Articles containing the keyword 'investment'

Planners of the Soviet pulp and paper industry are constantly faced with the problem: which investment policy guarantees the best location structure? Should one invest in existing localities or expand to new areas, especially in heavily forested parts of Siberia? A location theory for the pulp and paper industry, based on three factors (markets, wood raw materials, relative costs) has been suggested by the Soviet authors Antonov and Trusova. In the present study the theory is – for the first time – given empirical contents and the feasible areas for future growth of the industry are tentatively determined. One of the main findings of the study is the detecting of considerable unutilized wood reserves in the European USSR. This supports those Soviet views advocating a European-oriented location in investment strategy for the industry, as market and cost factors are unfavourable to Siberian location.

The PDF includes a summary in Finnish.

• Eronen, E-mail: je@mm.unknown

The paper discusses certain aspects of the capital management of forest assets. These aspects are of importance when one wants to consider what means to use to influence the capital management on both small and big forest properties. When quantifying the effects of different uses of capital, one must necessarily have a scale. The rate of return is for this purpose the usual measure of profitability. We will first discuss the differences between nominal and real rate of return, and point out the assumptions which are often implicit in analyses of the profitability of investments in forestry. We will the discuss certain liquidity and risk aspects of capital investments in forestry, and at the end deal with certain consequences of taxation.

• Eid, E-mail: je@mm.unknown

This investigation studies the significance of forest income to the economy of a farm in Finland. It concentrates on the relationship between monetary income from forestry and the capital of the farm, especially from the viewpoint of investments made in the agriculture. The material is based on results of the accounting holdings of the National Board of Agriculture between the financial years 1925-1926 and 1936-1937.

The study shows that there is a high correlation between farm’s monetary investments and changes of deposits, and changes in the monetary income of forestry. The changes in depts seem not to be as closely related to forest income as could be expected. The most important role of forestry income in farm economy is financing the investments, i.e. operations that aim at developing and rationalizing farming and making it more profitable. In many parts of the country, the investments would have remained low without income from forestry. Income from cuttings provides usually a relatively large sum on a single occasion, which is easier to use to finance a large investment compared to a smaller regular income. The needs of agriculture may, however, lead to overcutting of the forests.

The PDF includes a summary in German.

• Piha, E-mail: ap@mm.unknown

The article introduces methods that can be used to calculate economic profitability of draining of peatlands, and discusses their advantages and weaknesses. The time span from draining of a peatland and the future income is usually decades, which makes it difficult to assess profitability for the investment. For instance, income from future fellings depends on chosen rotation time, and price of timber that can fluctuate strongly.

When calculating the profitability, the drained area can be treated as a separate unit of account or as a part of the forest holding. In the first case, several methods can be used. First, yield in terms of value is a suitable method only if the peatland has no existing forest. Second, annual yield of a drained peatland and peatland in natural state can be compared. In this case yield can be defined in several ways. Third method uses value increment of the growing stock. Fourth method estimates value of increment for both the growing stock and land. Fifth method is based on present value of the future felling income, and sixth on actual value of the growing stock and yield in terms of value.

The PDF includes a summary in German.

• Saari, E-mail: es@mm.unknown

The aim of the study was to determine how the spacing of drains affects the economic results of forest drainage projects. On the basis of empirical material consisting of 411 sample plots, it is presented marginal cost curves showing how many meters more of drains it is needed to increase the value of stock, 35 years after the drainage, by a value equivalent of one cu.m of coniferous pulpwood. Results indicate that wider spacings ought to be used on poor sites, on sloping swamps, and in the north.

The PDF includes a summary in English.

• Keltikangas, E-mail: mk@mm.unknown

The role of the time factor is discussed from the viewpoint that investment calculations are expected to be used to transform and condense information and not necessarily to show the optimum. Some general conclusions are drawn concerning the recommendable form of such a calculation when used by a consultant advising a forest owner. A few of the practical problems arising in the connection of applications to timber growing are also discussed.

In conclusion, a recommendation was developed for the calculation procedure to be used in the so-called contractual research into the profitability sequence of forest improvements. It would seem advisable to carry out the calculations using both varying interest rates and varying time horizons. In addition, it is justifiable also to present the expected series of cash flow changes, such as they are, among the results. Further studies will follow.

The PDF includes a summary in Finnish.

• Keltikangas, E-mail: mk@mm.unknown

• Uotila, Finnish Forest Research Institute, Suonenjoki, Finland E-mail: karri.uotila@metla.fi
• Rantala, Finnish Forest Research Institute, Suonenjoki, Finland E-mail: jr@nn.fi
• Saksa, Finnish Forest Research Institute, Suonenjoki, Finland E-mail: ts@nn.fi
• Harstela, Finnish Forest Research Institute, Suonenjoki, Finland E-mail: ph@nn.fi