We support investors and managers the investment cycle, advising on forest management, benchmarking and improvement studies, and inventory modelling and analysis.
In its specialised form, forest estate modeling is a top-down approach to analysing and developing management strategies for forest resources. This type of modeling is also a useful tool to address uncertainty, risk, and other challenges endemic to forestry.
An irregular wood flow, for instance, can create logistical challenges at every level, from harvesting and delivery to marketing and financial management. Yet most planted forest estates have irregular age-class distributions – and for these entities, establishing systems and processes to manage irregular wood flows and identify ways to make them more regular can become a financial imperative.
Even simple wood flow model can incorporate large data sets. When extended to include hundreds or thousands of similar age-class/yield table combinations, the computational demands become significant.
Spreadsheet-based models are no longer a viable option and have been replaced by specialised software in our analyses. Most purpose-built programs now employ a linear programming formulation, which enables us to perform regressions on large datasets under credible constraints and produce optimised solutions for forest industry managers.
Indufor innovates and incorporates additional functionality in its forest estate models. These additions generally include:
- Spatial representation of the forest resource
- Log type assortments into which the total recoverable yield can be allocated
- Augmented model parameters extending beyond physical yields and including:
– financial factors such as unit revenues, production costs and growing costs;
– environmental and economic parameters such as those involving carbon sequestration, water flow and social impact - Identified market access and sale points for various product types with offered prices
- A representation of the transport network, and the costs of delivery from different parts of the estate to the various market access points
- Description of market characteristics including supply and demand, and the price elasticity of demand for specified products
- Incorporation of logistical constraints such as transport routes, harvest system capacities, and nursery supply.
Indufor’s work demonstrates forest estate modelling’s prime importance in forest management, and staff members involved with valuation and forest resource consulting are proficient with the necessary modelling software.
Examples of forest estate model applications include:
- All valuations produced by the Australian offices employ a forest estate model as the underpinning framework;
- Forest estate models are a preferred approach when conducting asset due diligence reviews
- Extensively used for regional wood flow modelling and mill supply planning, among other logistical applications.
Area Experts
David Paul, Head of Forest Resources Consulting with Indufor Asia Pacific (Australia), holds a Bachelor of Forestry Science (Hons) degree from Canterbury University in New Zealand.
David is a technical forestry specialist having completed a number of significant resource reviews and feasibility studies for a range of industrial plantation owners. David has extensive valuation and due diligence experience - leading assignments in Australia, New Zealand and the broader Pacific region.
David has also worked in a range of advisory roles involving company restructuring, mergers and acquisitions from a buyer and seller perspective, supply chain assessments, hardwood and softwood market reviews as well as negotiation and analysis of long-term log supply contracts.
Bill Liley, Managing Director of Indufor Asia Pacific, holds a Bachelor of Forestry Science (Hons) degree from Canterbury University, New Zealand (1976).
Bill Liley’s expertise includes the assessment of forest quantity and condition and the projection of its wood supply capability and cash flows. These provide the primary elements of forest value estimation, which extends to include treatments of land cost, risk and cost of capital. He has undertaken projects in forest estate modeling and valuation in Oceania, Africa, South and Central America and China. He remains involved in the development of standards for forest valuation and is the Head of Forest Valuation for Indufor.
Janne Löytömäki, Senior Consultant - Wood Products, holds a master’s degree in wood technology (M.S. Tech.) from the Helsinki University of Technology (1992).
Mr Löytömäki is specialized in wood technology, sawmilling and wood-based panels industry, operational, financial and economic analyses, and valuations. His tasks in investment and other industrial studies have included process planning, financial analyses, operational and technological assessments, implementation planning; development of cost accounting, monitoring and reporting systems; carrying out forest asset appraisals, and participating in due diligence teams.
Löytömäki is fluent in Finnish and English.
Nigel Chandler, Head of Forest Resources Consulting, holds a Postgraduate Diploma in Finance (Massey University, New Zealand) and a Bachelor of Forestry Science degree from Canterbury University, New Zealand (1992).
Nigel Chandler’s expertise includes resource inventory and management, supply chain modeling and forest modeling, with the latter providing input to both tactical and strategic planning processes. Nigel has substantial experience in forest valuation, due diligence and resource assessments. He has been involved in projects in Oceania, Southeast Asia, South America and China, covering assessments and modeling of fast-growing plantation species and natural forests.