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Page 1: DETERIORATING NATURAL RESOURCES – FORESTS

WESchool, MIM (Part time) Sem 6

Ryan Rodricks, Roll No 67

[DETERIORATING NATURAL RESOURCES – FORESTS] India Inc. is faced with four major business challenges. In this abstract I’ve taken one of the business challenges, deteriorating natural resources – forests, and provided two examples of how this business challenge has been overcome by the corporates.

Page 2: DETERIORATING NATURAL RESOURCES – FORESTS

WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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Ryan Rodricks, Roll No 67| Internal

Contents What are natural resources and where do forests fit in? .............................................................. 2

Forests in India: A deteriorating natural resource ...................................................................... 2

Social forestry, an answer to forests as a deteriorating natural resource ..................................... 3

Case studies: Paper industry of India Inc. and Social Forestry ....................................................... 3

The ‘growing’ need ...................................................................................................................... 3

The business need in Paper industry ....................................................................................... 3

The social need ........................................................................................................................ 4

Case study 1: ITC PSPD – Social and Farm Forestry initiative ..................................................... 4

About ....................................................................................................................................... 4

Initiative ................................................................................................................................... 5

Case study 2: JK Paper Ltd – Social Farm Forestry initiative ....................................................... 5

About ....................................................................................................................................... 5

Initiative ................................................................................................................................... 6

Page 3: DETERIORATING NATURAL RESOURCES – FORESTS

WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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Ryan Rodricks, Roll No 67| Internal

What are natural resources and where do forests fit in? Wikipedia defines “natural resources” are what occurs naturally within environments that exist

relatively undisturbed by humanity, in a natural form. Natural resources are derived from the

environment. Some of them are essential for our survival while most are used for satisfying our

wants.

To explain this first we need to understand what a resource is. Resource is something through

which we derive benefit. Benefit need not be monetarily only. It can be anything that meets

needs or want, ensures the proper functioning of a system or enhances our way of life. So

understanding what resource is, we can stretch it for natural resources that such a resource is

what can be available naturally.

Forests are classified as a biotic natural resource. Forests are obtained from the

biosphere/nature. Biotic resources include forests and animals, fossil fuels like coal and

petroleum (because they are obtained from decaying organic matter).

A forest is basically an area with a high density of trees. They function as habitats/homes for

organisms/animals/mammals, hydrologic flow modulators (shaping the flow of rivers and water

beds), and soil conservers, constituting one of the most important aspects of the biosphere.

Forests in India: A deteriorating natural resource Significant forest products of India include paper, plywood, sawn wood, timber, poles, pulp and

matchwood, fuel wood, sal seeds, tendu leaves, gums and resins, cane and rattan, bamboo,

grass and fodder, drugs, spices and condiments, herbs, cosmetics, tannins.

Forestry in India is more than just about wood and fuel. India has a thriving non-wood forest

products industry, which produces latex, gums, resins, essential oils, flavors, fragrances and

aroma chemicals, incense sticks, handicrafts, thatching materials and medicinal plants. About

60 % of non-wood forest products production is consumed locally. About 50 % of the total

revenue from the forestry industry in India is in non-wood forest products category.

Forestry in India is a significant rural industry and a major environmental issue. Dense forests

once covered India. In terms of availability of forest land per person in India today, the rate is

one of the lowest in the world at 0.08 ha, against an average of 0.5 ha for developing countries

and 0.64 ha for the world. Forest degradation is a matter of serious concern.

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WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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India has a dominant rural population that still depends largely on fuel wood and other biomass

for their cooking and heating. This demand for fuel wood will not come down but the area

under forest will reduce further due to the growing population and increasing human activities.

Social forestry, an answer to forests as a deteriorating natural resource Social forestry is the management and protection of forests on barren lands with the purpose

of helping in the environmental, social and rural development.

The National Commission on Agriculture, Government of India coined the term in 1976. India

took upon social forestry with the aim of reducing the pressure off currently existing forests by

planting trees on all unused and fallow land.

The main objective is to

1. Improve the environment for protecting agriculture from adverse climatic factors,

2. Increase the supply of wood fuel for domestic use, small timber for rural housing, fodder

for livestock, and minor forest produce for local industries,

3. Increase the natural beauty of the landscape; create recreational forests for the benefit

of rural and urban population,

4. Provide jobs for unskilled workers and

5. Land rehabilitation

6. Finally, its object is to raise the standard of living and quality of life of the rural and the

urban people.

Case studies: Paper industry of India Inc. and Social Forestry

The ‘growing’ need

The business need in Paper industry

Wood is a major raw material for pulp and paper industry. Earlier, natural forests provided a

ready and available source. However, with increasing deterioration of this natural resource has

resulted in shrinkage and deforestation. This resource has drastically dwindled over the years.

Due to the efforts of the Indian government to save the forest cover, unprocessed wood has to

be imported from places like Manilla. India imports up to 60% of its requirement of

unprocessed wood. This has cost implications on firms that rely on this for raw material.

Imports means the rural industry takes a hit and fallow lands remain unused as the standard of

living declines.

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WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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Ryan Rodricks, Roll No 67| Internal

The industry has invested in technology and R&D that can help in better production of hybrids.

This enable that the raw material can be readily available, using products like fertilizers and

pesticides made by subsidiaries. These hybrids are aimed at high productivity.

The social need

Deforestation is also not good for the environment and agriculture. Most industries dealing

with wood also have subsidiary associations that thrive on agricultural produce. The green

cover ensures a positive boost to the climatic factors like rain, soil erosion etc. to help better a

good agricultural yield. Also, the emission of greenhouse gases can be controlled with a better

forest cover. The carbon footprint can be reduced.

Wastelands can be regenerated thus helping enhance farm incomes by providing attractive

land-use alternatives and generating employment opportunities.

A good green cover over the landscape can boost tourism among natural enthusiasts. A

booming tourism can also help local business and can generate livelihood options for the locals.

This also helps in the habilitation of wild life in the area; boosting the preservation of species

that are nearing extinction.

Farmers with agricultural produce once a year can benefit from Agroforestry, which is growing

of forest tree along with agriculture crop on the same piece of land. This will help them with

alternate sources of income than just their produce.

Case study 1: ITC PSPD – Social and Farm Forestry initiative

About

ITC's Paperboards and Specialty Papers Division is India's largest, technologically advanced and

most eco-friendly, paper and paperboards business. The business caters to a wide spectrum of

packaging, graphic, communication, writing, printing and specialty paper requirements through

its four world-class manufacturing units, 7sales offices and a network of more than 50 dealers

in India, along with an international trade network of 18 distributors / agents and 4 finishing

operations close to the market for providing faster service to the customers.

Having pioneered many specialty applications, ITC's Paperboards and Specialty Papers business

enjoys market leadership in the value-added paperboards segment, and also has a significant

share of the Indian fine papers market. It is the largest exporter of coated boards from India.

Resource:

Page 6: DETERIORATING NATURAL RESOURCES – FORESTS

WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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Ryan Rodricks, Roll No 67| Internal

http://www.itcportal.com/businesses/paperboards-and-specialty-papers.aspx

http://www.itcgreenpapers.com/default.aspx

Initiative

ITC’s Social and Farm Forestry Initiative is a story of business innovation and inclusive growth

ITC’s paper and paperboards business is in constant need of a cost-effective and sustainable

raw material base. Linking this need to the socio-economic requirements of the catchment

area, ITC developed its Social and Farm Forestry initiative.

Programmes under this initiative provide sustainable livelihood opportunities to rural

wasteland owners by assisting them to convert their wastelands into pulpwood plantations.

To ensure the commercial viability of these plantations, ITC’s R&D developed high-yielding

clonal stock with shorter harvesting cycles - 4 years against 7 years for standard saplings.

Today, this programme covers over 165,000 hectares and has provided over 74 million person-

days of employment, apart from supplying about 59% of ITC’s total pulpwood requirements -

contributing significantly to the competitiveness of ITC’s paper and paperboards business.

In addition, the plantations have also sequestered over 3,690 KT of CO2 and played a major role

in maintaining ITC’s carbon positive status over the past 8 years.

This model of responsible forestry has also garnered for ITC the membership of the prestigious

Global Forest Trade Network of the WWF.

Resource:

http://www.itcportal.com/sustainability/embedding-sustainability-in-business.aspx

Case study 2: JK Paper Ltd – Social Farm Forestry initiative

About

A leading PAPER MANUFACTURER in India with a combined production capacity of 2,90,000

tonnes Per annum. It operates two integrated Pulp and Paper Mills in India: JK Paper Mills in

Rayagada (Orissa), in eastern India and Central Pulp Mills in Songadh (Gujarat), in western India.

Both the units are ISO 14001:2004 certified for their eco-friendly operations and OSHAS

18001:2007 certified for Health, Safety and Security. 1st Integrated Pulp and Paper Company in

India conferred with TPM Excellence Award by Japan Institute of Plant Maintenance.

Page 7: DETERIORATING NATURAL RESOURCES – FORESTS

WESchool, MIM (Part time) Sem 6 Deteriorating natural resources – Forests

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Ryan Rodricks, Roll No 67| Internal

Resource:

http://www.jkpaper.com/index.php?option=com_content&view=article&id=1&Itemid=3

Initiative

JK Paper Ltd.’s thrust on environment is visible in various eco-friendly processes at their plant

sites for production of pulp and paper. This is done by adopting modern technology and

process innovations.

The farm forestry development program, started in 1991, has created employment and

livelihood opportunities for significant number of people even as the company sources its raw

material requirement from the farm forestry on low-productive land.

Through its R&D work, they have developed a large number of improved varieties. These

provide 2-3 times higher yield as compared to traditional seed route plantations.

JK Paper has been continuously pursuing enriching the green cover through its Social Farm

Forestry drive. Till date in excess of 81000 Ha of land has been planted covering states of

Orissa, Andhra Pradesh, Chhattisgarh, Gujarat, Maharashtra and West Bengal. On average it has

added 7000 Ha annually to its plantation drive by distributing over 40 million saplings to

farmers. This farm forestry activity since 1990 has cumulatively provided income for over

45,000 farmers.

JK Paper have signed an Emission Reduction Purchase Agreement (ERPA) with the Bio Carbon Fund of the World Bank covering 3500 Ha mainly owned by small and marginal farmers associated with JK Paper's plantation program. This program provides additional income for participating farmers, besides reducing harmful greenhouse gases and global warming

Resource:

http://www.jkpaper.com/index.php?option=com_content&view=article&id=32&Itemid=33

This model of responsible forestry has also garnered for JK Paper the prestigious Global Peacock

Award for Environment Management.