Title:
The Influences of the Profitability by Fit Analyzed by the ''Virtual Lumber Mill Business Simulator''
Author(s):
Ishikawa, Y., Komata, H., Ishiko, S.
Document(s):
Paper
Poster
Abstract:
By introduction of Feed in Tariff (FIT) in Japan, the power generation which used a woody biomass is getting more attention. Economic effect to the forestry is expected by the FIT. Meanwhile, the deterioration of the profitability of the saw mill by the soaring of the raw timber price is worried about. We developed the software of the management simulation of virtual lumber mill, to analyze the economic impact to the lumber industry by the FIT. The software showed the profit of lumbering with entering the variables such as a factory scale, a log diameter, a product item, a mechanical running time, a raw timber price, and a chip selling price. It was possible to find way to improve the profitability by the software analyzing the benefits of saw mill while setting evaluation scenarios. The “Virtual lumber mill business simulator” can be used to estimate the impact on the business performance of lumber mills, when the prices of raw materials (raw timber) and wood chips change as a result of increased competition for raw materials due to increased demand for electric power generation. The simulation assumes lumber mills that consume 30,000 m3 of raw timber per year of Todo fir or Japanese larch logs, and computes the values of the above business performance indicators based on the production cost for each of these timber varieties. For the test scenarios, the raw timber price is increased by 5% and 10%, the price of off-cut chips is increased by 5% and 10%, and the prices of both the raw timber and off-cut wood chips are increased by 5% and 10%. Greater competition for raw materials would clearly have a substantial impact on both lumber mills that use Todo fir logs and mills that use Japanese larch as their raw timber source. The limiting values for raw timber price increase (beyond which operating profit turns to loss) are 3.7% for Todo fir mills and 3.5% for Japanese larch mills. Any further price increases would have to be offset by an increase in the price of off-cut wood chips.
Keywords:
power generation, timber, wood chips, business issue
Topic:
Biomass Policies, Markets and Sustainability
Subtopic:
Markets, Investments & Financing
Event:
23rd European Biomass Conference and Exhibition
Session:
4AV.1.7
Pages:
1463 - 1467
ISBN:
978-88-89407-516
Paper DOI:
10.5071/23rdEUBCE2015-4AV.1.7
Price:
FREE
