Information on costs, yields and profitability presented here refer to Costa Rica, since it is the only country in the region that has data and statistics for melina. The costs of one full production cycle in Costa Rica are estimated at US$1,287/ha. Table 4 presents annual cost information, and Appendix shows detailed cost information indicating the specific activities carried out each year. These figures do not include the land price, which oscillates between US$1,000 and US$1,500 per hectare.
Table 4. Annual costs (US$) for one hectare of melina. Costa Rica, 1998.
|
Year |
Investment (colons/ha) |
|
1 |
446 |
|
2 |
200 |
|
3 |
131 |
|
4 |
160 |
|
5 |
34 |
|
6 |
34 |
|
7 |
53 |
|
8 |
34 |
|
9 |
34 |
|
10 |
53 |
|
11 |
34 |
|
12 |
74 |
|
TOTAL |
1,287 |
Source: Appendix
Stumpage prices earned varies from US$13.5/m3 in the first commercial thinning (at year 6) to US$24.6/m3 for final cut (year 12) (CCF 1998c). There is a price scale that can be applied according to log diameter (Table 5). Sawn wood in the local market is sold for approximately US$160/m3 (CCF 1998b). There are reports of sawn, kiln dried melina being sold for US$225/m3 (Leon 1998).
Table 5. Standing price (US$/m3) of Gmelina arborea according to log diameter.
|
Range (cm) |
Price (US$/m3) |
|
15.0 - 20 |
13.5 |
|
20.1 - 25 |
17.2 |
|
25.1 - 30 |
19.7 |
|
Greater than 30 |
24.6 |
Source: CCF 1998b
The profitability of a melina plantation has been calculated with The Internal Return Rate IRR to be between 12% and 18% depending on the quality of the site and the price of the wood. Table 6 illustrates a financial analysis done in Costa Rica for a plantation located on an average productivity site (16.2 m3/ha/year of commercial volume taken from logs with diameters of 10 cm at their narrow ends). IRR is 16.9% and the Net Present Value (12%) is US$353/ha (Alfaro and Villamizar 1998). The analysis does not consider the financial income provided by the reforestation incentives. If this amount is included the IRR would be much higher.
Table 6. Financial analysis for one hectare of melina (Gmelina arborea) with an initial density of 1,111 trees. Costa Rica, 1998
|
Year |
Costs (Colones/ha) |
Income (Colones/ha) |
Net Income (Colones/ha) |
|
1 |
111,635 |
0 |
-111,635 |
|
2 |
49,948 |
0 |
-49,948 |
|
3 |
32,871 |
0 |
-32,871 |
|
4 |
39,926 |
0 |
-39,926 |
|
5 |
8,495 |
0 |
-8,495 |
|
6 |
8,495 |
100,035 |
91,540 |
|
7 |
13,155 |
0 |
-13,155 |
|
8 |
8,495 |
0 |
-8,495 |
|
9 |
8,495 |
131,976 |
123,481 |
|
10 |
13,151 |
0 |
-13,151 |
|
11 |
8,495 |
0 |
-8,495 |
|
12 |
18,495 |
822,525 |
804,031 |
|
Total |
321,656 |
1054,536 |
732,881 |
Source: Alfaro and Villamizar (1998) with information from JUNAFORCA (1997) and Davies (1997)
Commercial production: Thinning 1: Non-commercial, Thinning 2: 28.5 m3/ha, Thinning 3: 37.6 m3/ha and Final Cut: 128.6 m3/ha. Total Volume: 194.7 m3/ha
The commercialization of melina began in Costa Rica in 1992. The first product made from the species was pallets. Wood from the first commercial thinning was used to accomplish this.
In 1990, the Ministry of the Economy, Industry and Commerce (MEIC 1990) evaluated the quality of the melina pallets. The results were very positive, and the wood was classified as strong and flexible. The first pallets were constructed with wood obtained from the thinning of 4 to 5-year-old trees.
In 1997 the Commercialization Unit of the Costa Rican Forestry Council (CCF) began promoting the use of wood from forest plantations to make furniture and high price items for the export market. One of the woods that showed the most potential in this commercialization program was melina. The marketing of the species took various forms: participation in international forest product fairs (High Point, North Carolina, USA); contact with North American Companies like Domus and Fine Art Lamps; and participation in regional fairs like the one held in September, 1998 in Panama.
Muebles Coronado (Coronado Furniture) was one of the companies that was making melina tables for export to the United States' market. This company was founded in 1977 with the objective of making high quality furniture. Up until the beginning of 1997, they worked only with wood from natural forests like caobilla (Carapa guianensis), cedro (Cedrela mexicana), "cocobolo" (Dalbergia retusa) and others.
In January of 1997, the company's General Manager received information about possible restrictions on the use of natural forest species and realized what a big risk this meant for the investors. His fear was compounded by the fact that they had just taken out a large loan from the national banking system to buy machinery. He contacted the CCF and they began to do their first tests with melina, teak (Tectona grandis) and laurel (Cordia alliodora).
The company now makes three types of tables in melina wood that they sell to Fine Art Lamps, headquartered in Miami, at prices that oscillate between US$220 and US$315. On average, each table contains 0.2 m2 of wood from 6 to 8-year-old plantations. This wood is purchased on the national wood market for US$245 per cubic meter of oven dried boards.
The General Manager states very clearly, "light wood does not mean low quality wood. A high quality product can be produced using the right machinery." Framewood for construction and mouldings are also currently being made from melina. The species has two important advantages: it is easy to work with and it readily accepts stains and lacquers.
Another example of the potential of the wood is given by the Faber Castell company which began operations in August, 1998 making pencils from melina wood that they buy from Ston Forestal. Faber Castell buys logs from 20 to 30 cm in diameter. All the waste wood from their production process is converted into chip and sold back to Ston Forestal. This permits optimal use of the raw materials (Zeaser 1998).
