Opportunity Scenario for Growing Business Case Study Solution
The successful attainment of the sustainable forest management would most likely provides integrated advantages to all, which range from safeguarding local livelihood to protect the ecosystem and biodiversity provided by the forest, reduction of poverty in rural areas and mitigation of some of the effects of the climate changes.
Since the year 1980s, the significant share of the international funding and attention has been garnered by amazon rain forest biome whereas the other Brazilians biomes have gained far less funding as well as attention. The sustainable forest management in amazon rain forest has greater potential and it would be the ultimate and major driving force for the development of the country as a whole.
For the sake of providing protection to the forest ecosystem, it can be concluded that the sustainable forest management is one of the most suitable and appropriate kind of forestry. Fortunately, there are number of business opportunities for the sustainable forest management in the amazon rain forest. The opportunities are discussed below:
The environmental opportunities:
It includes shorter trees ‘growth cycle allowing the faster timber regeneration, high wood quality in some tree species, and mild climate makes agro forestry more feasible as compared to temperate forest.
The technical opportunities:
It includes adapting standards such as certification which is technological transfer for the harvesting equipment and better monitoring as well as promotion of non-timber forest products.
The sociological opportunities
The sociological opportunities includes raising awareness amongst public for the benefits and advantages of the forest ecotourism and conservation, and providing education of the significance of the sustainable forestry practices and work safety practices to the forest managers and workers.
Plantation drivers
The main plantation driver has been the development in the industrial sector which has been supported or assisted by development bank loans, foreign investments and financing and funding from local sources particularly from the Brazilian National Development Bank. (BNDES). The key drivers or factors for the favorable foreign investment developments are listed below:
- Good growing conditions.
- Available property or land.
- Access to markets.
- State-of-the-art plantation technology.
- Environmental regulation .
- Eucalyptus use in saw logs, pulp, and tree based carbon trading, bioenergy and poles.
The investment in the sustainable forest management is considered as the lucrative and safe investments. Besides, the investment in the plantations in amazon rain forest is seen as the mainstream investment that is highly facilitated by the good and easy access to the broad range of financing instrument and financing. Also, the domestic direct investment in processing and forestry are of significant scale in the region.
In Brazil, the investment in the sustainable forest management is driven by the escalating or increasing demand for all types of forest products, including wood in China. One of the remarkable development in Brazil is the accelerated investment in the sustainable plantation operations and integrated industry. There are strong environmental regulations and policies in Brazil linked to the incentives schemes, which have enhanced the environmental and social quality of plantation in vestment.
Shortly, Brazil remains the most attractive target for the forest investment in Latin America. The forest sector in Brazil is accounted to 3 percent Gross Domestic Product (GDP) and the share of the total exports of the forest products is about 5 percent. The forest sector has impressively expanded over the past two decades with 6.5 percent average growth rate.
In order to avoid the negative experiences, which includes poor quality plantation, sub optimal land use, inefficiencies, neglect small scale growers and loss of biodiversity, there are various incentives which should be:
- Performance based – emphasizes on the high productivity and high survival rates
- Combining tactical assistance with the direct incentives
- Inclusive instead of exclusive
- Compliance with the best social and environmental standards.
Since, the main consideration of the investors is to maximize the risk adjusted returns. The factors that impact their returns are as follows:
- Economic, regulatory and political stability
- An access to growth markets and growth potential
- Good governance and investment environment
Advantages and attractiveness of investment
The investment in the Brazilian forestry provides non-volatile markets with the low risk to return ratio and high long term returns on investments. The benefits that the investment in the sustainable forest management would provide are discussed below:
Environmentally conscious:
The investment in the sustainable forest management tends to provide the unique opportunity to the investors to do something healthy for the society while accruing a handsome capital gain.
Long term and stable investment:
With the minimal fluctuations in the supply and demand and long growth periods, the investment in the forestry initiative would provide the stable long term return projections to the investors.
Low power of entry barriers:
The forestry investment requires low investment as compared to other business initiatives and being in the stable un-leveraged market most likely offers less volatile and more dependable returns.
Little macroeconomic effects:
Irrespective of the fluctuation in global currency and which government is currently in power, interest rates and inflation with more consistent growth rates are produced by the long term factors of the forestry and its application.
Since, the macro situation has been consistently increasing over time, it is considered the underlying driver for the forestry investment in Brazil, which includes profitable growth and biological growth of the forestry industry.
Minimize risk through hedging:
The stability in the forestry makes it a perfect portfolio hedge against the significantly volatile markets.
Value creation:
The project aims to provide the good quality analysis and information on the forest land and resources use in order to improve the decision making and policies by stakeholders so that contribution of Brazilian forest would be increased to national sustainable development. The project would most likely facilitate the participatory and informed strategic decision making in the overall natural resource management with the major focus on reducing the unsustainable use of land in order to conserve carbon dioxide and biodiversity.
The stakeholders of the project would contribute to the success of the project through improved decision making via providing relevant, credible and timely information and policy analysis related to the dynamics and state of forest resources in brazil, land cover, their management, changes, the drivers impacting the contribution of the Forrest to the livelihood improvement and poverty reduction, land degradation and forest carbon stock.............
This is just a sample partical work. Please place the order on the website to get your own originally done case solution.
Related Case Solutions & Analyses:
Three in the Middle: The Experience of Making Change at Micro Switch
Adolph Coors in the Brewing Industry
The LEGO Group: Envisioning Risks in Asia
Overcoming Political Opposition: CNG Mandates in Delhi B
Hybrid Electric Vehicles: 2011 Update
Tennessee Responds to the 2009 Novel H1N1 Influenza Pandemic
Padraig OCeidigh and Aer Arann: Building a Business in the Context of a Life
Aligning Governance Interests for the Long Haul
United States Postal Service: Office Products Sourcing
Trend Micro (B)
