Metla Project 3337

Competitiveness of forestry and the woodworking industries

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Duration: 2002-2006   Keywords: Enterprise planning , accounting, decision support system (DSS), non-industrial private forestry (NIPF), profitability, property valuation, quality, return, risk
Research project group: Distinct projects - Forest-based enterprise and business activities

Objectives

The objective is to analyse factors affecting the competitiveness of forestry and the woodworking industries such as prerequisites for successful entrepreneurship, economic planning and control, quality and environmental management, forests and forest industries as investment objects, investment and financing strategies, as well as the economy of forest regeneration and the economic performance of forest stand. The profitableness of ownership and management frameworks in forestry. The organisational and institutional alternatives of enterprises and the economies of scale in production will be studied.

The project consists of subprojects:
  1. Entrepreneurship of forestry and the woodworking industries,
    The annual evaluation of forest property as well as the analyses of the closing of books and ratios can remarkably sharpen enabled by the IT technology and the profitability bookeeping system of MTT Economic Research. The research is based by the forest management plans and bookeeeping material obtained from the farms. The accounting of forestry will be developed to correspond the information needs of profitability and management of farm forestry. The requirements of the international IAS/IFRS standards will be taken into consideration. The evaluation of forest will be developed applying property valuation methods of economics. Advantages and disadvantages of forest ownership and organisational frameworks will be analysed. Institutional prerequisities and their changes will be studied as well as the economies of scale in forestry.

  2. The quality and environmental management of forestry,
    The development of quality as a consequence of certification will be clarified. Quality and environmental reporting will be developed. Implementation, differences and eco-efficiency of various quality and environmental systems will be compared. The impact of quality systems and environmental strategies on the efficiency of a forest enterprise will be studied.

  3. Forest and forest industry as institutional investments,
    Forest property and forest industry as investment objects will be analysed both from forest owner's and institutional investor's point of view related to state subsidies, taxation, financing instruments and other investment classes of the market place. Value chain of forest sector will be studied.

  4. Investment and financing strategies of a forest enterprise, as well as
    Investment and financing recommendations will be developed for the decision making of forest owners and investors with the help of optimal investment and financing portfolio approach.

  5. Economic planning and control of large scale forestry,
    Forest management planning will be developed together with large-scale forest holdings into the direction of enterprise planning and implemented systems serving the management of a forest enterprise for the whole field of NIPF.

  6. The intensity of timber growing and the economic contribution of a stand.
    Pursuit of maximal wood production, cost effectiveness of silviculture or cost minimisation in short term can affect on forest owner's decisions. Impact of alternative decisions on incomes from a stand during the whole rotation will be studied. The results help forest owners as well as professionals working in consultative and control tasks in forestry to apply economic argumantation even when the objectives vary.


Together with large-scale forest holdings forest management planning will be developed into the direction of enterprise planning and implemented systems serving the management of a forestry enterprise for the whole field of NIPF. Advantages and disadvantages of ownership and organisational frameworks will be analysed. Organisational and institutional alternatives of NIPF and their changes will be studied. The relationship between forest holding size and economic result will be analysed.

The development of quality as a consequence of certifying will be clarified. Quality and environmental reporting will be developed. Implementation, differences and eco-efficiency of various quality and environmental systems will be compared. The impact of quality systems and environmental strategies on the efficiency of an enterprise will be studied.

Forest property and forest industry as investment objects will be analysed both from forest owner's and institutional investor's point of view related to state subsidies, taxation, financing instruments and other investment classes of the market place. For the decision making of forest owners and investors investment and financing recommendations will be developed with the help of optimal investment and financing portfolios.

Regeneration studies, based on wood growth and yield research, analyse economically justified forest regeneration chains. The results help forest owners as well as professionals acting in advisory and control duties to apply economic arguments in regeneration even when the objectives of forest owner and forest regeneration vary.

Domestic co-operation organisations are Helsinki School of Economics, University of Joensuu, jointly owned forests (JOFs), Forestry Development Centre Tapio and members of Tapio's Nature and quality group of forestry from the Ministry of Agriculture and Forestry, the Central Union of Agricultural Producers and Forest Owners (MTK), the Forest and Park Service, UPM-Kymmene, Stora Enso and M-real. Central co-operation partners in Metla are projects 3282 'Decision support system for stand management' and 3292 'Models, planning and decision support for multifunctional forestry'. Foreign co-operation organisations are some forest research institutes in Germany, Agricultural University of Sweden and some US forestry faculties.

The project complements and applies research, already contributed, to cover critical themes relevant to the competitiveness of forestry and the woodworking industries. Previous projects 3189 'Forest owner's business economic decision making' and especially its subproject 'Business economics of forest nature conservation' as well as the preceding project 3009 'Profitability of forestry' have produced results beneficial in this project. In addition to software products of the Metla program products such as MELA System, products developed by the Forestry Development Centre Tapio (e.g. SOLMU) , University of Joensuu (e.g. MONSU), Helsinki School of Economics (e.g. VIG) , Helsinki University of Technology (e.g. HIPRE) and some US forest faculties will be used (e.g. SARA and SNAP II).

Results

See the results

Project leader: Penttinen, Markku

Other researchers: Aarnio, Jukka, VA (2003-06), Hyytiäinen, Kari, VA (2006), Lausti, Antrei (2004), Moilanen, Juhani (2003-04), Tikakoski, Simo (2006), Uotila, Esa, VA (2002-06), Viitala, Esa-Jussi, VA (2003-04)


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Updated 12.06.2012
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