Opportunities and limitations for community forest enterprises : case of TIP Muebles, Oaxaca, Mexico.

Graduation date: 2010The fact that 80 percent of Mexican forestlands are under common ownership impacts the competitiveness of the forest products industry and forest sustainability. Community forest enterprises (CFE) are a heterogeneous group of forest industries managed by indigenous and local communities for livelihood and profit. Many CFEs face inner competitiveness problems, challenging public policies, and structural lack of trust within the industry. Despite the tendency to operate in isolation, Textitlán, Ixtlán and Pueblos Mancomunados, three CFEs with similar levels of organization, management and manufacturing technology, have\ud vertically integrated from forest management to retailing furniture through a company: TIP Muebles. The case illustrates the factors impacting entrepreneur CFEs to integrate needs of\ud the market, the challenges of manufacturing FSC furniture within a collective management model of social capital. While external regulatory frameworks and macro environment forces influence industry performance, CFEs need to innovate and adapt their decision-making structure to change and some are trying new opportunities in the marketplace. The results of this research show that the main challenges are related to human capital, the\ud current approach of forestry regulation for wood transformation, and the decisions based on tradition rather than efficiency. The studied CFEs are resilient and barely surpassing the profitability threshold despite the challenges identified. Adaptation of their decision-making structure allows them to face the changing dynamics of the market. Democratic approaches\ud to decentralization of forest policy, trust development between social and private enterprises,and an improvement in internal CFEs systems, offer opportunities for competitiveness in\ud the forest products industry for CFEs