Economic viability of eucalyptus production in the furniture manufacturing hub of Marco - Ceará

Fuad Pereira Nogueira Filho, Miklos Maximiliano Bajay, John Alencar de Sousa, José Dionis Matos Araújo and Diva Correia

Revista IPecege, 2017, vol. 3, issue 4

Abstract: The economic viability of forestry projects is strongly affected by the time horizon, production costs, timber price, site productivity, and discount rate. This study analyzed the economic viability of eucalyptus timber production for the furniture manufacturing hub of Marco-Ceará, under two scenarios: with and without financing. For the project analysis, the AEC 1528 clone was used, considering a productivity of 146.6, 376.4, and 316.1 m³ ha⁻¹ at 7 , 14, and 21 years, respectively, simulated using the SISEucalipto software. The timber, cut and stacked on the property, was destined for the furniture and ceramics industries in the region, according to the timber assortment by diameter class. From the cash flow, which covered the activities from planting to harvesting, profitability and risk indicators were obtained. A sensitivity analysis was also conducted, evaluating the behavior of the net present value as a function of variations in the initial investment, interest rate, harvesting cost, and timber prices. Economic indicators in the scenario without financing indicated that the project should be accepted, possessing good profitability. When financing was incorporated into the project, using the ABC Florestas program credit line, an increase in its indicators was observed when compared to the scenario without financing. Eucalyptus production in the furniture manufacturing hub of Marco-CE proved economically viable in both scenarios evaluated. The sensitivity analysis demonstrated that the project has a low risk, despite the long time horizon.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2017
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