muni.
Okoumé is a medium-sized hardwood tree growing to 30-40 m tall with a trunk diameter in the range of 1 to 2.5 m. Its attractive appearance means that it is often used decoratively as the top surface veneer in panelling and furniture or, in solid form in luxury items such as boxes for cigars or other high value items (e.g. audio equipment).
Okoumé sawn wood
PHYSICAL AND MECHANICAL PROPERTIES
Widely recognised as one of the world’s best materials for rotary cut veneers, Okoumé timber is easy to work with and is as suitable for the manufacturing of furniture as for interior joinery. Moreover, it is a species of a very even colour, good bonding performances and good compatibility with finished products.
ADVANTAGES OF OKOUMÉ
• Uniform and single species
• Uniform colour and density
• Easy workability – no coarse grains
• Durable and resistant to dry wood borers so does not require any preservative treatment against dry wood borer attack.
• Suitable for staining and polishing without much variations across the grain and so better finish.
• Reliable and sustainable production with assured availability in quality and quantity.
• Sawn timber without much timber defects and therefore less wastage in end usage.
The Gabon Special Economic Zone is one of the largest industrial park in Sub-Saharan Africa
GABON SPECIAL ECONOMIC ZONE (GSEZ): THE BIGGEST WOODWORKING HUB IN AFRICA
In the last decade, African countries have promoted the idea of processing of natural resources within their countries so as to generate employment and give boost to their economy. With the same ideology, Gabonese Republic also banned exports of raw timber in 2010. Subsequently, Gabonese Republic has embarked on a journey to provide amenable ecosystem and infrastructure to facilitate the secondary and tertiary processing of timber and other natural resources within Gabon.
Witnessing a favourable investment climate, Olam International Limited in partnership with the Gabonese Republic decided to develop the Special Economic Zone in 2010. The Special Economic Zone spreads over 1126 ha at Nkok (20 km from the capital city of Libreville) and is the outcome of a shared vision of Gabonese Republic and Olam to eff ectively master the transition toward industrialisation of Gabon. It is one of the largest industrial park in Sub-Saharan Africa aimed at promoting sustainable production and processing timber and various other resources in the country.
A worker at a wood veneer factory in Gabon
INCENTIVES TO INVESTORS
Investors in GSEZ enjoys following fiscal incentives on their industrial investments:
• No Income tax for first 10 years and a preferential rate of 10 per cent over the next 5 years
• No Customs Duty on the import of equipment and machinery for the industry
• No VAT
• No Property Tax
• 100 per cent foreign ownership permitted
• 100 per cent exemption from capital gains tax
• Other relaxations and waivers:
¤ 50 per cent on Electricity/Power Tariff
¤ Relaxed Labour laws & flexibility in employing expatriates
¤ Reduced Export Duty for products manufactured in SEZ
¤ 100 per cent repatriation of profi ts
¤ Up to 25 per cent DTA sales permitted without any tax implications
In 2018, Gabon became the biggest producer of tropical veneer in Africa and the 2nd largest exporter of tropical veneer, mainly because of veneer plants established in Gabon SEZ.
SINGLE WINDOW CLEARANCE - A DIFFERENTIATOR
GSEZ facilitates to obtain all necessary regulatory and statutory clearances required for setting up an industry in the SEZ from various government departments by way of Single Window Clearance Facility; simplifying the process in granting speedy approvals to all units. To ensure that the investors do not have to run from one office to another, all concerned 22 departments / agencies from which approvals are required, are housed in a special building within the SEZ.
GABON SEZ, AS OF TODAY
SEZ at Nkok currently has 166 customers and the expected foreign direct investment is more than USD$ 1.7 billion. The investors who have invested so far are from 17 nationalities; out of which, more than 70 are from Asian countries like China, India, Malaysia, Singapore and UAE. The industries making SEZ their base are mainly industries into wood transformation (sawmill, veneer and plywood), ferro-alloys, construction materials, pharmaceutical, food processing, telecom equipment, waste and metal recycling and warehousing etc. To date, 72 companies are already under production and another 33 companies are in different stages of construction.
Gabon supplies 90 per cent of the world’s Okoumé, known in Europe and America for the production of veneer and plywood. Its demand is also picking up in Asia.
Africa is openingup to investments and Gabon, one of the most politically and economically stable country in the continent, has clearly taken the lead in attracting investors by doling out number of fiscal and non-fiscal incentives.
The Single Window Clearance Facility
Since year 2016, many veneer manufacturing companies established their veneer plants in Gabon SEZ and in 2018, Gabon became the biggest tropical veneer producer in Africa and the second largest exporter of tropical veneer in the world. With a jump of more than 75 per cent y-o-y growth, around 292,000 cubic metres of veneer was exported from Gabon SEZ itself in 2019. Gabon SEZ is already a veneer manufacturing hub and now plywood manufacturing has also started picking up in Gabon SEZ.
The past year also saw a lot of traction for plywood production. Three plywood plants with a cumulative production capacity of 100,000 cubic metres came into production in 2019 and construction of another five plywood plants started in 2019. The plywood export from Gabon SEZ itself is expected to cross 150,000 cubic metres in 2020.
Gabon Special Economic Zone has emerged as the West Central Africa’s manufacturing hub and entrepreneurs from across the globe are welcome to benefit from the business opportunities unlocked by Gabon SEZ.
For business, investment and trade enquiries, please get in touch with team of GSEZ at email@example.com or at +24102001086.
All images are credited to Gabon Special Economic Zone SA.