bidding strategies for bc timber sales
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Transcript bidding strategies for bc timber sales
Forest Economics 318
January 22, 2013
CREATING VALUE FROM
COASTAL FORESTS
J.W. (Bill) Markvoort R.P.F.
Table of Contents
Value Parameters
BC Timber Sales
Bid Strategies
Knowledge
Know the Timber Sale and the Timber
Know the Market
Know the Rules and Regulations
Know Yourself
Preparing a Winning Bid
BC Timber Sale A74395, Conrad Creek
Information Bid Package
Winning Bidder
Bid Spreadsheet
Final Economic Results
Conclusions
VALUE PARAMETERS
Log values
By species
By log sorts
Utilization
Harvesting Costs
Roadbuilding
Logging
Transportation
Sorting
Marketing
BC TIMBER SALES
SBFEP formed in 1980
Reorganized as BCTS in April 2003
Strategy is to provide
A credible point of pricing to harvest timber on public timberland
Optimize net revenues to Crown
Provide opportunities for customers to purchase timber in an open and
competitive market.
BCTS manages and administrates
Forest planning and timber cruising
Engineering and layout
Access road construction
Silviculture and Free to Grow.
BID STRATEGIES
Know the Timber
Know the Market
Know the Rules and Regulations
Know Yourself
KNOW THE TIMBER SALE
BCTS Website
Talk to the People who Know
Timber Cruise
Tender Package Summary
Invitation for Application (Bid Sheet)
Key Maps (Location, Cruise, Harvest)
Road Layout, Profiles and Cross Sections
Sample TSL document
Advisories
Contact Person at BCTS
Local Knowledge on Roads, Dumps
Quotes on Towing, Barging, Sorting
Road and Dump Use Fees
Paper Recce
Put all information in a spreadsheet
Make go/no go decision on site visitation
More important on remote sales
KNOW THE TIMBER
Walk the Sale
Walk the road locations
Walk the the blocks thoroughly (especially near boundaries)
Identify harvesting systems
Identify reserves
Identify creeks and riparian areas.
Be aware of biodiversity and wildlife requirements
Assess the timber
Reactivation
New Roads and bridges
Endhaul Requirements and pits
Deactivation requirements
With knowledgeable people
Compare visual estimates with cruise
Local defects (white speck, powderworm, kasuri)
Other Factors
Log Dump Reactivation
Foreshore Tenures
Windfirming
KNOW THE MARKET
Domestic
Accurate Prices based on Industrial Sorts
Specialty Sorts
Trends in Pricing
Pre-Selling
Export
Surplus Tested
Longer Timeline
Extra Costs
Fee-in-Lieu
Requires greater Quality Control
KNOW THE RULES AND
REGULATIONS
Registration and Eligibility
Outstanding Stumpage Accounts
Deposits (Bid versus Total Security Deposit)
Term Extensions and Costs
Withdrawals and Failures to Enter Into the Licence
Pre Work Meeting
Forest Act and Regulations and Other Legislation
KNOW YOURSELF
Risk/Reward
Capital Requirements
Work in Process
Financing
Equipment
Experience
Location
PREPARING A WINNING BID
Prepare Spreadsheet Model
Lock in Log Values
Lock in Harvesting Costs
Stumpage is Locked In
Calculate Available Bid
Calculate Profit and Risk Margin
Bonus Bid
Notice ID:
Notice Type:
Issuing Office:
Title:
7618
BC Timber Sales
Strait of Georgia Timber Sales Office
A89069 McNeil Lake
Posted: 2013-01-09
Expires: 2013-02-07
Take notice that, pursuant to Section 20 of the Forest Act, Timber Sale Licence A89069 is being
offered for sale by the BC Timber Sales Strait of Georgia Business Area. Tenders will only be
accepted from individuals or corporations registered as a BC Timber Sales enterprise in Category 1, 2
and 3 under the BC Timber Sales Regulation.
Closing Date: FEBRUARY 7, 2013 at 11:00 a.m.
Closing Location: Applications will be accepted by the Timber Sales Manager, Campbell River Timber
Sales Office, at: 370 South Dogwood Street, Campbell River, BC V9W 6Y7.
Geographic Location: McNeil Lake
Estimated Volume: 23,676 - cubic meters, more or less
Estimated Area: 32.8 ha.
Estimated Species: Hemlock 10,236 m³ (43%), Douglas-fir 7990 m³ (35%), Cedar 4,374 m³ (18%),
Alder 1,076 m³ (4%), more or less.
The preceding volume and species estimates are based on samples from a Full Cruise. Please see
tender package for additional detail. Bidders are strongly advised to conduct a thorough field review of
the licence area to verify timber volume and grade estimates.
Licence Term: 12 months
Upset Stumpage Rate: $20.39/m³. The upset stumpage rate was determined in accordance with the
Coast Appraisal Manual and applicable to coniferous sawlog grades.
Open to Tender (18 days left)
Licence
A 89069 * February 07, 2013
Number:
Closing Time:*11:00 am Opening Time:11:00 am
Geographic
McNeil Lake
Area:
BCTS Area:Strait of Georgia (Campbell River)
District Area:Sunshine Coast
Volume:23,676 m3 Term: 12 months
Species:Hem 43%, D-Fir 35%, Ced 18%, Ald 4%
Upset
$20.39
Stumpage:
Tender Type:Bid Tender (sec 20) Category: Cat 1,2 or 3
Stand Type:78% 2nd Growth
Logging
Hoe Forwarding
System:
silviculture:CCWR, Windfirm treatment
Season:Dry Season
Road Building:New rd. construction 1.8 km
Sechelt/ Hwy 101/ Menacher Rd./
McNeill Lake FSR/ MNL034
Contact:Mike Romalis(604)485-0717
Avg Piece Size: .94 m3/tree
Net merch 721 m3/ha. 32.8 ha area.
Comments:
4,187 m3 non-competitive($.25)(no bonus)
4 Blocks
Access:
CONCLUSIONS
Knowledge is Key (no surprises)
Work within your level of expertise
Leave margins for both risk and reward
Bid within your limits
Keep re-evaluating your budgets
CONCLUSIONS
If you get it all right and with a bit of luck you end up with:
A Happy Forester
HOWEVER
If Lady Luck works against you
This is what could happen
Timber Sale A80080 Jennis Bay
Over $150,000 of roads already built plus deposits
Then on April 21, 2011
Thank You