What is more valuable, logs or the sawmill?
A small-time woodcutter and landowner strike a deal to seek and harvest saw logs to feed Asian construction boom. Woodcutter treks the wilderness Weyerhauser abandoned and locates the largest high-quality forest found in Asia in the last 20 yrs. Few trust the reports of log riches found in the jungle. Woodcutter harvests enough logs to entice investors with their veneer quality and large diameter to pursue plan of supplying woodcutter owned sawmill with woodcutter owned trucks driven over woodcutter built/owned roads.
Landowner prefers experienced international mill operator to develop and bring logs to market.
Woodcutter attracts partnering interest from largest mill operator in the world for the processing/sale of logs. Partner willing to invest billions in expansion to be fed by woodcutters logs to meet near term Asian demand and extend current supply contracts. Woodcutter also has 4 million acres of forest leased and a nose for finding loggable stands.
Woodcutters logs are valueless until they are moved/processed and sold. Further log harvesting is pointless until partnering plans are finalised and mill expansion is agreed upon. Does woodcutter have ultimate leverage in this first deal or will woodcutters margins improve as he locates and sells future logs to feed a 2nd mill expansion?
Woodcutter announces he is moving his logging teams and equipment a hundred miles away to begin log harvest in an old-growth virgin woods he has located.
What does that say about the sawmill expansion?
Who will harvest the logs in the first forest?
Why move 100 miles away to cut when there are forests closer?
