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FOREST VALUATION
Evergreen’s forests were independently valued at 30 June 2000 by Jaakko Pöyry Consulting (Asia-Pacific) Limited. The net present value, or "expectation value", approach was used, whereby projected future net cash flows were discounted to provide a current market value of the collective forest and land resource. An estimate of the land value was then subtracted to provide a value of the tree crop. The following process was adopted in the valuation methodology:
- A stand-based approach was employed whereby stands are scheduled to be harvested at or near their optimum economic rotation age.
- The cash flows are those arising from the current rotation of trees only. No account was taken
of revenues or costs from re-establishment following harvest, or of land not yet planted.
- The cash flows do not take into account income taxation.
- No allowance for inflation was provided. Future revenues and costs were expressed in current dollar values.
EFFECT OF REAL PRICE INCREASE AND DISCOUNT RATE ASSUMPTIONS
| FOREST CROP VALUATIONS ASSUMING THREE ANNUAL REAL PRICE INCREASE SCENARIOS: IN $NZ MILLIONS |
| DISCOUNT RATE |
NIL% PER ANNUM REAL PRICE INCREASE*
|
ONE % PER ANNUM REAL PRICE INCREASE*
|
TWO % PER ANNUM REAL PRICE INCREASE*
|
|
Eight per cent
|
170.2
|
193.7
|
219.2
|
|
Nine per cent
|
148.6
|
168.6
|
190.3
|
|
Ten per cent
|
130.4
|
147.5
|
166.0
|
*per annum, over the ten-year period 2005 to 2015.
LOG PRICES ADOPTED IN THE 2000 VALUATION
| IN $NZ PER M3 AT WHARF GATE / AT MILL GATE |
| |
2001
|
2002
|
2003
|
2004
|
2005+
|
|
Pruned – P1 Sawlog
|
166.00
|
168.00
|
161.00
|
164.00
|
172.00
|
|
Pruned – Small Pruned & High Quality Structural
|
114.00
|
117.00
|
114.00
|
119.00
|
126.00
|
|
Export – A Grade Longs
|
103.00
|
109.00
|
107.00
|
110.00
|
112.00
|
|
Export – A Grade Shorts
|
85.00
|
91.00
|
90.00
|
93.00
|
95.00
|
|
Export – K Grade Longs
|
81.00
|
82.00
|
82.00
|
81.00
|
81.00
|
|
Export – K Grade Shorts
|
63.00
|
65.00
|
65.00
|
65.00
|
65.00
|
|
Domestic – S1/S2 Structural
|
110.00
|
104.00
|
101.00
|
102.00
|
103.00
|
|
Domestic – Packaging
|
73.00
|
68.00
|
67.00
|
69.00
|
70.00
|
|
Domestic – Pulpwood
|
50.00
|
50.00
|
50.00
|
50.00
|
50.00
|
Note: Prices from 2006 onwards are the same as those shown for 2005.
| PROJECTED AVAILABLE HARVEST VOLUMES IN 000M3 |
| PERIOD |
PRUNED LOGS |
SAWLOGS |
PULP LOGS |
TOTAL |
|
2001-2005
|
309.7
|
797.1
|
389.1
|
1,495.9
|
|
2006-2010
|
191.0
|
1,038.9
|
458.0
|
1,687.9
|
|
2011-2015
|
225.0
|
948.9
|
400.0
|
1,573.9
|
|
2016-2020
|
367.4
|
1,392.9
|
463.2
|
2,223.5
|
|
2021-2025
|
901.8
|
2,875.8
|
915.7
|
4,693.3
|
|
2026-2029
|
321.7
|
582.2
|
139.8
|
1,043.7
|
|
Total
|
2,316.6
|
7,635.8
|
2,765.8
|
12,718.2
|
| VALUE DISTRIBUTION BY AGE CLASS $NZ MILLIONS USING 9% DISCOUNT RATE |
| AGE |
AREA IN HECTARES |
VALUE |
% |
|
0 to 4 years
|
5,049
|
7.5
|
5.0
|
|
5 to 9 years
|
4,905
|
18.7
|
12.6
|
|
10 to 14 years
|
2,899
|
20.7
|
13.9
|
|
15 to 19 years
|
2,536
|
22.3
|
15.0
|
|
20 to 24 years
|
3,328
|
38.9
|
26.2
|
|
25 years and over
|
2,289
|
40.5
|
27.3
|
|
Total
|
21,006
|
148.6
|
100.0
|
The tables on this page are sourced from Jaakko Pöyry Consulting forest valuation as at 30 June 2000.
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