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Forest Valuation
Evergreens forests were independently valued at 30 June 2001 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 |
179.2
|
203.4
|
229.5
|
| Nine per cent |
157.4
|
178.0
|
200.3
|
| Ten per cent |
139.0
|
156.6
|
175.7
|
| *Over the ten-yearperiod 2006 to 2016. |
LOG PRICES ADOPTED IN THE 2001 VALUATION
In $NZ per m3 at wharf gate/at mill gate |
| |
2002
|
2003
|
2004
|
2005
|
2006+
|
| Pruned P1 Sawlog |
174.00
|
174.00
|
174.00
|
174.00
|
174.00
|
Pruned Small Pruned
& High Quality Structural |
136.00
|
136.00
|
136.00
|
136.00
|
136.00
|
| Export A Grade Longs |
114.00
|
113.00
|
115.00
|
115.00
|
114.00
|
| Export A Grade Shorts |
92.00
|
92.00
|
94.00
|
94.00
|
93.00
|
| Export K Grade Longs |
72.00
|
74.00
|
76.00
|
79.00
|
81.00
|
| Export K Grade Shorts |
50.00
|
53.00
|
55.00
|
58.00
|
60.00
|
| Domestic S1/S2 |
94.00
|
92.00
|
94.00
|
95.00
|
97.00
|
| Domestic Packaging |
73.00
|
72.00
|
71.00
|
71.00
|
71.00
|
| Domestic Pulpwood |
50.00
|
50.00
|
50.00
|
50.00
|
50.00
|
| Note: Prices from 2007 onwardsare the same as those shown for 2006. |
| PROJECTED AVAILABLE HARVEST VOLUMES IN ,000M3 |
| Period |
Pruned
Logs
|
Sawlogs
|
Pulp
Logs
|
Total
|
| 2002-2006 |
314
|
916
|
402
|
1,632
|
| 2007-2011 |
239
|
1,111
|
447
|
1,797
|
| 2012-2016 |
247
|
978
|
418
|
1,643
|
| 2017-2021 |
370
|
1,480
|
491
|
2,341
|
| 2022-2026 |
909
|
3,163
|
870
|
4,942
|
| 2027-2030 |
220
|
380
|
99
|
699
|
| Total |
2,299
|
8,028
|
2,727
|
13,054
|
| VALUE DISTRIBUTION BYAGE CLASS $NZ MILLIONS USING 9% DISCOUNT RATE |
| Age |
Area in
Hectares
|
Value
|
%
|
| 0 to 4 years |
2,884
|
$1.8
|
1%
|
| 5 to 9 years |
6,958
|
$26.2
|
16%
|
| 10 to 14 years |
2,672
|
$20.1
|
13%
|
| 15 to 19 years |
2,890
|
$28.1
|
18%
|
| 20 to 24 years |
3,110
|
$37.0
|
24%
|
| 25 years and over |
2,686
|
$44.2
|
28%
|
| Total |
21,200
|
$157.4
|
100%
|
The tables on this page are sourced from the Jaakko Pöyry Consulting forest valuationas at 30 June 2001.
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