Planting forest 650 hectares per year

In most parts of Africa forestry is synonomous to the destruction of natural forests. Valuable ecosystems are lost and job creation remains limited.  Sustainable forestry is only starting to take hold in Africa but its potential is substantial.

Kilombero Valley Teak Company (KVTC) paves the way for sustainable forestry in Tanzania. It is a teak plantation established in 1993 by the British development financier CDC. Finnfund became a shareholder in 2000.

Today, teak trees grow on 7,500 hectares and some 650 hectares more are being planted each year.

The plantation is certified and adheres to the principles of sustainable forestry. A large portion of the company’s land is protected and teak trees are planted only in most suitable areas. The company supports local people through, for instance, financing schools and health care.

Teak is a high-valuable tropic hardwood which grows primarily in Myanmar but is planted in other parts of the world. Circulation period for teak in Kilombero is about 32 years. The company has invested in a saw mill and other processing capacity in order to make use of harvested wood material.

KVTC offers hundreds of jobs in one of the poorest regions of Tanzania. Once harvesting and processing begin in earnest, it will generate thousands of direct and indirect jobs. Teak has the potential of becoming a significant export item for Tanzania.

Country: Tanzania
Sector: Sustainable forestry
Year of Finnfund investment: 2000