Bhutan has about 70 per cent of its land area under forest cover, giving the country enormous potential for a thriving wood industry. Yet, a report by the National Council’s Special Committee shows that the country continues to import wood products worth millions every year. Challenges such as timber supply shortages, outdated technology, and restrictive rules and regulations are holding the sector back.
According to the council’s Special Committee for Business Plus, Bhutan’s forest produces nearly six million cubic metres of timber annually which is equivalent to around 200,000 truckloads, but much of this vast resource remains underutilised.
Phuntsho Rapten, the Chairperson of Special Committee for Business Plus said, “Our country has a huge forest cover and different kinds of trees grow here. Looking at reports, despite the annual forest growth, only about two per cent is harvested. It has great potential but we are not making use of it.”
Wood imports have sharply increased in recent years from about Nu 2.4bn in 2020 to around Nu 4.4bn in 2022. Imports declined to Nu 3.7bn in 2023, but rose again to Nu 3.8bn last year.
The Review Report on A Few Key Sectors of Economy stated that the major imports include wood charcoal, plywood, and wooden furniture.
The committee’s report highlights several systemic barriers.
The Chairperson of the committee said, “Timber extraction and distribution are handled by a single state-owned enterprise, the National Resources Development Corporation, resulting in monopoly. And only half of the total harvested timber is distributed to private wood industries.”
As a result, private wood industries struggle with inconsistent timber supply, high import dependency, and limited export opportunities.
According to the committee, the wood based industry is further challenged by intense competition from imported products, a shortage of skilled labour, and restrictive hiring rules, such as allowing only one foreign carpenter for every three Bhutanese carpenters.
Outdated technology, low production volume and high production costs also hinder growth.
To overcome these challenges, the committee recommends diversifying and expanding timber supply channels to meet growing domestic demand and reduce dependence on imported wood products.
The committee’s Chairperson added that “The government should find a solution and increase the share of timber distributed to private wood industries beyond the current 50 per cent. They also need support in terms of essential infrastructure.”
Since charcoal makes up nearly 77 per cent of total wood related imports, the committee also recommends allowing domestic charcoal production units to operate nearby logging and harvesting areas.
Deliberations on the review report will continue on Monday.
Deki Lhazom
