Evaluating Mill Risk and Investments when Analyzing Timber Markets and Wood Baskets

Posted by Brooks Mendell at forisk.com

When assessing timber markets and wood baskets for forest industry and timberland investments, one line of analysis focuses on the “riskiness”, likelihood and competitiveness of existing and announced wood-using manufacturing facilities in and near the market. Timberland investors want to confirm that (1) announced mills get built and (2) existing mills remain open to buy their trees and logs. Existing wood-users have interest in the health of current and potential competitors for wood raw material. And new wood-using projects – such as greenfield sawmills or firms expanding capacity – want a sense for the sustainability of local timber supplies, labor pools, and markets for manufacturing residuals.

Continue reading the full article