Financial Analysis of a Tropical Forestry Enterprise

This study analyzes the financial viability of three forest management scenarios for the Deramakot Forest Reserve in Sabah, Malaysia: Reduced Impact Logging (RIL), Low Impact Logging (LIL) and Conventional Logging (CL). Three sustainable Annual Allowable Cuts (AAC) were calculated with the process-based model FORMIX3Q. The study reveals that harvesting is feasible even under the current degraded conditions and suggests an AAC of 10,000 m3/year for at least 40 years. The integration of a costing module allowed combining the surveyed cost and revenue-related data of the harvesting scenarios with key data, e.g. the AAC, as well as a detailed analysis with financial indicators, and a sensitivity analysis. The module also provides the total balance sheet and internal cost distribution.

Autorentext

The Authors: Sören Schopferer was born in 1975. He studied Wood Science, Technology and Economics at the University of Hamburg, passing the diploma examination in 2004. In 2000, the author participated in a project with the German Technical Cooperation (GTZ) in Simbabwe and worked as a consultant for a GTZ project and for the Section World Forestry (Hamburg) in Sabah (Malaysia). Since 2005 he works as a sales manager for an international home furnishing company in Toronto (Canada). Reinhold Glauner is Senior Scientist at the Institute for World Forestry and at the Federal Research Centre for Forestry and Forest Products in Hamburg.

Inhalt

Contents: Log production and timber industries in Malaysia and Sabah - Investigation of the Deramakot Forestry Enterprise concerning infrastructure and accounting systems - Evaluation of a cost data bank - Structuring a costing module for the Deramakot Forestry Enterprise and integration in the process-based model FORMIX3Q - Financial viability of Reduced Impact Logging (RIL), Low Impact Logging (LIL) and Conventional Logging (CL) in the project - Sensitivity analysis concerning Annual Allowable Cut (AAC), timber price and discount rate - Evaluation of the balance sheet and internal cost distribution.