Terms of Reference: Consultant for a Rattan Business Feasibility Assessment in Hutan Harapan
1. Background
Hutan
Harapan is an ecosystem restoration concession (ERC) covering 98,000
hectares of formerly commercially logged lowland tropical forest in
central-south Sumatra, Indonesia. Hutan Harapan is rich in biodiversity
and an important habitat for 26 endangered and critically endangered
species. Hutan Harapan is also important for 228 Batin Sembilan families
who live in and depend on the forest for small scale swidden
agriculture, gathering non-timber forest products (NTFPs), rubber
tapping and hunting. In addition, approximately 14,158 people live in
six villages that are located within 10 km of the concession boundary.
They interact with the forest through gathering NTFPs or are dependent
on it for its ecosystem services.
The
forest restoration license issued by the Indonesian government allows
the concession holder, a company called PT. REKI, which was formed by a
consortium of three NGOs, (Burung Indonesia, Birdlife International and
the Royal Society for the Protection of Birds (RSPB), to manage and earn
revenue from the Hutan Harapan through the sustainable harvesting of
NTFPs, ecosystem services, eco-tourism and other non-exploitative
resources. The concession holder has a responsibility to support the
livelihoods of the indigenous people (Batin Sembilan) living in the
concession area. Nevertheless, the options for a substantial return on
investment, through direct market mechanisms and within realistic time
scales are relatively few and require significant levels of innovation
and entrepreneurship.
A
potential commodity to be developed in HH is rattan. Rattan is used to
make goods such as furniture for national and international markets.
Rattans are generally lightweight, durable and to a certain extent,
flexible. Because of its flexibility and its long stems of great
strength, rattan is a primary binding material. In its unsplit form, it
is used to provide structural support in furniture and construction.
Once split, rattan has a great variety of uses, including weaving into
mats and baskets of all sizes and shapes and to make furniture.
Rattan
grows in many parts of Hutan Harapan, often deep in the forest and
therefore it not easily located. It is however still collected by the
indigenous Batin Sembilan forest people who then sell it to middlemen.
In 2015, Hutan Harapan piloted a rattan processing project during which
rattan was bought from the Batin Sembilan, processed and shipped to
Cirebon in central Java. Cirebon is the centre for rattan processing in
Indonesia. Although the Batin Sembilan received a higher price for their
rattan, HH operated at a loss because the market price for rattan was
so low. The pilot only lasted 6 months when seed funding came to an
end. Although not financially viable at that time due to low volumes
and low prices, this experience allowed HH to develop its processing and
marketing skills while building trust with the Batin Sembilan.
Given
the limited information and analysis of the market potential of rattan
in HH, PT REKI would like to conduct an assessment to gain a more
comprehensive and in-depth understanding. The assessment will be used to
guide its decisions on whether rattan is a viable commodity to be
developed in the current market context.
2. Objectives of the assignment
To determine if rattan is a good business opportunity for PT REKI.
3. Scope of the assignment
a. Conduct
a financial and risk analysis on the business opportunity. This
includes determining capital expenditure requirements, creating
financial projections based on different scenarios, and a SWOT analysis.
b. Conduct
a technical feasibility assessment. This includes determining the
potential volume of supply that could be obtained from the concession,
assessing management capacity and other implementation requirements.
c. Conduct a market analysis to determine potential buyers and partners, and the appropriate business model for PT REKI.
d. Provide recommendations to PT REKI for the next steps.
4. Output and Deliverables:
The consultant is expected to deliver the following
a. A
report and a presentation on the rattan business opportunity
assessment. This should include, but is not limited to, information on capital
expenditure requirements, financial projections based on different
scenarios, SWOT analysis, and potential supply volume from the
concession, implementation requirements, and a market analysis.
b. Recommendations
to PT REKI on whether the rattan opportunity is viable, and if yes,
provide an outline of the possible business model.
5. Qualifications:
- Master’s degree in the relevant field of expertise (Forestry Management, Business ) with 10years of relevant experience
- Indonesian National with good knowledge of and the market potential for rattan in Indonesia.
- Ability to prepare clear and concise reports and to analyses and interpret source information and data.
- Track record in providing high quality consultancy services or forest based business advice is an advantage.
6. Duration and phasing
The final report is expected to be submitted by 15 October 2017. The table below shows the main deliverables and respective deadlines:
Activities
|
Deliverables
|
Recommended Deadlines
|
Recruitment of
consultant
|
Technical and financial proposals
submitted by consultants describing their understanding of the assignment, their capacity
to conduct the study, proposed
methodology, work plan and budget
|
August 10 2017
|
A contract signed between PT REKI and the
Consultants
|
August 20 2017
| |
Study planning
|
An inception report submitted by the
consultants and approved by PT REKI that
specify study questions, methodology, tools,
work plan with task assignment and
timelines, and report outlines
|
August 28 2017
|
Conducting study
|
Conduct interviews, field visit (5 days in field, 2 days travel)
|
2nd wk Sept 2017
|
Draft report and presentation
|
A draft report is submitted to PT REKI (in English)
|
30 Sept 2017
|
Finalization of the
report
|
A final report is submitted in English addressing all research questions as indicated in the TORs and approved inception report
|
15 Oct 2017
|
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