In mid-November 2018, Brian Johnson, a Director of Margules Groome, collaborated with Cori Ham from the University of Stellenbosch in the presentation of a two-day advanced course on forest valuation in Pietermaritzburg, South Africa.
This engendered considerable interest from across the spectrum of the South African forest industry. Some 35 participants attended from the major companies, government organisations, forest consultants, land valuers and auditors. Valuations in South Africa have largely been internally focused with limited influence from global trends both in international timberland investment and valuation practice.
Currently, valuation practices are guided by experience and the outcome of court cases. “The Faustmann method” of cost valuation is seen as the de facto valuation method used by timber owners and consultants.
This course provided an opportunity to introduce concepts from international best practice. An overview of current international valuation and accounting standards, roles and responsibilities of valuers, valuation methods and concepts as well as reporting requirements were presented. Theory was complimented with examples and case studies.
The course was very well received by participants and the lack of a local forest valuation standard that could help to direct consistent best practice was raised as a future need in South Africa. Forestry South Africa (FSA), with support from Cori Ham (Stellenbosch), has been asked to begin a process to develop valuation standards appropriate for South Africa. This provides a useful forum for increasing cooperation between South Africa and other Southern Hemisphere producers.
Margules Groome is planning further forestry investment and valuation workshops in the future to stimulate discussions amongst valuation practitioners, forest owners and investors in different parts of the world. The next planned event in support of the Institute of Foresters of Australia (IFA)’s periodic valuation seminar series and is scheduled for early in 2019 (IFA will announce details). Margules Groome’s European office is also at an early stage of planning a similar event to be held either in London or Amsterdam during 2019.