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Assessment of wood product value chains and recommendations for the Mongolian timber industry
|Location :||Ulaanbaatar, MONGOLIA|
|Application Deadline :||08-Dec-17 (Midnight New York, USA)|
|Additional Category :||Sustainable Development and Poverty Reduction|
|Type of Contract :||Individual Contract|
|Post Level :||International Consultant|
|Languages Required :||English|
|Starting Date :|
(date when the selected candidate is expected to start)
|Duration of Initial Contract :||60 days|
|Expected Duration of Assignment :||Dec 2017 - Mar 2018|
The Government of Mongolia has committed to a green development path, notably through the preparation and approval of the Green Development Policy, Policy on Forests, and Policy on Sustainable Development Vision in Mongolia. REDD+ has the potential to contribute to green development by protecting global environmental resources (forest carbon stocks and biodiversity), helping to reverse land degradation, promoting the improvement of rural livelihoods and aiding adaptation to climate change. On the basis of the above international and national contexts, the country has quickly taken steps since 2011 to start implementing REDD+ readiness activities, including the preparation of its National REDD+ Readiness Roadmap, which was officially adopted by the MEGDT in June 2014. To support this effort, the UN-REDD Mongolia National Programme (NP) was established to provide technical assistance to the Government of Mongolia in implementing the National REDD+ Readiness Roadmap through which to prepare Mongolia’s REDD+ Strategy and establish other key elements and information streams required under the UNFCCC to make REDD+ operational in the country.
Forest Resources in Mongolia
The total boreal forest area, located in the northern part of Mongolia, is 13.1 million ha of boreal forest (FRDC, 2016) or 9.3 million hectares of well-stocked forest (MET, 2016). These forests are largely comprised of Siberian larch, pines and birch forests with an average volume of approximately 164 cubic meters (MET, 2016). These forests are affected by various drivers of deforestation and degradation, including human induced forest fire, forests insect pests and grazing, and environmental factors often linked to global warming, which result in precipitation change, permafrost melting, drought, increased risk and vulnerability to fires and pests. Strategies for enhanced forest management include improved forest fire and insect control methodologies, and maintaining and enhancing forests through both protection and sustainable forest harvesting. Forest harvesting and thinning improves ecosystem health, reducing competition amongst trees for water and making more resilient to fire and pests. In addition, it can lead to wider contribution to the Mongolia’s sustainable development goals, including reduced poverty, employment opportunities, renewable energy and enterprise opportunities.
Considering Mongolia’s current harvest, which is approximately 6-800,000m3 per year, and the available resources it is feasible that a sustainable supply of timber and wood products could be maintained to support a wood industry linked to certified and sustainable forest management. However, forestry is a long-term activity which must be guided by far-sighted strategy and planning to ensure the balanced development of resources and achievement of sustainable development goals. An increase in sustainable harvest of wood must also be accompanied by increased demand within the country, and it must be competitive against cheap imports of timber and cheap wood products from neighboring countries which make Mongolian products uncompetitive. The wood processing industry has a long historical background starting from 1924 and it considered as one of the oldest industries in Mongolia. It went through period of over utilization of the forests in soviet times, which resulted in an over emphasis on protection and conservation in the forest sector, but as shown in other boreal forests countries, an active management approach is advantageous for helping forests become more resilient.
Wood products are widely used by construction, energy, mining, and agricultural sectors. At present, approximately 128 enterprises are actively operating and have more than 4,000 are employed in this sector. In terms of investment, 87 enterprises are domestic invested companies and 41 enterprises are joint ventures. Eighty-five enterprises out of 128 are operating in rural areas, 43 enterprises exist in Ulaanbaatar. The government’s current approach is to promote the import of wood and raw materials by exempting them from import customs duty. However, this does not take advantage of Mongolia’s own resources and misses great opportunities to develop income streams from sustainable forest management which has wide socio-economic benefits on forest health, maintaining ecosystem services and in provision of enterprise opportunities and employment.
However, despite the promise of a competitive and sustainable wood processing sector in Mongolia, it is nevertheless constrained by various problems. The landlocked position of the country and the transport /transit problems are an obstacle to foreign trade, and the forest industry serves mainly home markets. There is also constraining factors for development of new materials, since cheap imports may be acquired from neighboring countries, rendering home business uncompetitive. This raises the question, what products should Mongolia develop to become competitive internally and for export, and what conducive forest management and economic policies need to be developed to create an enabling environment.
A review in 2005 highlighted that considerable investments were needed in both the forest management and industry sectors. Forest management needs to ensure proper sustainable management is conducted, road infrastructure is suitable and that environmental safeguards are applied. Forest industries required considerable input for capacity in technology, markets, entrepreneurship and policy environment. It highlighted that both a need for the restoration or renewal of existing industries could be achieved, in parallel, with development of new higher technological or for new products. The current condition of the industries is not sufficient to satisfy the future demand of any increase in wood harvest and quality requirements for any export drive investments. It requires a long-term view and considerable expertise in market development, technology and capacity building, which should also be combined with the REDD+ strategies program to build capacity, ensure forest management is improved, certification and enabling policies such as green procurement and investment policies.
Given the results of the National Forest Inventory there is scope and potential for increasing Mongolia’s sustainable timber and wood product harvest as part of a long-term strategy, for sustainable development and to enhance ecosystems. However, a large constraint is that the wood product industry is not innovative, competitive or utilizing its potential. The REDD+ program is developing a National REDD+ Strategy which will also include development of private sector opportunities in the wood processing sector in order to provide greater income, employment opportunities, increased revenue and contribute to Mongolia’s low carbon pathway for sustainable development. There are potential private sector or impact investment funds that could support existing entrepreneurs if they could be identified, but in order to reduce market risk and to make the products competitive a wood product value chain and enterprise analysis will be undertaken.
Duties and Responsibilities
The aim of this study is to do a rapid market study and evaluation of the current wood processing industry, and to provide recommendations and insights into current and future wood supply, and recommendations for the wood sector to focus on.
Of concern, is that with large industries in neighboring countries and Mongolia’s land-locked nature it is at a competitive disadvantage, but with large timber resources it has an available resource for sustainable enterprise development. The assessment should provide a framework of recommendations that can be adopted by government and private partners for contributing towards wood sector development.
It is anticipated that the recommendations may also be followed up by UN_REDD or other partners.
The study will be undertaken by a National and International Consultant. The International will be responsible for team leadership, design and major technical expertise, in particular, providing an overview of the international wood processing sector and applying this to evaluate the Mongolian context.
The National Consultant will be responsible for providing expertise on Mongolian wood processing sectr, analysis of Mongolian policies, organizing meetings, translation of the report, providing technical feedback to the International Consultant.
The studies objectives are as follows:
The International Consultant will be supported by a National Consultant and the Project Management Unit.
The study should be conducted with support of an Advisory Group which will comprise a number of stakeholders from wood processing, government, banking/commerce and policy stakeholders in order to get support and buy0in for the study, and ensure good research findings.
The following tasks will be undertaken:
1. Literature Review
To undertake a literature review of reports analysing financial issues to summarise opportunities related to the REDD+ or forests sector and to identify any further research, recommendations that need to be undertaken to support the Wood Sector.
2. Supply Demand Analysis
The supply demand analysis should look at where are wood produced, harvested and utilised. In conjunction with National Forest Inventory analysis the study should work out current and future predictions for supply and demand of different wood products, timber and volumes. The study should also include an analysis of current and future trends in the industry, with respect to Mongolian wood products and future market potential.
3. Value Chain Analysis:
The products expected to be considered include, but are not restricted to:
a. Traditional wood products (sawn timber for construction, sawn timber for non-structural application, utility poles, railway sleepers, fence posts/small poles, pallets, ger etc.)
b. Engineered wood products (plywood, block board, MDF, chipboard, veneers, tiles etc.)
c. Biomass fuel (industrial fuelwood, industrial charcoal, industrial briquettes/pellets, household biomass fuels)
d. Furniture and ger construction
4. Market Constraints and Industry Recommendations –
The study should look at constraints and recommendations for the wood processing and enterprise sector, in particular related to product development, markets, financing, and policy constraints. The study should particularly identify constraints and recommendations in marketing and financing issues.
5. Identify Private Sector Partners
Identification of private sector partners who may be linked to sustainable production of timber, and these that may require impact investment grants or loans for development of public private sector partnerships or development of technologies. Recommendations should be made on developing the wood sector into profitable business especially in respect of constraints, such as transport, competition from neighbors, policies favorable for import of timber, lack of implementation of green procurement law and other issues.
6. Focus Groups, Consultation and Review Workshops
It is expected that the consultant team conduct a full stakeholder consultation process, which would be improved through the formation of an Advisory Group consisting of private sector and government stakeholders who will guide the process. At least one formal advisory workshop should be conducted and a validation workshop at the end to present the major findings.
The international consultants will deliver the following items; all items will be validated through a consultation and review process, and with final approval from PMU technical staff, the Chief Technical Advisor. The following deliverables shall be produced:
The international consultant will work closely with and under the overall guidance of the Chief Technical Advisor of the UN-REDD Mongolia National Programme, Program analyst, UNDP CO and Regional Technical Advisor, UN-REDD Programme. All deliverables will be approved by Chief Technical Advisor, UN-REDD Mongolia National Programme and Program analyst, UNDP CO. The International consultant will coordinate the work and provide technical guidance to the national consultant to deliver above described outputs. Logistical support such as translation and organization of meetings will be provided by UN-REDD Mongolia National Programme management unit.
Duration of Assignment
The work is expected to start in December 2017 and be concluded by end of March 2018.
The overall duration of the assignment covered by this ToR has been estimated not to exceed 60 days, including 30 days in country and 30 days related desk-work and online consultations to review documentation and finalize final report.
The payment of the consultant will be done in three instalments upon receiving the abovementioned deliverables, as indicated in the table below.
Required Skills and Experience
The international consultant will undertake conceptual leadership in close coordination with the national consultant. This includes overall coordination of all deliverables, leading the development and being ultimately responsible for all written deliverables.
Required Skills and Experience
Excellent writing, editing and oral communication skills in English.
Application Procedure (You can upload one pdf file to this website or may send to the designated e-mail to email@example.com)
A. Financial Proposal and Schedule of Instalments
A total Lump Sum Fee should be submitted which includes the all-inclusive fixed total contract price supported by a breakdown of costs, as per template provided.
Note: Instalments will be based on invoices on achievement of agreed milestones i.e. upon delivery of the services specified in the TOR and certification by the UNDP. While preparing your submission, please use the “Template for Confirmation of Interest and Submission of Financial Proposals” found on the right side of the procurement webpage for downloading. No costs other than what has been indicated in the financial proposal will be paid or reimbursed to the consultant.
If an Offeror is employed by an organization/company/institution, and he/she expects his/her employer to charge a management fee in the process of releasing him/her to UNDP under Reimbursable Loan Agreement (RLA), the Offeror must indicate at this point, and ensure that all such costs are duly incorporated in the financial proposal submitted to UNDP.
B. Recommended Presentation of Offer
For purposes of generating Offers whose contents are uniformly presented and to facilitate their comparative analysis, it is best to recommend the preferred contents and presentation of the Offer to be submitted, as well as the format/sequencing of their presentation. The following documents may be requested:
Criteria for Selection of the Best Offer
Criteria for selection of the best offer will be based on Combined Scoring method – where the qualifications and methodology will be weighted a maximum of 50%, interview – 20% and combined with the price offer which will be weighted a maximum of 30%.
UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.