timber production, prices and end-use in a forest business ...€¦ · examined 1) timber...

Timber Production, Prices and End-use in a Forest Business in Central Hokkaido, Japan

Toshiaki OWARI and Koji OKAMURAThe University of Tokyo, Japan

Background

Sustainable forest management refers to “stewardship in a way thatmaintains biodiversity, productivity, regeneration capacity, vitality,etc. to fulfill relevant ecological, economic and social functions”

A firm economic basis is necessary for the implementation ofsustainable forest management

A landowner can improve its economy by … … reducing production/management cost (cost less) … increasing timber production (produce more) … marketing products at a higher price (add value)

2010/08/18IUFRO Japan (Owari, T.) 2

Purpose

It is important for landowners to create and implement valueaddition strategies

While wood is often regarded as “commodity” attributed with a lowprice, some tree species and assortments are extremely valuable inthe specific markets

To explore value addition possibilities in the marketplace, this paperexamined 1) timber production, 2) timber sales & prices, and 3) theend-use in a forest business in Hokkaido, Japan

A case analysis was conducted at the University of Tokyo HokkaidoForest


2010/08/18IUFRO Japan (Owari, T.)

The Univ. of Tokyo Hokkaido Forest

Located in Furano city, Hokkaido 43°10´- 20´ N, 142°20´- 40´ E

22,733 ha of forestland

Established in 1899

Natural mixed forest with coniferous and broad-leaved species Conifer: fir, spruce Broad-leaved: linden, maple, birch, oak, etc.

The mean growing stock is 210 m3/ha

4

Timber Production


Tree Cutting 2007 - 2009


15,411

9,52312,709

4,129

5,909

7,070

7,377

5,495

1,641

0

5,000

10,000

15,000

20,000

25,000

30,000

2007 2008 2009

Cutt

ing

volu

me

(m3 )

Plantation forest (conifer)

Natural forest (broad-leaved)

Natural forest (conifer)

Cutting volume 21,000 – 27,000 m3/year

% by forest type Natural forest: 73 - 92% Planted forest: 8 - 27%

% by tree species Conifer: 67 - 85% Broad-leaved: 15 - 33%

% by sales Stumpage: 78 - 86% Log: 12 - 22%

23,226

16,24617,828

3,305

4,6813,592

0

5,000

10,000

15,000

20,000

25,000

30,000

2007 2008 2009

Cutt

ing

volu

me

(m3 )

Others

Log sales

Stumpage sales

Log Production 2007-2009 Production volume

2,500 - 3,500 m3

Yield rate (Tree > Log) 74 - 77%

% by species Softwood: 52 - 62% Hardwood: 38 - 48%

% by sales Landing: 96 - 99% Auction: 1 - 4%


1,5321,841

1,479

885

1,663

1,197

39

41

104

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2007 2008 2009

Log

prod

ucti

on (m

3 )

Hardwood (auction)Hardwood (landing)Softwood (landing)

Timber Sales & Prices


Timber Sales 2007 - 2009


Sales value (tax excl.) 110 - 123 mil. JPY 1.3 – 1.4 mil. USD

(1 USD = 85.4 JPY)

% by tree species Conifer: 38 - 58% Broad-leaved: 42 - 62%

% by sales Stumpage: 46 - 52% Log (landing): 29 - 46% Log (auction): 8 - 22%

6455

47

46 65 76

0

20

40

60

80

100

120

140

2007 2008 2009

Sale

s (m

il. JP

Y)

Broad-leaved

Conifer

57 55 60

4156

36

12

1027

0

20

40

60

80

100

120

140

2007 2008 2009

Sale

s (m

il. JP

Y)

Others

Log (auction)

Log (landing)

Stumpage

High-value Timber Production


Production & Sales 2009

Product Volume* (m3)(%)

Sales (JPY)(%)

JPY/m3

USD/m3Odds ratio

(stumpage=1)

Stumpage 17,828(86.5)

59,992,812(48.9)

3,36539 1

Pulpwood(softwood)

646(3.1)

2,749,049(2.2)

4,25550 1.3

Pulpwood(hardwood)

541(2.6)

3,691,848(3.0)

6,82480 2

Sawlog(softwood)

833(4.0)

12,493,334(10.2)

14,998176 4

Sawlog(hardwood)

656(3.2)

17,201,477(14.0)

26,222307 8

Log (auction) 104(0.5)

26,656,738(21.7)

257,1133,011 76


* Stumpage: volume of standing trees; log: volume of logs

Sales by Auction 2009

Tree species Volume (m3)

Average price(JPY/ m3)(USD/m3)

Highest price(JPY/ m3)(USD/m3)

Total sales (JPY)(USD)

Monarch birch 43.943 402,3284,711

1,490,00017,400

17,679,485207,020

Castor aralia 28.971 233,6582,736

520,1006,100

6,769,29379,266

Mountain birch 15.880 73,351859

190,0002,200

1,164,81713,640

Japanese oak 14.883 70,090821

138,9001,600

1,043,14312,214

Total 103.677 (257,113)(3,011)

26,656,738312,140


End-use


Summary 2009


Product Production(% m3)

Price(USD/m3)

Sales(% JPY) End-use Unit of end-

product

Stumpage 86 30-40 49 (mixed)

Pulpwood 6 50-80 5 PaperBiomass Fiber (ton)

Sawlog 7 180-300 24 ConstructionFurniture Solid (m3)

Fancy log 1 1,600-17,400 22 Decoration Veneer (m2)

Discussion Why can log buyers afford to pay a very high price?

High product yield (fancy veneer) Manufacturing innovation (0.4 - 0.6 mm > 0.1 - 0.2 mm thick)

Why are end-users willing to buy/use fancy veneer? Aesthetics, scarcity, and low unit cost


1 m31 m2

0.2 mm x 5,000 sheets

1 m3 x 0.3 (yield rate) x 5,000 m2/m3 x 7 USD/m2 = 10,500 USD

1 m3 x 0.3 (yield rate) x 5,000 m2/m3 x 21 USD/m2 = 31,500 USD

(0.5 mm x 2,000 sheets)

Conclusions

A very high log price can be realized in the markets where end-products are traded in units of “m2”

To explore value-addition opportunities, landowners shouldcollaborate with wood product industries … … to build and manage the brand equity … to develop new products using other tree species … to expand the markets to other countries


Thank you!

We wish to thank current and former staffs at the University of Tokyo Hokkaido

Forest for their continuous and great efforts in forest management

(Corresponding address: [email protected])


mailto:[email protected]�

timber production, prices and end-use in a forest business ...€¦ · examined 1) timber...

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