Evaluation of forestry companies with differing administrative and production costs

This paper contributes to the ongoing discussion on the improvement of private forest management in Poland. It examines characteristics of various types of forestry companies encompassing either completely private forests or a mixture of private and state-owned forests. Different possibilities for operating private and state-owned forestry companies were examined. The assessment of forestry companies was carried out for three categories based on forest inventory data and economic information. Each of the categories contained three different types of forestry companies classified as follows: I – companies managing private forests only, II – companies managing both private and state-owned forests (e.g. those managed by a state-run forest district), III – the same as in II but assuming minimal costs. The different types of forestry companies were then subjected to a more detailed analysis with respect to the following factors: A – only their own administrative costs, B – administrative costs and overheads assumed to be the same as in the State Forests, C – overheads assumed to be the same as in the State Forests but administrative costs are calculated as in A. For each of the scenarios, income, costs and revenues were calculated. The different types of forestry companies established above also allowed for an assessment of the used data and their collection. In conclusion, incomes of the forestry companies were generally low due to forest stands being managed by companies. Only in scenario A, which assumes very low management costs, did each of the company types gain revenues. This means that the main direction for the development of forestry companies should be to maintain low management costs