Appendix 5. Reforestation Project of Bosque Puerto Carillo S.A. Guanacaste, Costa Rica

M.Sc. Rodolfo Quirós Herrera.

Silviculturist

BACKGROUND

Bosque Puerto Carrillo S.A. (BPC), a private company, started commercial plantation in 1983, establishing 12 hectares of pochote (Bombacopsis quinatum), a native species of high commercial value in the domestic market. In 1986 the company tried teak (Tectona grandis), planting on almost 30 ha that first year. After comparing the initial development of this species with pochote, the BPC’s technical board adopted teak as the main species of the project, and the only one for new plantations from 1987.

As land limitated the project’s expansion in Puerto Carrillo, on 1991 they started operations in Jabillos de Nandayure, on “Palo Arco”, a different site, with mainly flat or slightly hilly, convenient for mechanical means. Between 1986 and 1994 BPC’s project grew in extension, and now has five phases. Three of them, the older ones, are teak and pochote plantations established near Puerto Carrillo and Buenos Aires of Sámara, known as Puerto Carrillo’s Management Unit . The forth and fifth phases (Bosque IV and V) are homogenous teak plantations, area Palo Arco’s Management Unit, with two plantations blocks; Jabillos and Moravia.

To increase the aggregated value of the forest plantations, and profit from an integration of the forest with the industry, on 1992, some BPC’s partners formed Industrial Bosque Puerto Carrillo (IBPC),. This new entity was to process and market BPC’s productions. Between 1993 and 1994 IBPC built an industrial plant at Palo Arco, designed to produce teak parquet. The plant has sawing section, drying ovens, parquet line and a varnishing section. Today IBPC is faced with the challenge to innovate and diversify its production line, and introduce high quality teak products in competitive markets.

PHYSIOLOGICAL AND TECHNICAL BASIS

Species requirements (region’s soils, climate, topography)

The BPC plantation project is located on the Pacific North Coast of the country, in the southern part of the Nicoya’s Peninsula, in areas classified as Tropical Rain Forest (bh-T) and Premontano Rain Forest (bh-P). The bh-T (warm and rainy area), seems not to coincide with the Nicoya (Dry Pacific). Nevertheless, not all the region is dry. To the south, the annual average of rainfall increases. There is a dry season of almost five months, a rainy period with a rainfall of 2,500 and 3,000 mm/year and temperatures above 30 degree centigrade.

Teak plantation’s topography varies from almost flat lands (0 - 3%), to rolling areas (3 - 15%) and hilly areas with slopes between 30 to 60%. For teak requirements, flat ground is appropriate, if clay and/or severe drainage problems are not present. Areas with a rolling topography and good drainage conditions are suitable for teak. When it is not possible to provide an integrated silvicultural management with native species, teak should not be planted on very hilly areas due to the high erosion risk.

BPC teak plantations’ soil conditions vary from typical Vertisols soils, where teak development is poor, to deep aluvial soils with high natural fertility, very good for teak. Some rolling areas (2-25%) are classified as Alfisols of the Haplustaf group, whose principal elements are a horizon with a minimal development (hapl), under a humidity regime ustic. They remain dry for more than 90 consecutive days/year.

On the flat regions, the most common are aluvial soils from old river overflowed shores, with isolated patches of vertisoils soils having serious limitations for teak development. As they have low infiltration rates and poor drainage, in the rainy season they have anaerobic processes with roots putrefaction. During dry months, the vertisoils crack, breaking the roots that survived the bad drainage conditions. In the rolling area, with flat parts and gentile slopes, in red-brownish tonality soils of medium deep, teak’s development is satisfactory.

To determinate soil fertility, soils samples from 0 and 40 cm depth were collected. In general, soil acidity was within teak’s requirements; with average pH between 5.6 and 6.9. Deficit of phosphorus and zinc were reported.

Planted area per year

The BPC planting project has 3,851 ha, of which 82% (3,174 ha) area considered as teak planted area, and a 2.1% (82 ha) as pochote stands. The remaining 15.5% (595 ha) is destined to roads, yards, buildings or natural forest for conservation. Yearly planted area by species and project’s phase is shown in Table 1 and Table 2.

Table 1. Annual area planted (hectares) with Pochote (Bombacopsis quinatum) by phase of the BPC project

Table 2. Annual area planted with Teak (hectares) by phase of the BPC project

Rotation Age

The cut of trees happens during the pruning and in the final cut. Because teak presents growth trends with high rates on the first eight or twelve years (according to the site quality) and later it finishes, at BPC all the pruning are programmed before the year twelve. As definitive rotation age will depend on future preferences for the teak products and their prices, a preliminary turn of 25 years has been determined, based on biologic considerations.

The plantation’s density is regulated by a thinning program whose goal is larger diameters improvement and in consequence the profitable volume of the plantation. Is important concentrate the growth potential in the best trees. It means to program the pruning as soon as the more convenient features of each tree.

Teak is a forest species of rapid growth on the first years. Due to the direct relation between the size of the top of the tree and diametric increase, is necessary to apply pruning before the density level affects in a negative form on the shaping of the tree’s tops reduced and little deep. Trees with such characteristics will hardly react to late pruning. This justifies the reduction on 40% of the number of trees at the latest delay on the fourth year. At that age it is possible to determine whether a tree is promising or not.

Thinning of young stands concentrate the yield because the ones extracted are, normally, the smaller trees. With this method, the direct costs of thinning are reduced in an important way. Also investment on silvicultural activities is small. An early thinning eliminates most of the trees that will never yield a profit, and the ones of worst shape and quality. The thinning assures that the company’s financial resources company will be channelled only to trees that will pay.

On the Dry Pacific teak has very clear yearly growth rings that can be used as an exact record on the annual increase of the stand. They provide enough information to determinate the moment and intensity of each thinning. Table 3 presents the normal thinning program for a stand of medium characteristics.

Table 3. Program of thinning in stand of medium characteristics

Due to doubts about future market conditions and scant data on total and commercial growth, BPC has not yet decided the rotation, and has adopted, tentatively, 25 years.

Diameter, height and volume increase

A permanent plot network has been established to determine the annual increment in diameter, height and volume. The oldest records are from 1988 and today the plantations are four and twelve years old. Some average parameters from the permanent plots are summarised on the Table 4.

Table 4. Information from Permanent Sample Plots in BPC´s Project

n.s. = no significative.

V tot = Total standing volume using Keogh (1980) Vtot = 0.0359 + 0.000022 Dg2 * Hmed * N

V 10 = Commercial Volume (minimum diameter = 10 cm without bark)

Total and commercial volumes expected from thinning and final cut

Total and commercial volumes from a presumed average planted hectare, presented in Table 5, shows an average increment of 13.2 m³/ha/year, and with a 10 cm top end under bark it is reduced to 10.3 m³/ha/year.

Table 5. Total and commercial volume (m3/ha) from thinnings and final cut for different top log diameters for a 25 years of rotation period

ECONOMIC ASPECTS

Financing scheme

BPC project has financed its activities with resources from investors. On each phase a certain amount of ha/shares were issue, and its value covered the establishment and the development of the plantation until the final harvest. The income from the share’s sell financed each phase and the start up of the following. The system provided an homogeneous silvicultural management by selling shares, instead of specific planted plots. At first investors could take advantage of the legislation which gave the costarrican residence to foreign retirees who invested a certain amount on national projects.

Cash flow from reforestation teak projects

BPC is developing one of the first medium size commercial teak plantations. The Company’s experience might be useful for other companies who want to plant teak. Some aspects regarding the cash flow are:

• Planting teak demands long production periods. Planning must be done for at least 25 years.
• Economic-financing considerations must be applied to each activity of the process.
• When calculate teak budgets, all the productive cycle must be included. The lack of resources to implement silvicultural treatments might destroy any planned management, and its profits.
• When the cash flow does not have enough resources for a top technical management, it might be reasonable to incorporate the environmental services incentive to cover the gap.

Teak regional market

A huge variety of intermediate goods and final products can be expected from varied forest production, when teak is used as the wood species of a project, due the different applications and uses that can be done to the wood. As it is done with the traditional plantations, it is possible to classify the production, guiding the high quality and value goods to special place on the foreign market, and the ones of lesser quality and price directed to markets of few exigency or to the internal market.

Solid wood of high quality, veneer, yacht decoration, moulding, parquet and refined furniture constitutes the production lines with possibilities of exportation. In the internal market, teak wood can be used for handcraft, house and buildings construction, or designing economic furniture. In any case, all efforts go to the direct production of teak plantations, as an option to keep the sustainability of the plantation.

Log and sawn wood prices

Due to the teak’s log production in Costa Rica has been reduced to a few stands of small size, especially located in Santa Cruz, Nicoya and Paquera at the Dry Pacific; also in Quepos, Parrita and Paso Canoas on the South Pacific, local teak prices do not show its planting costs. Logs with more than 25 cm of diameter on the slimmer part, placed on yards to be sawn prices are among US$100 and US$189/m³. However, those are speculative amounts. It will be convenient to examine price trends of this wood, as plantations will consolidate their production, when the market forces to let some stability on the internal prices from a reduced boundary.

COMPANY PROJECTION FOR EXPANDING AREAS

The distribution of age types of the BPC project is characterised by a concentration of surface on a restricted range by ages. Since four years ago no new areas have been established. On a trial to organise production during the transitory shift, a deficit of logs from thinning is expected starting on 2006. If the final cut is done according to the first proposal of 25 years, the missing wood production will be projected until the year of 2014. A way to solve this deficit will be planting enough area each year during the next 8 years, annual areas between 200 and 300 ha of effective teak plantations.

In order to profit the IBPC’s infrastructure located in Palo Arco, BPC must place the expansion’s projections in a ratio around a transforming industrial plant. So the Península de Nicoya must become the ideal zone for the planting activities of BPC.