Financial evaluation of management in secondary forests of canelo (Drimys winteri) in the Coastal Range of Valdivia, Chile

Abstract

Young secondary forests of Drimys winteri have excellent growth and regeneration, and cover an area of 230,000 hectares in Chile. However, there is no supply of high-value timber to feed the growing market opportunities. The objective of this study was to evaluate the profitability of thinning trials in secondary forests of Drymis winteri in a medium-productivity site. The thinning treatments were considered late thinning, and were named as moderate thinning (E1), heavy (E2) and heavy (E3), in addition to a control treatment (E4). The yield was determined using the net present value (NPV), land expected value (LEV), and modified internal rate of return (MIRR), incorporating discount rates of 6 %, 8 % and 10 % and low administration costs in two scenarios, no costs before thinning (S1) and costs since the establishment of the stand (S2). The results for the NPV and VPS in S2 were negative, in contrast with S1, which doubled its profitability compared with the control treatment. The E2 treatment had the highest profitability in the S1 case, with a NPV of USD 2,724 ha^–1, a VPS of USD 3,771 for a 6 % rate, and a MIRR of 19 %. For an operational level the moderate thinning treatment (E1) is desirable since it reduces the risk of windfall, generates the highest yield in volume, and profitability values slightly lower than E2.