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ANTECEDENTS OF THE CHILEAN FOREST SECTOR.

Introduction

Chile has 75.4 million hectares of continental LAND.

The forests cover 15,647,894 hectares, which represents 20.8% of the national territory. 32.5% of the territory are deserts (naked areas) and 27.2% are covered with prairies and brushes.

The current land use is detailed in the following board:

 

Table 10

Current Land Use

 

Hectares

%

Urban and industrial areas

181,420

0.2

Agriculture land

3,805,784

5.0

Prairies and brushes

20,506,615

27.2

Forests

15,647,894

20.8

Water (Rivers, lakes, etc

4,496,071

6.0

Naked areas (deserts)

24,529,190

32.5

Snow

4,641,730

6.2

Bodies with no water

1,211,579

1.6

Not recognized areas

388,753

0.5

TOTAL

75,409,035

100.0

Source: Chilean Native Vegetation Resources Inventory and Evaluation. Project of CONAF-CONAMA- BIRF. 1998

The native forest reaches to 13,443,316 hectares, which represents the 17.8% of the national surface. The most abundant forest is the adult, and represents 38.2% of the forest surface. According to this Inventory, the Forest Plantations are of 2,118,836 hectares which equal 13.5% of the forests and 2.8% of the national surface.

These figures on plantations are 282,851 hectares over the ones registered by INFOR. In this inventory, in order to get the graphic information around 47,000 air photographs and 35 satellite photographs (for the covered zones to scale 1: 250.000) were interpreted. This practically covered the entirety of the national territory, with exception of the oceanic islands and the Antarctic territory. Only 0.5% of the continental land could not be covered with this type of image. The inventory also has all the information obtained directly on the site, in three years of work, with more than 3,600 journeys in the field.

This newly information of January 1998, suggest that the realized calculations over plantations, in this report, would be relatively overvalued. However, it does not subtract value to the conclusions in relation of the evolution of the Appreciation of the Natural Capital.

The forests plantations, according to INFOR and their projections, for the year 1996 covers 1,835,985 hectares. From this total, 1,387,041 ha are of Pinus radiata (75.6%); 308,762 ha of Eucalyptus sp. (16.8%) and the remainder of Other Species (7.6%).

Development of the Chilean Forestry Sector.

The development of the Chilean forest is essentially based in the exploitation of the Pinus radiata. Original of the peninsula of Monterrey, the specie was introduced in Chile some 100 years ago, where, due to the special climatic and soil conditions, it grows to very superior rate to than in its place of origin.

This development has wakened up many interest in the informed circles of the forest industry of the world. Its bases are found in two big landmarks intimately related:

a) A model of economical development open to the international market: Opening to the worldwide market and deregulating the economy.

b) model of forest development based on plantations: For over than four decades the diverse governments have affected directly or indirectly in the forestation and reforestation of the country by means of direct incentives - payment on behalf of the cost of planting and managing - and indirect – tributary profit and other tools of economic politics - to the forests plantations.

The outputs of this forest politics, expressed essentially in the Ordinance Law 701 of 19744, of incentive to the development of the private plantations, was expressed in an extraordinary growth of the species Pinus radiata d. Don, capable of supplying the primary forest industry and generate 85% of the production value, harvesting it annually more than 18 million m3. Besides creating a net value of primary production equivalent to 2,400 million dollars, of which 63% constitute the export offer of forests products of the most diverse nature, from saw wood to furniture and products added value.

The market for the forester is transparent, in the sense that relies on an information of well-known costs, with different barriers and power of negotiation, opposite the old industry. Consequently, the variables of offer and demand reflects, given the liberty of export, the international costs for logs.

In the recent trajectory of the forest sector, one could mention that the country in the decade of the 70’s and 80’s was a wood producer, leader in the low cost production and which offered to the industry or to the external market, costs comparatively lower than those of the countries with more forest development.

This situation changes starting from the 90’s, almost duplicating the real costs for the local industry, small and medium companies with obsolescent technology didn't succeed in offering products of a good relationship price -quality to the market, since their costs of supply were too high without getting the margins in order to sustain the sawing business because of the low output that they where getting from the prime material.

The anterior is produced by the setting in progress of numerous projects of great size, especially in the area of the mechanical remake of wood, adding to this problem the effect of the boost of internal productive costs next to a strong lowering off the currency exchange rate5.

The expectations of costs for the forester improved substantially. The trajectory that the real cost followed was reflected perfectly in the cost of purchase of the countries with high forest development.

The previously commented meant a stimulus so that the forester (re forester) enters to the business of forest plantations.

However, Chile has come losing its comparative advantages, between other causes, for the mentioned overprice of its productive factors. This new situation is obligating that the previously commented model enters in a phase of strategic change in order to establish new competitive advantages and elevate the development curve through technological innovation.

On the other hand, it is an important precedent that the property of the forests and the forest lands – native or plantations - are, in their majority, of private property.

The State is proprietor of 14 million hectares that are under the SNASPE6 (13% are natural forests and the remainder are deserts, steppes, glacial and high mountain. The State also has 1.8 million hectares not belonging to the SNASPE, which are distributed in areas of protection, sanctuaries of nature, genetic reservations and places of scientific interest.

As for artificial plantations, the State now possesses some 42 thousand hectares of Pinus radiata that is administered by the National Forest Corporation (CONAF) in agreement with particulars.

Reforestation and Forestation.

Reforestation is the plantation on the harvested of a forest. The regulations demand that all harvested forest be replanted in the term of 3 years.

For their part, forestation refers to the plantation carried out in lands that didn't have forests and they were dedicated to other uses.

The surface forested and reforested with the species Pinus radiata and "other species"7 for the period 1978-1996 are shown in the following table:

Table 11

Reforestation and Forestation According to Year - 1978 - 1996 - (In Hectares)

YEAR

TOTAL (1)

PINUS RADIATA

OTHER SPECIES

(%)

(%)

1978

77,371,0

65,413,0

84.5

11,958,0

15.5

1980

72,164,0

60,086,0

83.3

12,078,0

16.7

1985

96,278,0

80,630,0

83.7

15,648,0

16.3

1990

94,130,0

61,310,0

65.1

32,820,0

34.8

1991

117,442,0

75,416,0

64.2

42,026,0

35.8

1992

130,429,0

81,868,0

62.8

48,561,0

37.2

1993

124,704,0

71,411,0

57.3

53,293,0

42.7

1994

109,885,0

63,061,0

57.4

46,824,0

42.6

1995

99,857,0

62,723,0

62.8

37,134,0

37.2

1996

78,592,7

53,444,0

68.0

25,148,8

32.0

Source: CONAF
(1): Includes forestation and reforestation, with exception of natural regeneration.

Plantations of Exotic Species

The plantation of exotic species, initiate more than six decades, have had a sustained growth through time, which has permitted that in the year 1996 registers a total of 1.8 million hectares, of the whom, 75.9% are Pinus radiata; 16.6% are Eucalyptus sp., and the remainder to other exotic species like Atriplex sp., Prosopis tamarugo, Pseudotsuga sp. and Populus sp.

Table 12

Distribution of Forestry Plantations for Specie by Region, 1996
(In Hectares)

REGION

TOTAL

Atriplex sp.

Prosopis Tamarugo

Prosopis sp.

Populus sp.

Pseudotsuga sp.

Other sp.

Eucalyptus sp.

Pinus radiata

TOTAL

1,835,985

49,316

20,632

3,248

4,055

12,477

50,454

308,762

1,387,041

Percentage

100,0%

2,7%

1,1%

0,2%

0,2%

0,7%

2,7%

16,8%

75,5%

I

24,491

5

20,624

3,207

-

-

477

178

-

II

602

-

8

14

-

-

579

1

-

III

1,723

3

-

-

-

-

890

829

1

IV

54,695

49,115

-

20

12

-

2,750

2,143

655

V

56,672

193

-

7

-

-

4,763

35,856

15,853

RM

12,659

-

-

-

-

-

1,731

9,927

1,001

VI

84,024

-

-

-

991

-

1,316

22,002

59,715

VII

347,349

-

-

-

2,227

5

2,295

16,400

326,422

VIII

761,916

-

-

-

276

365

7,342

111,228

642,705

IX

302,840

-

-

-

299

6,239

3,636

67,994

224,672

X

166,403

-

-

-

245

4,666

3,271

42,204

116,017

XI

22,561

-

-

-

5

1,202

21,354

-

-

XII

50

-

-

-

-

-

50

-

-

Source: INFOR

It comes off of the table that the two principal species, Pinus radiata and Eucalyptus sp,, represent 92.5% of the total plantations,

Plantations of Pinus Radiata

The plantations of Pinus radiata constitutes the industrial base of the Chilean forestry sector, since they offer qualities that allow to destine them to a great variety of uses. In fact, only representing 18.4% of the surface of productive forests, contribute 74.5% of the prime industrial material, in 1996 the consumption was of 22.9 million m3 s.s.c8.

The planted surface and the equivalent volume of Pinus radiata, by region, in the year 1996 is the following:

Table 13

Pinus Radiata Plantations by Region: 1996

REGION

SURFACE (ha)

VOLUME (millions m3)

TOTAL

1,387,041

198.3

IV

656

-

V

15,853

2.0

RM

1,001

0.2

VI

59,715

7.9

VII

326,422

35.0

VIII

642,705

103.4

IX

224,672

35.5

X

116,017

14.3

Source: INFOR, CONAF, COMPANIES

These plantations extend in the country, from the V to X regions, being the VIII region the one with the largest surface and volume, with a 46.6% and a 51.8% respectively.

 

Table 14

Surface and Volume of Pinus Radiata Plantations by Age Class According to the Region: 1996

REGION

TOTAL

AGE CLASS (years)

0

1-5

6-10

11-15

16-20

21-25

26-30

31 >

SURFACE (hectares)

TOTAL

1,386,385*

60,300

380,483

309,413

312,658

252,242

65,346

4,319

1,624

V

15,853

655

3,610

3,159

2,832

2,327

2,085

833

352

RM

1,001

-

12

-

124

865

-

-

-

VI

59,715

936

18,162

9,259

12,937

15,274

2,801

227

119

VII

326,422

20,043

92,363

74,187

85,340

36,979

16,703

593

214

VIII

642,705

30,300

162,685

138,856

138,191

141,161

29,778

1,385

349

IX

224,672

4,342

65,741

51,101

53,760

37,221

11,190

932

385

X

116,017

4,024

37,910

32,851

19,474

18,415

2,789

349

205

VOLUME (thousands of m3)

TOTAL

198,295

-

-

-

66,473

95,915

32,293

2,528

1,086

V

1,964

-

-

-

362

505

640

308

149

RM

216

-

-

-

16

200

-

-

-

VI

7,867

-

-

-

1,808

4,754

1,129

108

68

VII

35,026

-

-

-

14,108

12,137

8,269

359

153

VIII

103,445

-

-

-

33,048

54,916

14,422

824

235

IX

35,500

-

-

-

12,888

15,326

6,295

677

314

X

14,277

-

-

-

4,243

8,077

1,538

252

167

Source: INFOR, CONAF, COMPANIES* Partial figures at national level ( the I , II, III and IV regions are excluded).

According to the outputs of a study carried out by the INFOR in the year 1990, 40% of the plantations of Pinus radiata are subjected to intensive forestry. This supposes the production of plants from genetically improved seeds, the utilization of highly technified nurseries, the adequate soil preparation, the use of fertilizers and pesticides and the application of thinning and pruning produce wood free of knots. It, in consequence, is estimated that, in the next years, wood of good quality will be produced at better costs.

This intensive management is specially carried out by the big forest companies, with the end of getting a better quality of the wood. This permitted that Pinus radiata could be utilized in products that before were elaborated with other wood, like for example boards and pieces free of knots. The companies and diverse organizations of government like the National Forest Corporation, universities and the Forest Institute, also work in the genetic improvement in order to increase the productivity of the forests lands.

On the other hand, traditional forestry exists. This is practiced in the 38% of the plantations and is characterized by carrying out only two thinnings - at 12 and 16 years - and destine the crops toward pulp wood and saw logs.

Costs

The series of costs are expressed in real terms and in dollars.

To deflect the market values, internal and external, an Index of Prices for Majority is utilized, for Chile and the USA respectively.

Table 15

Prices for Pinus Radiata logs in the domestic and export market

(In US$/ m3)

YEAR

Export market

Domestic market

P. radiata

P. radiata

P/SAW LOG

P/PULP

P/SAW LOG

P/PULP

1986

44

36

48

37

1987

49

34

48

36

1988

54

33

60

31

1989

50

31

58

30

1990

54

36

49

28

1991

57

44

49

27

1992

52

44

50

29

1993

92

41

48

23

1994

68

49

45

20

1995

69

45

45

22

1996

66

52

44

20

1997

61

56

45

21

Source: INFOR

 

Volumetric Growth

The rapid growth and high annual production volume, have been important factors in the great quantities of the Pinus radiata plantations. However, these qualities show variations in the different zones of the country. So, the zone of Arauco presents the higher rates of annua l volumetric growth, in several classes of sites, in the other hand, the zone of Arenales (County of Biobío) shows the lower volumetric growth.

 

Table 16

Annual Volumetric Growth of Pinus Radiata

by Zone and Site Index

ZONE

SITE INDEX

SITE INDEX/1

(m)

VOLUMETRIC GROWTH (m3/ha/year)

VII – Maule

I

II

III

28

24

20

25.3

23.5

21.7

VIII – Concepción

Arauco

I

II

III

32

28

24

31.6

27.1

22.7

VIII – Arenales

I

II

III

20

16

12

18.1

14.3

10.7

Source :INFOR, 1992.

/ 1: Indicator of the fertility of the soil, measured through the dominants trees height at an specific age, in this case Pinus radiata 20 years old.

For the application of the model, according to what has been said, an average annual increment of 25 m3/ha/ year is utilized. This value is the most representative at the national level for the diverse soil and climatic zones of Chile.

Legal Property the Plantations

If the legal property of the plantations of Pinus radiata is classified according to surface, considering as big proprietors those that possess more than 1,000 ha; like medium proprietors, between 100 1,000 ha and like small proprietors, those with less of 100 ha, then, we get a concentration of these plantations under the domain of big proprietors; mostly located in the VIII Region, around the great forest industry.

This is confirmed in Table 17.

Table 17

Surface Plantations of Pinus Radiata by the Size of Proprietor

According to Region

REGION

YEAR

SIZE OF PROPRIETOR

SURFACE (Ha)

Big

Medium

Small

Without Information

Total

Surface

(ha)

Surface

(ha)

Surface

(ha)

V

1994

6,805,0

2

4,418,7

20

2,714,9

138,0

1,104,2

15,042,8

VI

1995

32,752,8

12

17,861,3

56

8,665,5

335,0

1,233,2

60,512,8

VII

1996

198,546,0

26

79,175,8

306

39,185,1

1,599,0

12,269,1

329,176,0

VIII

1990

472,754,9

30

73,742,6

306

333,097,9

936,0

15,982,1

895,577,5

IX

1991

115,754,8

15

46,932,2

180

21,729,3

956,0

2,729,3

187,145,6

X

1991

69,282,4

6

12,625,3

53

7,893,2

307,0

1,626,9

91,427,8

TOTAL

895,895,9

91

234,755,9

921

413,285,9

4,271,0

34,944,8

1,578,882,5

 

Category

Big: more than 1,000 ha

Medium: from 100 to 1,000 ha

Small: less than 100 ha

The proprietors of plantations reach to 5,283, from them, 91 proprietors concentrate 57% of the total planted surface and remainder 43% is distributed between medium and small proprietors. Should be pointed out, in this context, that the classification between big, medium and small proprietors is arbitrary and practically not comparable with the worldwide forest industry. The five principals North American companies have more than 4 million hectares each and on our bigger companies don't surpass the 500,000 ha.

The regions with less development forest industry show a more balanced distribution of the property of this resource, reflected in the proportions of plantations of Pinus radiata in hands of medium proprietors.

Harvest – Growth Balance of the Plantations

The balance of harvest - growth of the Chilean forests is positive. According to the evolution of the forestation and reforestation appraisal and to the esteemed harvest in the last decades, the country has capitalized its forest resources, especially in the forests plantations. The futures balance is expected to continue being positive, due to the growing availability of wood.

The balance of Pinus radiata is favorable, since the annual availability in volume is superior to the appraisal of annual harvest, including the industrial consumption of wood, the consumption of firewood and the losses for blazes. However, a descent of the balance between the years 1990 and 1994 was observed, product of the important increments of industrial harvesting.

A qualitative improvement is also observed through intensive management, like the application of genetic improvement techniques and of silvic treatments.

Table 18

Harvest / Growth Balance of Pinus Radiata Plantations

1996

Items

Units

Pinus radiata

Annual plantations

ha/year

63,061

Average annual growth

m3/ha/year

201/

Total surface

Ha

1,386,385

Volumetric stock

m3/ha/year

198,295,000

Annual availability

m3/year

27,727,700

Annual harvest

Ha

-35,990

m3

-17,995,100

Firewood consumption

m3

-1,449,818

Forest fires loses

Ha

-4,200

m3

-500,000

Plague loses

Ha

-7,000

m3

-948,000

Balance

Ha

15,871

m3

6,834,782

1/ INFOR considered, in this calculation, the inferior limit of the Average Annual Increments registered in Chile. It should be remember that for the calculation of the Appreciation was utilized 25 m3/ha/year to be more representative.

The Balance for 1996 is positive and indicates the sustainability of Pinus radiata exploitation.

Future Wood Availability

The future wood availability has been calculated, for INFOR, by means of the application of predictive models.


Table 19

Future Wood Availability of Standing Forest of Pinus Radiata Measured Every 3 Years and Type of Product 1996-2016

(Million m3/ year)

3 YEARS

TOTAL

Pinus radiata

Subtotal

Pulp

Saw log

1996 - 98

19.85

17.7

8.6

9.1

1999 - 01

26.45

22.2

9.3

12.9

2002 - 04

30.37

23.3

10.0

13.3

2005 - 07

31.39

22.9

9.6

13.3

2008 - 10

32.44

23.1

9.1

14.0

2011 - 13

32.88

23.1

8.8

14.3

2014 - 16

39.98

30.1

10.1

20.0

Source: INFOR

The presented outputs obey to the criterion of projection of the Maximal Readiness Not Falling, which determines the maximal volume of wood that could be extracted and whose magnitude is sustained in time. It is to say, all the wood is harvested in order to supply the current industrial park plus the well-known projects, the remainder is the net available wood in order to sustain new investments.

In the case of the Pinus radiata, a classification between pulp wood and saw log becomes necessary, which is based an the variable utilization index, according to diameters. In the pulp wood availability, the minor diameter are suppose to be utilized, it does not include possible recuperation of refuses in the sawmills.

It should be pointed out that the anterior is an arbitrary division and rather obeys to its customary use in Chile, standing out now that the innovation in the sawmill industry and they of the remanufacture allows to utilize diameters until 10 centimeters in order to produce remanufacture products of high quality.

 

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