Analysis of eucalyptus plantations on the Iberian Peninsula

Abstract: This thesis analyses the prerequisites, profitability and competitiveness of eucalyptus plantation on the Iberian Peninsula and in Brazil. The thesis has a macro perspective and analyses a typical hectare of eucalyptus in each studied region. A survey methodology was used as a strategy to cover a broad perspective using expert respondents. The regions studied on the Iberian Peninsula were the ones found suitable for eucalyptus plantations from an economic point of view. The studied regions were Huelva in the South West of Spain, Galicia in the North West of Spain and Portugal. The quantitative study of Brazilian plantation conditions was limited to only study the economic aspects. The quantitative study had two perspectives, one as a forest owner when the profitability at road side was analysed, and one as a pulp producer, when the wood cost at mill gate was calculated. When the profitability at road side was analysed, KPI´s such as NPV, IRR, B:C ratio and payback period were used. The wood cost was calculated both as EUR per m3 of wood and EUR per tonne of pulp. In the base case Portugal was the region with the highest profitability and Brazil had the strongest competitiveness. When considering a real appreciation of land of > 2 % in the Brazilian plantations, those plantations were the most profitable in this thesis. On the Iberian Peninsula, Portugal was found as the most competitive region, with a wood cost per tonne of pulp 50 % above the wood cost per tonne of pulp in Brazil. The plantations in Galicia and Huelva had good profitability, but poorer competitive strength compared to Portugal. A problem on the Iberian Peninsula is the small sizes of the forest properties. In regions with high growth, the typical properties are only a few hectares in size.