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I would appreciate some light on my current ignorance about getting into logging

Started by LumberLarvae, January 09, 2016, 12:33:12 PM

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LumberLarvae

Hello all, I am LumberLarvae and I'm definitely very new to this world so I will jump right in...

You seem like the most specialized forum to answer whether my thoughts about investing a large amount into creating a logging company controlling a few teams and setting up in Africa is viable.

-Budget is ~8 million GBP(£)
-Little to no contacts/knowledge currently (ready to learn anything).
-BUDGET CURRENTLY INACCESSIBLE

There is obviously a lot of competition in rainforests, so would this venture even be profitable and how would one establish themselves and start logging?

Thank you so much for having me here anyway and looking forward to any advice

Ljohnsaw

John Sawicky

Just North-East of Sacramento...

SkyTrak 9038, Ford 545D FEL, Davis Little Monster backhoe, Case 16+4 Trencher, Home Built 42" capacity/36" cut Bandmill up to 54' long - using it all to build a timber frame cabin.

CCC4

bout all I can say is Welcome! At least you have a little change to play with for buying equipment. I'm sure there is someone on here that can offer some insight but I can already tell ya you are going to have to provide more information. Good luck, this sounds interesting for sure!

LumberLarvae

Quote from: ljohnsaw on January 09, 2016, 01:04:05 PM
I can't be of help but this will be an interesting thread to follow!

That's fine, great to share a thread with you

Quote from: CCC4 on January 09, 2016, 01:13:09 PM
bout all I can say is Welcome! At least you have a little change to play with for buying equipment. I'm sure there is someone on here that can offer some insight but I can already tell ya you are going to have to provide more information. Good luck, this sounds interesting for sure!

The fact that you said 'little change' scares me a lot, is my budget too small; how much does it cost to start a medium sized logging company with ~3 teams in a location like India or Africa?

Thanks for joining us in this thread also

OntarioAl

Welcome to the forum.
I see you are talking English pounds (making your home in England ?) which converts to $.11.6 million US.
The "little change" quip is light hearted joking.
In North America  that amount of capital is more than adequate to set up several logging operations.
In  India or Africa I wouldn't begin to speculate on the costs of setting up operations with the Political, Social, Economic, Infrastructure and Marketing considerations.
Good Luck in your venture
Al
Al Raman

BargeMonkey

 I'm sure for the right kind of money someone on here would pack a bag and help you get your operation off the ground.  :D. Wouldn't know where to even begin trying to establish a company in Africa / India. Equipment, raw materials, market for them, fuel, repairs, the actual labor that's qualified to cut the wood, sounds like a challenge. 11.6 million U.S will buy you just a little bit of equipment.  ;D

LumberLarvae

This forum feels great already, what you just said has given me a lot of relief hahah, and yes I live in the UK.

Quote from: OntarioAl on January 09, 2016, 01:41:28 PM
In  India or Africa I wouldn't begin to speculate on the costs of setting up operations with the Political, Social, Economic, Infrastructure and Marketing considerations.

Can you elaborate what you mean with this point?




beenthere

LL
Welcome to the Forestry Forum.

Given the rules and regs that these countries have in place (at the encouragement or insistence of enviro groups around the world), I'd advise you to get a good forestry/engineering consulting firm involved with your plans.

Also, click your forum name and it will take you to where you can update your profile with at least your location, as it will help a lot answering your questions and offer advice.
Am sure you like reading other posts here, as likely you have been searching the archives, and find it helpful to know a bit about the poster and their location. ;)
south central Wisconsin
It may be that my sole purpose in life is simply to serve as a warning to others

OntarioAl

Both BargeMonkey  and beenthere have effectively expanded on my comments. beenthere tendered exceptionally good advice to find a reputable consulting firm familiar with India/Africa to educate you and assist you in your efforts.
Al
Al Raman


Nemologger

If you want to make a small fortune logging, 1st start with a big fortune...

Sorry I couldn't resist.
Clean and Sober

ehp

Well I will try and see if I can help you at all, my father had logging companies in 4 different countries . first thing before ever thinking about buying a single machine you need to travel to where you want to setup and really look around and see what laws they have on cutting timber , who is the big man in the area and is he ok with you coming in and starting a logging company . Most guys will think this part is stupid but that last statement is the biggest thing you need to find out . Your in their sand box so you going to have to play by their rules , Things are a lot different in these countries than what we are use to and what is fair or correct means nothing to them. I can go on and on but this is a start

LumberLarvae

Quote from: Nemologger on January 09, 2016, 03:24:18 PM
If you want to make a small fortune logging, 1st start with a big fortune...

Sorry I couldn't resist.

I know this is just a 'saying' but if it actually holds merit, why do you think logging is usually unprofitable...?

Quote from: ehp on January 09, 2016, 03:50:34 PM
Well I will try and see if I can help you at all, my father had logging companies in 4 different countries . first thing before ever thinking about buying a single machine you need to travel to where you want to setup and really look around and see what laws they have on cutting timber , who is the big man in the area and is he ok with you coming in and starting a logging company . Most guys will think this part is stupid but that last statement is the biggest thing you need to find out . Your in their sand box so you going to have to play by their rules , Things are a lot different in these countries than what we are use to and what is fair or correct means nothing to them. I can go on and on but this is a start

Yes I agree completely with that advice. What average annual return (%) did your father see with each company in these locations, if you don't mind asking?

And to gain permission to log what was involved (annual fee, one time fee, % of profit etc..?)

Thanks

ehp

ever country is different and the more 3 class  world the area was the more you better watch your back big time , in these kind of countries a pencil and a piece of paper is not the best way to see before hand if your going to make a profit cause you miss a lot of things that you will find out that needed to be taken care of and lots had nothing really to do with logging , remember the part about the big dog . Also logging in some types on jungles is a lot tougher than what most think and the trees per area is low but big so long skidding , I have seen up to 8 miles in central America so a skidder like a 668 clark would get 2 trees a day , big trees and worth good money . You need to find out where your going to ship your trees or sell them to , a lot of the countries you cannot move  logs that have not been at least sawn on 2 sides out of their country, some its 4 sides . So before spending a pound on any equipment you better ask around and find your sales way before doing anything

oldseabee

Where in Africa are you thinking about and what type wood. South Africa is probably the most stable. I worked for Bell Equipment out of Richards Bay, They do build some logging equipment. They mostly deal in loaders and artic trucks, and were selling John deer as the local agent, but you can probably ask questions about logging and regulations and markets, they have a web site, you can get to the Richards Bay location, that's where they started.

WV Sawmiller

LumberLarvae,

   I'd tread real lightly. I have worked in Cameroon and Guinea and vacationed in many other countries in Africa as well as other parts of the world. I'd be very careful in your dealings and be sure I had on the ground contacts with extensive experience that you trusted. Conditions in many of these countries is constantly changing. In Mongolia when we got ready to start producing copper and gold, the government passed a new law requiring 2/3 of the profit to go to the government. Even making contacts with the "big man" in the area may mean little if he is subject to be replaced overnight. Corruption, theft and quality issues are rampant. Don't be surprised if your log trucks suddenly get hit by "safety inspections" where the local officials suddenly start stopping the trucks (basically a shakedown) until payment is made. Once the logs are cut don't be surprised to find the property lines have changed and you find the logs don't belong to the person you paid for them and expect to pay damages. 

   There is money to be made and you can provide much needed jobs but it is very unstable.

   Cultural issues will arise with bad blood between the various tribes and groups. I once nearly caused a riot because I was about to set up a dining tent with the door facing the wrong direction which was real bad juju.

    Safety and use of high tech equipment will be an issue. You can expect to be required to hire local employees (starting with the chiefs relatives). Medical issues will have to be addressed. I ran out of lines on my shot records long before we ran out of diseases to beware of. Basic hygiene and drinking water can become a major issue.

    I love Africa and the people but many of the places I worked and visited are now off limits due to political issues. Good luck but be sure to make good site visits first.
Howard Green
WM LT35HDG25(2015) , 2011 4WD F150 Ford Lariat PU, Kawasaki 650 ATV, Stihl 440 Chainsaw, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once

LumberLarvae

Quote from: WV Sawmiller on January 09, 2016, 06:04:58 PM
LumberLarvae,

   I'd tread real lightly. I have worked in Cameroon and Guinea and vacationed in many other countries in Africa as well as other parts of the world. I'd be very careful in your dealings and be sure I had on the ground contacts with extensive experience that you trusted. Conditions in many of these countries is constantly changing. In Mongolia when we got ready to start producing copper and gold, the government passed a new law requiring 2/3 of the profit to go to the government. Even making contacts with the "big man" in the area may mean little if he is subject to be replaced overnight. Corruption, theft and quality issues are rampant. Don't be surprised if your log trucks suddenly get hit by "safety inspections" where the local officials suddenly start stopping the trucks (basically a shakedown) until payment is made. Once the logs are cut don't be surprised to find the property lines have changed and you find the logs don't belong to the person you paid for them and expect to pay damages. 

   There is money to be made and you can provide much needed jobs but it is very unstable.

   Cultural issues will arise with bad blood between the various tribes and groups. I once nearly caused a riot because I was about to set up a dining tent with the door facing the wrong direction which was real bad juju.

    Safety and use of high tech equipment will be an issue. You can expect to be required to hire local employees (starting with the chiefs relatives). Medical issues will have to be addressed. I ran out of lines on my shot records long before we ran out of diseases to beware of. Basic hygiene and drinking water can become a major issue.

    I love Africa and the people but many of the places I worked and visited are now off limits due to political issues. Good luck but be sure to make good site visits first.

This was very informative, thank you.

To me Africa seemed like the surest option because of the amount of political problems making for much more grey area when it comes to logging - it turns out I was completely wrong.

What type of tree do you guys believe will be the most in demand/valuable over the next 30-50 years?

BargeMonkey

 The logistics just don't add up unless you where getting into it with someone already familiar in the area and you could see on paper / tangible evidence that your not going to be pouring money down the drain. I was inches from taking a bunch of equipment over to Africa / Nigeria that was sold by my employer. Who wouldn't want to tandem tow 2 large old barges with a small boat 1/3 of the way around the world, risking being taken hostage or sinking for a big bag of money ? What I mean is, the risk-reward equation for setting up a logging operation blind is worse odds than a Powerball lottery ticket.
I get the feeling you have the "get rich quick" attitude, nothing wrong with it but I don't think your planning on having your boots in the mud in some 3rd world hell hole actually making it happen. Logging isn't a low risk / high return business, and the bigger you get it just gets worse. 90% of us on here, from what I see are running well worn stuff that we maintain ourselves, sourcing local products in a semi local market that isn't usually friendly to outside business, not that it can't be done but supply / demand just don't allow it.  11.8 million would buy enough used / new iron here to get your own TV show.  :D

LumberLarvae

Quote from: BargeMonkey on January 09, 2016, 11:01:43 PM
The logistics just don't add up unless you where getting into it with someone already familiar in the area and you could see on paper / tangible evidence that your not going to be pouring money down the drain. I was inches from taking a bunch of equipment over to Africa / Nigeria that was sold by my employer. Who wouldn't want to tandem tow 2 large old barges with a small boat 1/3 of the way around the world, risking being taken hostage or sinking for a big bag of money ? What I mean is, the risk-reward equation for setting up a logging operation blind is worse odds than a Powerball lottery ticket.
I get the feeling you have the "get rich quick" attitude, nothing wrong with it but I don't think your planning on having your boots in the mud in some 3rd world hell hole actually making it happen. Logging isn't a low risk / high return business, and the bigger you get it just gets worse. 90% of us on here, from what I see are running well worn stuff that we maintain ourselves, sourcing local products in a semi local market that isn't usually friendly to outside business, not that it can't be done but supply / demand just don't allow it.  11.8 million would buy enough used / new iron here to get your own TV show.  :D

Very wise words, I have 2 questions for you if you don't mind answering:

1) If enough research is done with the right people involved and proper networking; how profitable is logging in rainforests, with a few teams when done correctly?

2) Do you estimate the price of wood to increase or decrease in the next 50 years seeing how current developments are going...?

I understand the second question is a shot in the dark speculation but I would love an opinion on it. And thank you!

BargeMonkey

 I'm sure if you did some research and made some contacts you could find better answers. If you could have predicted 40 dollar a barrel oil currently would you have thrown all your money in oil 3-4yrs ago during the peak ??? Teams ? I'm pretty sure logging in the areas your describing is more like "hack and run" than what's practiced here in N.America. a couple of these lasts posts had some great information on those parts of the world. I know that if I had that kind of coin to play with it wouldn't be invested in logging.

kensfarm


teakwood

I would recomand that you dont invest that kind of money in those country's. i give that investment a 80% chance to fail.
Very good points said from the older well known forumits. Other thing that ocures to me is corruption, in these country's you have to know where and with how much you fill every hand.
I am swiss and i live now 13 years in Costa Rica, it tooked me at least 4 years to completely understand culture, language, laws and .....
With that kind of money i would by lots of land in central america and start with teak plantations! The investment is safe here and you can expect a very good return on your money. I dont know if you can wait 20years dough.
National Stihl Timbersports Champion Costa Rica 2018

timberlinetree

Are you doing this because you like forest equipment and wood or just for money. If it's just for money, I wood ( sorry no pun intended)  :D look elsewhere.
I've met Vets who have lived but still lost their lives... Thank a Vet

Family man and loving it :)

CCC4

You have enough money to do whatever you want in logging...why stop there? Why not also include a sawmill operation, create your own niche market for exotics and create your own customers in other countries? If you have the right timber and can find a crew to log it, a crew to mill it and then you ship it all over the World...that seems doable to me. You would set your own market and corner it wouldn't you?

ehp

that is how things donot work in lots of these countries , I did not want to point stuff out point blank but you got to pay lots of people to work in these types of countries or you just donot work, everyone has their hand out looking to get a piece of the pie , you can have all the money in the world which they like cause they plan on getting all that money for them selves , you have to be very smart about doing these kind of things, yes you can make money but make sure you got all the bases covered

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