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Natural Climate Solutions
Sep 30 • 7 min read

How to ensure long term forestry sustainability: New York Declaration on Forests (part 3/3)

New York Declaration on Forests (NYDF) aims to protect and restore forests across the globe. We here at Simosol are proud to be a part of this project! According to the NYDF, improving e.g. forestry practices and halting deforestation could cost-effectively remove billions metric tons of carbon dioxide from the atmosphere annually.

This description of our contribution is divided in three blog posts.The first post is an overall summary of different solutions and methods and in the second post we will tell more about how satellite images, log tracking and carbon analysis can help restore forests. This third post describes how you can ensure long term sustainability of forest management with forestry software IPTIM Assets. This software provides forest owners and forest service providers high-end technology to maintain their assets, create long term plans taking stable wood flow, felling income and stumpage into account, and make sure future fellings will not decrease carbon storage.

The NYDF established 10 Goals as presented in the following image.

Solutions to ensure long term forestry sustainability

Forestry companies face longer planning time frames when compared to organizations in almost any other business sector, from 6-year rotations in eucalyptus plantations in Brazil to 100+-year rotations in pine forests in Finland. Moreover, forestry companies do not deal with inert and slowly decaying minerals, but with biological assets (trees) whose growth depends on a great number of factors including species, terrain, altitude, soil and management.

Consequently, in order to accurately forecast the amount of wood to be harvested from any given forestry project, one needs to succeed in carrying out the following activities:

  1. gather accurate data
  2. process the data to estimate volumes
  3. generate models to estimate future growth
  4. consider the effect of management regimes, product-demand, operational restrictions, financial objectives, etc.

Simple spreadsheets have served as planning tools for many forestry companies. However, they not only provide limited capabilities for carrying out the aforementioned activities, but they can prove to be extremely inefficient and inflexible for the complex and dynamic forestry context. Here we briefly present two resulting dilemmas.

The forest owner dilemma

One of our clients manages short-rotation plantations. Before acquiring our services, they used common spreadsheets to store, manage and process their data. For each sample plot they had a worksheet, and for each stand they had a spreadsheet. As a result, they were managing hundreds of worksheets loosely connected to dozens of spreadsheets. This situation, common in the forestry sector even within large companies, leads to various challenges.

  1. Data management becomes a hassle. Not only are companies forced to open multiple spreadsheets to browse their information, but correcting a mistake buried in a cell in some worksheet in a given spreadsheet can become an almost-impossible task.
  2. Drawing on that disperse data to create models is very difficult, not only due to the complexity in copying the desired data to other spreadsheets for processing, but, more importantly, because common spreadsheets do not include sophisticated modelling capabilities.
  3. The important task of obtaining projections of all key variables (incl. standing volume, harvested volume, volume growth, density, etc.) becomes a real struggle if you need to draw your data from spreadsheets.
  4. What if you want to change a product dimension? Or what if you have reason to believe that one parameter of a growth model must change? Recalculating and comparing scenarios is a daunting task for companies not using sophisticated forestry software.

The investor dilemma

Investors looking for stable and profitable forest assets face problems as well when using simple or outdated forestry systems (not to mention simple spreadsheets). While all the reasons of the forest owner dilemma may also apply to the investor, the latter’s is focused on the need to generate multiple cash flows for considering multiple scenarios for each of the investment options at hand. Just imagine the implications of considering different product portfolios in two asset investment options. For each option, a product portfolio requires the consideration of different prices per cubic meter, and different diameters and lengths for each product. Clearly, as many companies manage multiple species, this problematic starts to grow exponentially.

Consequently, the simulation and projection of key financial variables for any scenario becomes a very heavy task for an investor who also needs to consider changes in cost per activity. And, if the task is outsourced to an external consultant who is also not using sophisticated forestry tools, the investor risks receiving inaccurate and expensive results.

IPTIM Assets: an introduction to the solution

Simosol developed IPTIM Assets – a forestry software which integrates robust and accurate data-management, modelling and planning tools. Across the world, IPTIM Assets has solved many of the most demanding challenges experienced by forestry companies, investors and consultants. As mentioned above, everything begins with data management. IPTIM Assets allows clients to manage all of their data in a single platform. Every tree connected to its respective sample plot, and every sample plot connected to its respective stand. Sample plot data is used in forestry for many purposes, of which modelling is of prime importance.

IPTIM Assets offers a wide range of in-built models which accommodate to each client’s data. Depending on the quality of data, users can generate multi-attribute models which incorporate taper curve measurements for generating accurate assortment projections. Moreover, IPTIM Asset’s modelling tools allow flexible stratification, allowing users to create specific models per any given strata (e.g. by species, by terrain, by altitude, by altitude and species, by terrain and altitude, etc.).

Growth models are the basis for generating projections of management plans. Arguably, the most sought after forestry projections are wood flows and, consequently, the cash flows for which they serve as the main input.

IPTIM Assets includes an optimizer which, given a certain set of financial and operational restrictions, generates the optimal plan which maximizes the Net Present Value of any forestry project. Moreover, the system includes modules to compare planning scenarios. Creating stratified multi-attribute growth models and optimizing plans to maximize the NPV give operational restrictions are tasks that are close to impossible with a spreadsheet. But, there is yet another aspect where IPTIM Assets empowers forest directors and investors – it allows them to conduct complex strategic analyses in a fraction of the time that it would take them when using simpler forestry systems or spreadsheets. In summary, IPTIM Assets empowers forest companies and investors with accuracy, flexibility and efficiency.

Accuracy, due to its sophisticated modelling tools and built-in optimizers which deliver the plans which maximize the profitability of any forestry project while considering any given set of models, management regimes, product portfolios, financial objectives and operational restrictions.

Flexibility, because IPTIM Assets allows users to generate parallel plans to test changes in growth models, harvest schedules, product prices, and so on. Plans can then be easily compared within the system’s modules or generated reports.

Efficiency, as these models, projections and reports are generated very easily (in many cases with only a couple of clicks.

We will continue to develop services that will enable making better decisions to ensure sustainability in the management of forests and commercial plantations all over the world.

Continue reading:

Part 1: Our contribution to the restoration of Earth’s forests

Part 2: How satellite images, log tracking and carbon analysis can help restore Earth’s forests

Need some help with forest management optimisation, carbon analysis or forest valuation? Contact us!

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Jussi Rasinmäki

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