Appendix

Appendix 1. Assumptions of the various options

Type of Plantation	Hevea wood -latex	Hevea wood	Sentang	Teak	Acacia	Hevea/Sentang		Hevea/Teak
Assumptions of option						*Hevea*	Sentang	*Hevea*	Teak
Initial planting density (trees/ha)	700	1100	833	833	900	400	533	400	533
Extraction (trees/ha)	-	-	-	-	-	-	-	-	-
3^rd year	-	-	-	-	300 (3^th yr)	-	-	-	-
5^th year	-	330	250	250	200 (5^th yr)	-	164	-	164
10^th year	-	130	250	250	190 (8^th yr)	-	106	-	106
15^th year	570	460	300	300	180 (15^th yr)	-	-	-	-
20^th year	-	-	-	-	-	340	195	340	195
Average latex yield (kg/ha/yr)	-	-	-	-	-	-	-	-	-
2000 ha	2200	-	-	-	-	-	-	-	-
40 ha	1780	-	-	-	-	1370	-	1370	-
Log volume (m3/tree)	-	-	-	-	-	-	-	-	-
5^th year	-	-	-	-	-	-	-	-	-
10^th year	-	0.3	0.3	0.3	0.2 (8^th yr)	-	0.3	-	0.3
15^th year	0.4	0.7	0.6	0.5	0.5 (15^th yr)	-	-	-	-
20^th year	-	-	-	-	-	0.5	1	0.5	0.7
Chiplog volume (m3/tree)	-	-	-	-	-	-	-	-	-
5^th year	-	0.04	0.03	0.03	0.05 (5^th yr)	-	-	-	-
10^th year	-	0.2	0.1	0.1	0.1 (8^th yr)	-	0.1	-	0.1
15^th year	0.3	0.3	0.3	0.2	0.3 (15^th yr)	-	0.3	-	0.2
20^th year	-	-	-	-	-	0.3	0.3	0.3	0.2
RSS 1 price (cent/kg)	300	-	-	-	-	300		300
Log price (RM/m3)	-	-	-	-	-	-	-	-	-
10^th year	-	75	150	250	90 (8^th yr)	-	150	-	250
15^th year	95	95	450	600	150 (15^th yr)	-	450	-	600
20^th year	-	-	-	-	-	115	450	115	600
Chiplog price (RM/m3)	-	-	-	-	-	-	-	-	-
5^th year	-	25	25	25	25 (5^th yr)	-	-	-	-
10^th year	-	30	30	30	30 (8^th yr)	-	30	-	30
15^th year	40	40	40	40	40 (15^th yr)	-	40	-	40
20^th year	-	-	-	-	-	45	45	45	45
Establishment cost (RM/ha)	3568	3850	3007	4381	2357	7846	-	8725	-
Maintenance cost (RM/ha)	-	-	-	-	-	-	-	-	-
15 yr cycle	5254	2205	3597	3597	4314	-	-	-	-
20 yr cycle	-	-	-	-	-	4804		4804	-
Thinning cost (RM/ha)	-	250	250	250	400 (1^st & 2^nd)	-	-	-	-
Harvesting cost (RM/m3)	-	-	-	-	-	-	-	-	-
10^th year	-	18	18	18	19 (8^th yr)	18	-	18	-
15^th year	20	20	20	20	21 (15^th yr)	20	-	20	-
20^th year	-	-	-	-	-	22	-	22	-

Appendix 2. Investment returns of various options

RETURN OF INVESTMENT	HEVEA WOOD-LATEX (15-year cycle)	HEVEA WOOD (15-year cycle)	SENTANG (15-year cycle)	TEAK (15-year cycle)	ACACIA (15-year cycle)	MIXED PLANTATION*
RETURN OF INVESTMENT	HEVEA WOOD-LATEX (15-year cycle)	HEVEA WOOD (15-year cycle)	SENTANG (15-year cycle)	TEAK (15-year cycle)	ACACIA (15-year cycle)	Hevea-Sentang (20-year cycle)	Hevea-Teak (20-year cycle)
1. 2000-HA ESTATE
Total revenue (RM million)	135.6	80.3	184.5	217.5	39.8	-	-
Total cost (RM million)	75.5	42.6	40.3	40.8	22.4	-	-
Net revenue (RM million)	60.1	37.7	144.2	176.7	17.4	-	-
NPV @ 10% (RM million)	7.1	1.4	17.9	23.8	5.1	-	-
IRR (%)	15	11.1	16.4	17.3	14.5	-	-
B/C ratio	1.3	>1	>1	>1	1.38	-	-
a. Return On Investment/ha
FOR 2000-HA
Total revenue (RM)	67800	40105	92250	108750	19900	-	-
Total cost (RM)	37700	21300	20150	20400	11178	-	-
Net revenue (RM)	30100	18850	72100	88350	8722	-	-
NPV @ 10% (RM)	3550	700	8950	11900	2550	-	-
2. 40-HA SMALLHOLDING
Total revenue (RM million)	2.4	1.6	3.7	4.4	-	6.51	6.39
Total cost (RM million)	1.4	0.95	1	1.1	-	2.24	2.22
Net revenue (RM million)	1	0.65	2.7	3.3	-	4.27	4.18
NPV @ 10% (RM million)	0.09	-0.002	0.32	0.46	-	0.45	0.44
IRR (%)	12.8	7.3	15.1	16.2	-	16.1	15.8
B/C ratio	1.2	<1	>1	>1		1.54	1.5
a. Return On Investment/ha
FOR 40-HA
Total revenue (RM)	59400	40000	92250	108000	-	162800	159800
Total cost (RM)	35000	23750	25000	25500	-	56100	55400
Net revenue (RM)	24400	16250	67250	82500	-	106700	104400
NPV @ 10% (RM)	2250	-50	8000	11500	-	11250	11000

For mixed plantation the option of 2,000-ha is not recommended, while for a acacia the option of 40-ha and below is not recommended.

Appendix 3. Sensitivity analyses for mono-culture plantations: Wood extraction only

a) Teak plantation (2,000 ha, 15-year rotation)

IRR %

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	20.76	19.60	18.56	17.63	16.78
+10	20.17	19.00	17.69	17.02	16.16
0	19.53	18.35	17.30	16.36	15.50
-10	18.84	17.65	16.59	15.64	14.77
-20	18.08	16.88	15.82	14.85	13.97

b) Sentang plantation (2,000 ha, 15-year rotation)

IRR%

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	20.01	18.86	17.83	16.90	16.06
+10	19.35	18.19	17.16	16.23	15.38
0	18.64	17.48	16.44	15.50	14.64
-10	17.86	16.69	15.64	14.69	13.82
-20	17.70	15.81	14.76	13.80	12.92

c) Hevea plantation (2,000 ha, 15-year rotation)

IRR%

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	15.8	14.4	13.2	12.1	11.1
+10	14.8	13.5	12.2	11.1	10.0
0	13.7	12.4	11.1	9.9	8.9
-10	12.5	11.1	9.8	8.6	7.5
-20	11.1	9.7	8.3	7.1	5.8

d) Acacia plantation (2,000 ha, 15-year rotation)

IRR%

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	19.95	18.36	16.95	15.67	14.49
+10	18.78	17.19	15.78	14.49	13.31
0	17.50	15.91	14.49	13.20	12.00
-10	16.08	14.49	13.06	11.75	10.53
-20	14.49	12.89	11.44	10.10	8.86

Appendix 4. Sensitivity analysis for mono-culture plantation: Hevea wood-latex extraction (2,000 ha, 15-year rotation)

IRR%

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	23.7	21.7	19.8	18.1	15.0
+10	22.2	20.2	18.3	15.0	14.7
0	20.6	18.4	15.0	14.5	12.7
-10	18.7	15.0	14.3	12.3	10.2
-20	15.0	14.1	11.8	9.5	7.1

Appendix 5. Sensitivity analysis for mixed plantation: Hevea-sentang (40 ha, 20-year rotation)

IRR%

REVENUE	EXPENDITURE (Change in %)
(Change in %)	-20	-10	0	+10	+20
+20	22.1	20.3	18.8	17.4	16.1
+10	20.8	19.0	17.5	16.1	14.9
0	19.4	17.6	16.1	14.8	13.5
-10	17.8	16.1	14.6	13.3	12.0
-20	16.1	14.5	13.0	11.6	10.4