Forest valuation

valuation1Carrying out a forest valuation requires knowledge of what there is in the forest (forest inventory information), knowledge of what the future expectations might be for that forest (yield models), understanding of the market prices, costs and returns that might be achieved, and knowledge of the forestry business operations. Further, it requires adoption of an appropriate valuation process and a method considering the actual purpose of forest valuation and type of the asset being valued. The growing stock is valued in its present location and condition excluding any increases in value due to e.g. larger investments in silvicultural activities or replanting of harvested areas. This means that the valuation period is one rotation, allowing the trees to reach maturity, based on their rotation age, where after they are harvested without any new investments into replanting.

Macro economic

Riau economy in the third quarter of 2012 showed an increase. This, supported by low inflation. By incorporating elements of oil and gas, Riau economic growth in the third quarter 2012 increased to 4.06% (yoy). Meanwhile, by removing the elements of oil and gas, economic growth at 8.26% (yoy).

Domestic demand, especially consumption, is still listed as the main driver of growth sources of Riau. Meanwhile, the external trade performance Riau began to show a slowdown, despite positive growth. The slowdown is caused by a weakening of commodity demand Riau, especially China, India and the European Union. In accordance with Bank Indonesia estimates, in the fourth quarter 2012, the Riau economy is expected to remain relatively stable. Challenge the internal side, find more productive oil wells and the downward trend in prices of agricultural and plantation commodities are expected to potentially provide disincentives businesses to increase production capacity. While the external side, the risks faced by especially coming from the high uncertainty of the euro zone economic recovery which is certainly expected to potentially push global energy commodity price movements and cause instability in the global economy. By considering these conditions, by incorporating elements of oil and gas, Riau economic growth in the fourth quarter 2012 is expected to grow relatively stable in the range of 3%-4% (yoy). Meanwhile, by removing the element of oil and gas, economic growth is expected to grow in the range of 7.4% -7.9% (yoy). So the whole year 2012, Riau economic growth will be around 3.8%-4.4% and 7.4%-7.7% (non-oil and gas).

Investment performance, as reflected in Riau Riau GFCF recorded growth during the quarter down from 6.27% (yoy) in the first quarter of 2012 to 5.98% (yoy). Meanwhile, by removing the elements of oil and gas, Riau GFCF recorded higher growth which amounted to 11.73% or experiencing accelerated growth compared to the previous two quarters. Based on the accelerated growth of gross fixed capital formation, which is not expected, during the quarter, affecting the growth of non-oil sector, a factor to the development of infrastructure such as PON-18 flyovers, stadiums, offices, apartments, shopping centers, hotels and airports where SSK II. Reflecting the relatively high consumption of cement Riau that in the second quarter 2012 totaled 361.46 thousand tons, growing by 15.68%. Despite the relatively slow growth compared to the first quarter of 2012, but the level of cement consumption Riau during the quarter was relatively higher when compared to the average cement consumption in 2011 amounted to 300 thousand tons. In addition, the development of truck sales indicator is still high which was recorded during the quarter grew by 49.93%, higher than the growth in the first quarter of 2012 which was recorded at 13.34% (yoy). In line with the growth of investment, the amount of investments financed through credit is still the high growth rate of 20.97% with the realization of Rp11, 30 trillion. Most of the loans disbursed investment banking sector absorbed Riau main construction is expected in line with the high demand for investment funds in order to PON-18 which will take place in Riau this year.

Meanwhile, the rapid development of investment in Riau also be seen from Foreign Direct Investment (FDI) and Domestic Investment (DCI) into Riau Province. In the reporting period the number of incoming FDI totaled USD. 289, 01 thousand or 10.768% increase compared to the previous quarter. While the number of domestic capital into Riau province during the quarter reached Rp 3,507 trillion, increased significantly by 896.38% compared with the previous quarter.

During those events, import and export pulp, volume by is relatively increased and during those events, import and export pulp by USD is relatively increased (Source: BPS, Statistics Indonesia).Riau external trade performance during the quarter recorded a growth of less encouraging when total export growth slowed from 5.91% (yoy) in the first quarter of 2012 to 2.28% (yoy). Slowing exports mainly caused by suboptimal production of oil and gas during the quarter, resulting in declining oil exports. On the other hand, the growth of imports recorded an increase of 7.27% (yoy) in the first quarter of 2012 to 8.70% (yoy) during the quarter were primarily derived from increased imports of capital goods. Meanwhile, by removing the elements of oil and gas, exports showed a significant improvement when compared to the previous quarter. Growth in non-oil exports in the second quarter Riau in 2012 grew up triggered by rising pulp and paper commodity exports to major trading partners. In the quarter under review, the volume of pulp and paper commodity exports reached 562.31 thousand tons, growing by 11.18% (yoy). On the other hand, a significant increase also occurred in non-oil imports component recorded growth increased from 4.51% (yoy) to 8.75% (yoy). This condition is driven by increased imports of raw materials, especially chemical fertilizers and sand. It is not indicated irrespective of the growing need for infrastructure development and processing of non-oil industries (crude palm oil, pulp and paper and rubber processing) to improve the productivity of its output.

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