Brief report description This project provides for the establishment of an enterprise for the extraction of valuable tropical tree species in the territory of the Republic of Liberia and the implementation of the materials received. To this end, cutting down of various valuable tree species, their delivery to the seaport and implementation will be carried out in the designated forest areas.
A full description of the report. Investments fully cover the project’s need for financing, ensuring a positive balance of free cash throughout the study horizon. The project has a very significant margin of safety to changes in the level of project prices, sales of products and the level of current costs (while other costs remain the same). Extraction of forest resources in this project is carried out exclusively in the permitted amounts and conservation of forest resources.
Liberia is a developing country where, after a long period of political, social and economic instability, there has been a general economic growth. At the moment, in Liberia, there are all the prerequisites for a substantial growth in these areas of the economy - forests have a huge supply of resources.
According to this project, the development of large forests in order to extract logs and sawn timber of valuable tropical trees will be carried out in the Republic of Liberia.
The main purpose of these tree species is furniture (solid or inlaid), parquet, use in the manufacture of musical instruments, various souvenirs, etc.
Mining will be carried out in designated areas, delivery to the port will be carried out on the roads by road. Sales to buyers will be made directly at the port at the time of shipment. Further, the developed logs become the property of the buyer and are transported by water transport to Europe and Southeast Asia.
Mining is limited by various laws and regulations.
The focus of the project
The investment project of the company is focused on:
1) The development of the economy of Liberia, meeting the increasing demand for wood from importing countries;
Liberia is a country with great potential that, if used rationally, could enrich this small country: huge deposits of iron ore, mining of diamonds and gold, large stocks of wood and hydro resources.
The wood industry is also of great importance in the development of the Liberian economy.
The development of the manufacturing industry will allow Liberia to independently use its resources in production, rather than simply exporting them.
2) development of the social infrastructure of Liberia - by allocating 15% of the profits to the development of the infrastructure of the tribes (schools, hospitals, roads, etc.);
3) the creation of new jobs;
Liberia suffers from an enormous unemployment rate of 85%, economic growth rates do not allow to solve socio-economic problems and reduce tensions in the country.
Infrastructure development is necessary to raise the level of education of the population and develop, as well as to finance special programs for training and retraining workers.
4) ensuring replenishment of the budget;
Comprehensive assessment of project parameters indicates a high degree of investment attractiveness.
Detailed table of contents Table of contents.
Table of Contents2
Main indicators of the valuable tropical forest resources market5
Key project indicators6
Description of the company and industry8
Socio-economic situation in Liberia11
Tropical Forest Resources Market15
Trends in the market for the production and export of tropical forest resources17
Trends in the import and consumption of tropical forest resources22
Management and Organizational Plan35
Project financing 38
Project financing (thousand $) 39
Cash Flow Statement ($ Thousand) 48
The focus and effectiveness of the project52
The focus of the project52
The model of discounted cash flows (thousand $) 54
Qualitative risk assessment of the project
Appendices List of tables (total-25):
1. IRR of the project (the indicator is determined by the flows without taking into account the residual value of the project).
2. Tropical timber production of primary processing and trade in them, 2003–2004, million m3
4. Description of investment.
5. Project financing (thousand $) since 2007. on 2016
6. The cost of operating fund for road construction (July-October) to 2010
7. Expenses for the operational fund for forestry operations (October - July) until 2010
8. Expenses for operating fundfor road construction (July-October) from 2010. 9. Expenses for operating fund for forestry operations (October-July) from 2010.10. Equipment for road construction. Forestry equipment.12. Equipment available on site.13. Equipment purchased at their own expense. Sales plan. Profit and loss plan (thousand $) since 2007 on 2016.16. Cash flow statement ($ thousand) since 2007 on 2016.17. The main breeds (names are given in Latin) .18. The need for investment arises from the first day of the project.19. The model of discounted cash flows (thousand $). 20. The main financial and economic indicators of the project (according to development options) .21. The sensitivity of project indicators to changes in project prices.22. The sensitivity of project performance to changes in sales.23. The sensitivity of project performance to changes in the comparison rate.24. The sensitivity of the project indicators to changes in tax rates.25. The sensitivity of project performance to changes in investment costs. A list of charts (total-4): 1. The main exporters of tropical logs, 2002-2004. 2. The main exporters of tropical sawnwood, 2002-2004. Major importers of tropical logs, 2002-2004.4. The main importers of tropical sawnwood, 2002-2004.