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.