Veneer enterprise brings prosperity to villagers

Members of the 50 poor families supported by the project.
Members of the 50 poor families supported by the project. Photo: UNDP Nepal

For the villagers of Ramechhap and Dolakha districts in central Nepal, production of Veneer is a new found successful enterprise. Veneer is the thin layer produced from logs of soft wood that is used for making plywood.

The enterprise is run through a public private partnership approach by seven community forest users group and a local private veneer company, supported by UNDP Micro-enterprise Development Programme (MEDEP).

Highlights:

  • Since it began, MEDEP has developed over 32,000 micro-entrepreneurs (68% women, 20% Dalits and 67% youth) and created about 37,000 sustainable jobs.
  • The success of MEDEP has let the government to allocate substantial funding to the local government bodies ($3 million in fiscal year 2010/11) to implement the MEDEP model in 45 districts under its new Micro-enterprise Development for Poverty Alleviation Scheme. The government plans to replicate the MEDEP model in all 75 districts of Nepal in five years time.

Between 2008-2010, MEDEP started working in the selected two districts with those villagers mostly affected by the Khimti  river. Veneer enterprise was identified as feasible and profitable hence MEDEP explored options to launch a veneer enterprise out of the ‘Uttis’ tree (Alnus Nepalensis), found locally in the private and community forests. After a number of meetings and interactions with different stakeholders, a veneer enterprise by the name of Jattapokhari Multipurpose Timber Processing and Suppliers Private Limited was established in 2010.

MEDEP provided NRs 1,024,000 (US$ 11,505) to 50 hard core poor families from the Khimti river affected villages namely— Namadi, Betali, Rasnalu and Jiri ,for investing in the enterprise. In addition, the entrepreneurs themselves invested NRs 250,000 (US$ 2,809). Other shareholders of the enterprise comprise of seven community forestry users' groups (CFUGs) and a local private veneer company. The total investment in the enterprise was NRs 5,149,000 (US$ 57,854). The Company Management Committee comprises of representatives from all groups.

The enterprise had a turnover of Rs 10,736,410 (US$ 120,633) during the last fiscal year with a net profit of Rs 2,644,181 (US$ 29,710) along with a stock worth Rs. 4 million. Of the total net profit, 40 percent was distributed as bonus to the shareholders and the remaining amount has been added to the current capital. The enterprise has provided direct employment to 15 people and indirect employment to over one hundred poor people.

Recently, the entrepreneurs promoted by MEDEP received Rs. 10,000 (US$ 112) each as bonus. One of the shareholders– a MEDEP entrepreneur said, "We were skeptic about a year and a half ago when each of us invested Rs. 5,000 (US$ 56) in this enterprise but now after receiving Rs. 10,000 (US$ 112) as bonus, we have realized that an investment in the right venture bears fruit.”

The Committee has decided to purchase at least 50,000 cubic feet of timber; out of which at least 10,000 cubic feet will be purchased from the poor shareholders. They have also decided to sell veneer from Charikot, the district headquarters of Dolakha, without compromising on market price; and to run auxiliary enterprises like bio-briquette, furniture, and wooden mask making as by-products of the enterprise.