Viability of artisanal timber milling: cases from Ghana

Abstract

Purpose

A key strategy in the policy of saw millers and artisanal millers supplying the domestic market with legal and sustainable lumber is the transformation of chainsaw operators into legal artisanal millers to stop the production of illegal timber and supply only authorized wood to local trade points. The challenge, however, is how to develop the concept of its viability and acceptability to the chainsaw operators. Specifically, existing and potential investors’ knowledge about the possible costs and revenue is non-existent. This study aims to examine the financial and economic viability of the artisanal timber milling (ATM) business in rural Ghana.

Design/methodology/approach

Using data from three operational artisanal milling companies in Ghana, net present value, internal rate of return, profitability index and payback period were used in analyzing the viability of artisanal timber milling.

Findings

The results showed that the ATM business is financially and economically viable, attractive and profitable.

Social implications

ATM business has the potential to create more jobs in the timber industry, reduce illegalities in the forestry sector and improve the living standard of individuals used by the sector.

Originality/value

As part of ATM’s medium and long-term strategies, the study encourages stakeholders to consider assisting existing and potential actors who have the passion to venture into this business to acquire concessions and financial support from financial institutions.

Citation

Wongnaa, C.A., Nyarko, M., Addison, M. and Awunyo-Vitor, D. (2022), "Viability of artisanal timber milling: cases from Ghana", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 16 No. 2, pp. 278-298. https://doi.org/10.1108/JEC-08-2020-0153