Integrated Planning for the
Forestry and Infrastructure
Sectors in Corrientes, Argentina
Gustavo Braier, Javier Marenco
Braier & Asociados Consultores - www.papyro.com
Luis María Mestres, Jorge Vara
Ministerio de Producción, Trabajo y Turismo, Gobierno
de Corrientes - www.corrientes.gov.ar
ALIO/INFORMS Joint International Meeting - Buenos Aires, June 6-9, 2010
Outline
• Overview of Argentina and Corrientes situation
– Forestry development
– Negotiation issues
• Policy to get a sound provincial development
• Development of a linear programming model to assist
– The planning process
– Model features
• Software application
• Conclusions
2
Overview of Argentina and
Corrientes situation
• Argentina
– It is a developing country
– Most of its population and industrial
production is concentrated in urban centers
– It has high economic and social uncertainty
for forest and industry investors
• Corrientes
– It is one of the poorest provinces in
Argentina
– The public sector is the highest employer
– It lacks basic infrastructure
– It has 420 thousand hectares of fast
growing forest plantations, which means a
continuous supply of 13 MM tons of wood
per year. Supply is increasing.
3
Overview of Argentina and
Corrientes situation
• Forestry development
– Argentina, Brazil, Uruguay and Chile are very efficient
wood producers
– Products coming from forest basins include pulp,
paper, MDF, sawn wood, remanufactured wood,
plywood and energy
• Residues from plantations and industry go to pulp, MDF or
energy
• Without these industries, the other industries are inefficient
– Huge amounts of capital investment are necessary
4
Overview of Argentina and
Corrientes situation
• Negotiation issues
– Argentina and Uruguay have a conflict about a pulp mill
– Environmentalists groups are very active
• Population thinks it is a very pollutant sector and sees government
as unable to control big companies
• Population thinks it does not offer enough labor opportunities
• This is not the case
– There exists a trade off between production and environmental
care
• BATs are the baseline to deal with this issue
– The development of this highly infrastructure-demanding sector
may be related with other sectors’ needs and civil investment
5
Policy to get a sound provincial
development
• Issues
– Forestry sector can change Corrientes province
• Its development can multiply by 3 the Gross Domestic Product in 10
years
• Employment may increase in 120 thousand positions. Economic
active population is 350 thousand. Total is 1 million inhabitants
• Environmental issues can be minimized and controlled. Stronger
government capacities may be necessary.
• Way of working
– Integrated planning issues are not in the public agenda
– Previous work involved several massive meetings without
tracking of tasks and responsibilities
– The most powerful participant may influence in the way of
working
– Key players were not part of the process
6
Policy to get a sound provincial
development
• Proposal
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–
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To create an Executive Committee
To create Work Commissions
To create a VIP Advisor Committee
To create Consulting groups to validate propositions
• Way of working
– Planning as a continuous and interdisciplinary work
– To use mathematical and modeling tools to analyze and to help
to solve misunderstandings and discussions
• Analyze different alternatives
• Analyze shadow prices for principal constraints
7
Development of a linear programming
model – The planning process
• Linear Programming is widely used in forestry issues
• The problem to face exceeds, but includes, forestry
issues
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–
–
–
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Availability of investment capital
Availability of infrastructure to support forest complex
Availability of labor force
Market availability and competition
Social constraints
Interactions among actors (sawmills providing chips to pulp or
MDF plants; pulp mills providing energy to sawmills; generation
of pollutants against social and legal limits)
• Objective: to model the real world maximizing value
added at the regional economy
– Valuation and comprehension of real-world constraints
8
Development of a linear programming
model - Features
• Decisions (annual detail with a 30/50 years horizon)
– Forest to be planted or renewed
• Classified by actors, areas and species
• Quantity (hectares)
• Quality (silvicultural treatments, including pruning)
– Forest to be harvested
• Age
• Different uses
– Industrial production and location
• Productivity varies according with the diameter class
– Market sales
• For example, if total industrial costs, including freight and taxes, are
higher than market prices, the model will suggest not to plant 20
years before, being the planning horizon larger than 20 years.
9
Development of a linear programming
model – Features
Forests
Pulp mills
Energy
MDF Plants
Sawmills
Local market
Chips + pulp
Remanufacturing
10
Linear programming model
• Size of the model depends heavily on the data
incorporated by the user through computational
interface.
• 140.000 variables.
• 120.000 constraints.
• 2.000.000 non-zero elements.
• The model was coded in AMPL, and involves 50 groups
of variables and 89 blocks of constraints.
• Model generation and solution (with Mosek 5 LP solver)
in 15/20 minutes.
11
Software application
• We developed a software tool to manage scenarios,
solve the model, and analyze the results.
• Easiness of use and flexibility were basic conditions.
• Unveil “lp secrets” to manage and analyze scenarios
was a driver.
12
Software application
• Interface to query and analyze shadow prices and
reduced costs.
• Set of pre-solving and post-solving experts to help with
model construction and scenario analyses.
13
Conclusions
• Models can help to the deployment of economic policy.
• Economic and social actors are willing to use these kind
of tools.
• Linear programming is an acceptable technique to deal
with these challenges with enough detail.
• The Province of Corrientes is willing to go in depth with
this way of working, not only with forest areas, but also
with other sectors.
• A further step could be to model together different
sectors regarding Corrientes inhabitants welfare.
14
Integrated Planning for the
Forestry and Infrastructure
Sectors in Corrientes, Argentina
Gustavo Braier, Javier Marenco
Braier & Asociados Consultores - www.papyro.com
Luis María Mestres, Jorge Vara
Ministerio de Producción, Trabajo y Turismo, Gobierno
de Corrientes - www.corrientes.gov.ar
ALIO/INFORMS Joint International Meeting - Buenos Aires, June 6-9, 2010