Conference Agenda

This study develops and applies an economic–financial model to evaluate the feasibility and profitability of Teak (Tectona grandis) and Melina (Gmelina arborea) plantations established at the Panamerican Agricultural School, Zamorano, Honduras. The analysis integrates technical, economic, and financial components, including establishment and maintenance costs per hectare, wood volume estimates derived from growth records and allometric equations, and historical and projected timber market prices. Independent cash flow projections were developed for each species, considering their biological growth cycles and optimal harvest ages, with a 25-year evaluation horizon for Teak and a 19-year horizon for Melina.

Financial feasibility was assessed through the calculation of Net Present Value (NPV) and Internal Rate of Return (IRR) under two discount rate scenarios (8% and 15.41%), representing institutional and private opportunity costs of capital. In addition to deterministic evaluation, uncertainty and risk were incorporated through Monte Carlo simulations using the @RISK software, allowing the probabilistic assessment of key financial indicators and the sensitivity of project outcomes to variations in critical variables such as timber prices, production volumes, and investment costs.

The results show that although Teak exhibits a higher unit market value, its longer rotation period increases capital immobilization and financial exposure. In contrast, Melina achieves higher harvested volumes per hectare and faster investment recovery, which leads to superior financial performance under the evaluated conditions. The stochastic analysis indicates a higher probability of favorable economic outcomes for Melina, reflecting lower overall project risk. The findings confirm that both species are financially viable forestry alternatives in Zamorano.