Case Studies: Eastern Europe

Montenegro, Forestry Sector Development in Northern Montenegro Project, 2003-2006, Lux-Development

To support the Government of Montenegro in the transition to a market economy, this project aims to support the whole state forest sector, from planning and execution of forest resource management to the processing of final wood products including their marketing. The key areas in forest resources include forest management planning and seedling production. In the wood utilising sector the project aims to improve both the wood-raw material procurement and the processing capability of the industry. Selected state-owned forest enterprises and processing industries will be revitalised by providing logging and wood processing equipment, supplemented by appropriate training and technical assistance.
LTS provides the International Project Coordinator and project management and technical support. The IPC is responsible for organising the project implementation in the North East region and in Podgorica and reports directly to Lux-Development on Project implementation. This entails the physical establishment of the project, discussions with senior government officials on project implementation, modification and development of the Project workplan, identification and oversight of technical consultants namely forest sector planning professionals, seed specialists, nursery specialists, and logging experts.

Georgia, Development and Testing of a New Forest Auctioning System, 2003-2005, World Bank

A key activity of this project is to develop a new timber and non-wood forest product auctioning system. This includes the preparation of guidelines for sustainable utilisation of forest resources to increase revenue and maintain transparency. The project entails a revision of current legislation for natural resource utilisation, identification of the types of forest uses reasonable for auctioning, development of an interim regulation for auctioning, testing the new auctioning system and finalising the new forest resource auctioning regulation based on the results of the experiment.
LTS is managing this contract and is responsible for all outputs. Key tasks include: review of the legal framework of the management and utilisation of forestry resources; development of an objective and auditable model for the determination of reserve prices for auction sales; identifying priority types of forest uses for auctioning and other market based forms of forest resource sales; developing an objective and auditable model for auction sales in the State Forest Department; developing a draft New Forest Resource Auctioning Regulation; producing a detailed protocol and operating procedures manual; and testing and refinement of the new auctioning system.

Bosnia and Herzegovina, Design Support for a National Forest Programme, 2005, USAID

In Bosnia and Herzegovina (BiH) a National Forest Programme (NFP) process following a multi-stakeholder approach which sets out, implements and monitors national policy and strategy development for forestry, and which recognises the explicit contributions of the sector to national economic growth, environmental sustainability and poverty reduction is now being initiated. USAID-BiH has been active in the forest sector since the late 1990's, as a result of the work with firms in the wood processing sector undertaken within the Business Consulting, Business Finance and Cluster Competitiveness Initiative projects. The Cluster Competitiveness Activity (CCA) project is a 4 year initiative which aims to speed up economic growth in wood processing and forestry (as well as in tourism and agribusiness), building on the earlier work. LTS provided an Institutional Development Specialist to establish whether there is suitable support amongst stakeholders for an NFP process, and to design institutional arrangements governing the process and provide advice on a possible Partnership Agreement with the NFP Facility at FAO.

Croatia, Restructuring Study for the Strategic Development of State Forest Authority Hrvatske Sume, 2002, World Bank

A study to provide the State forest authority with a detailed, phased and costed plan for its future role, restructuring and strategic development. The study started with a review of the forest sector and assessed how it will impact on and be affected by the restructuring. Based on it, the organisation was reviewed, and restructuring options formulated and modelled. The study ended with an agreement on the optimal scenario for restructuring, and a detailed restructuring plan. LTS provided a specialist to help review international experience in restructuring state forest authorities, and to formulate, discuss and agree options for restructuring the organisation.

Georgia, Forest Sector Rationalisation and Institutional Development Study, 2002-2003, World Bank

The Government of Georgia with assistance from the World Bank has prepared the Georgia Forests Development Project. A key activity of this project is to prepare a detailed, phased and costed plan for the institutional and financial development of the State forest sector, aimed at improving its organisational and operational performance and increasing its economic and fiscal efficiency through the sustainable management of the nation's forests. The LTS consultants had the overall task of reviewing the current forest sector institutional and financial framework and to identify the optimal model for the future role, restructuring and organisational development of these institutions in the field of protection, regulation and state control of forests.

Latvia, Economic and Social Impacts of the Green-Field Pulp Mill Project Baltic Pulp Investment in Latvia, 2001, Private

LTS undertook an assessment of the impacts of a proposed USD1bn pulp mill investment in Latvia. The key outputs included a concise report outlining the more significant costs and benefits of the proposed investment; recommendations for institutional changes which would enhance the Government's capacity to fully appraise the economic and social benefits that might accrue, at regional and national levels, from inward investments and projects for which State support had been requested; and a Forest Sector model which will allow decision-makers to test changes in assumptions and to evaluate different scenarios for the development of Latvia's forest industry. Validation of forecasts of future timber supply was coupled with an assessment of the raw material needs of existing and other planned processing capacity was particularly important.

Armenia, Natural Resource Management & Poverty Reduction Project, 2001, World Bank

The project aims to strengthen the institutional capacity of natural resource management agencies, to provide support to a coherent legal, policy and economic framework as well as to build the capacity of local communities to better sustain their livelihoods. The project consists of three components: Participatory watershed management; forest management; and protected areas management and biodiversity conservation. LTS provided specialist expertise in forest policy, law, institutional review, protected areas and management planning for the preparation and appraisal of the forest and biodiversity components of this project. The consultants provided by LTS had the overall responsibility for the preparation of two components, resulting in a full project appraisal document for the World Bank.

Latvia, Support to Industrial Cluster Restructuring, 2001, Private

The project aimed at developing a long term competitive advantage for the Latvian forest based industries with full utilisation of the forest resources that have recognised sustainable management that is increasing in volume and quality. LTS developed a concept of long term vision within a competitive market, including the identification of key issues within the cluster development that is important to the long-term development of a competitive forest cluster. The assignment also high-lighted and demonstrated the importance of a long term vision for industrial sectors and how the administration can support the development and integration with focussed investment and support.

Latvia, Institutional Support for the Development of Private Sector Forestry, 1998-2000, EC

The project assisted the Ministry of Agriculture/Department of Forestry with implementing newly drafted forest policy in line with EU guidelines and ongoing European Forest Policy processes. Targeting the development of private forestry and promotion of the wood sector, LTS provided short-term inputs to establish the support and regulatory framework that will enable the newly drafted forestry policy to be implemented in preparation for accession to the EU. This included harmonising regulations and standards for cultivation and marketing and drafting a national land-use strategy for rural and regional development. The project identified appropriate incentives to stimulate private afforestation and reforestation and propose an institutional system for certifying of forest propagation material.

Europe Regional, Market Assessment of a Biotechnological Process for Timber, 2000, Private

LTS contributed to wider technical and commercial feasibility study of the potential for the Tri-Perm Process by undertaking a limited assessment of the European market for treated softwood and the potential for the substitution of pine by spruce in established markets. Consultants elaborated on the potential for market penetration by this new process. The research also established market trends, in the European Union, for various categories of preservative treated timber products.

Bulgaria, Industrial Review for Bulgarian Post Privatization Fund, 1999, EBRD

LTS assisted the Bulgarian Post Privatization Fund establish acompetitive position of a private client in its target markets. LTS supported the Fund Manager in undertaking an operational, financial and legal due diligence of the Company, which is required prior to presentation of an investment proposal to the Investment Committee. An assessment of the present situation relative to the best industry standards/practices was made. LTS reviewed Western European market for similar products (main producers, main markets, prices, production costs, distribution channels) and developed a marketing and distribution strategy: review of existing product line and propose a new and sustainable product line and marketing and distribution strategy for the Company.