ITFMP forest concession and forest industry models

Model description: During the period 1993 to 1997, the Indonesia-UK Tropical Forest Management Programme (ITFMP) developed a number of models for the Indonesian Ministry of Forestry, with support from the UK Department for International Development (DfID). The final versions of the forest concession and forest industry models run in Lotus-123 Version 3.1, but will also run in Excel. In both of these models, the data and calculations are contained in one large spreadsheet, which can be protected so that the user can only enter data into the appropriate cells. Each model also contains some error-checking functions and comments to assist the user with data entry. These models contain data collected in Indonesia in 1996, but this could be replaced with data from another country. The models are suitable for any country with large-scale forest concessions and forest processing facilities.

The forest concession model is similar to the harvesting cost model described above, but was designed to analyse the large-scale forest concessions that are typically found in Indonesia. Thus, for example, in addition to harvesting costs, the model also includes sections where forest inventory and management costs should be input along with the costs of investment in facilities such as logging camps. The model also includes the revenue side of the forest operation (i.e. roundwood prices and income from sales). In several places (e.g. felling, production and haulage costs and forest management costs) the user can either enter costs directly (i.e. as amounts per cubic metre or per hectare) or enter raw cost data and let the model calculate the unit costs.

The model constructs cash-flows for income and expenditure over an investment period of up to 20 years. It also constructs schedules for road construction, forest management activities and the purchase of machinery. The model calculates NPV and IRR for the whole forest concession (and NPV per cubic metre), taking into account depreciation, tax and financing.

The forest industry model is similar in appearance to the forest concession model, but contains information about the income and expenditure associated with running a processing facility (e.g. sawmill or plymill). The model contains information about roundwood costs, fixed and variable manufacturing costs, product sales, capital costs and the production start-up schedule (in the case of new mills). The forest concession model was constructed after this model, so a detailed specification of roundwood costs in the forest industry model is no longer required. Rather, both of the models can be used together for analysis by using the same roundwood price in each of them.

This model also constructs cash-flows for income and expenditure over an investment period of up to 20 years. It calculates NPV and IRR for the processing facility, taking into account depreciation, tax and financing.

Download: These models have been made available here with the kind permission of DFID. The forest concession model can be downloaded as two files for Lotus-123 (519 KB: click here and here) or as a Zip file (106 KB: click here). The forest industry model can be downloaded as two files for Lotus-123 (269 KB: click here and here) or as a Zip file (56 KB: click here). Full documentation for the model and additional information about use of the model is presented in the following reports:

Scotland, N, and Whiteman, A, 1997a, The ITFMP forest concession model: operator's manual, Report No: SMAT/EC/97/05, Indonesia-UK Tropical Forest Management Project, Jakarta, Indonesia. Click here for html version. Download PDF Version (587 KB):

Scotland, N, and Whiteman, A, 1997b, The ITFMP forest industry model: operator's manual, Report No: SMAT/EC/97/1, Indonesia-UK Tropical Forest Management Project, Jakarta, Indonesia. Click here for html version. Download PDF Version (632 KB):

Whiteman, A, 1996, Economic rent and the appropriate level of forest product royalties in 1996, Report No: SMAT/EC/96/1, Indonesia-UK Tropical Forest Management Project, Jakarta, Indonesia. Click here for html version. Download PDF Version (60 KB):

last updated:  Thursday, November 30, 2006