iPaulownia - Investors in paulownia


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iPaulownia offers investments opportunities in paulownia timber production plantations, the fastest growing hardwood on the planet. Light but immensely strong, Paulownia has unique market advantage. A highly profitable investment.

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iPaulownia - Investors in paulownia

  1. 1. i n v e s t o r s i n p a u l o w n i a www.ipaulownia.com
  2. 2. Contents 01 p Introduction Our story is all about paulownia timber production and the exciting opportunities available to investors. Paulownia Ltd is a European forestry investment management company specialising in paulownia timber plantations. Based in London with administrative and operational offices in both UK and Spain, we provide managed paulownia timber investments. Plantations under development include our own €4M paulownia project in the region of Albacete, Spain and further major projects across Europe within our investment community. i n v e s t o r s i n p a u l o w n i a www.ipaulownia.com Paulownia Ltd was created to exploit market demand for timber. With an expert team of agricultural, energy, environmental and forestry professionals, European leaders and pioneers in paulownia timber plantations across Europe, we offer an unrivalled support framework for our paulownia plantation projects. Together, we are driving towards our main objective of supplying demand for paulownia, a timber variety with unique characteristics. Timber demand far exceeds supply in countries like Spain with the deficit made up by imports. With such favourable market conditions we are highly focussed on generating increased paulownia timber production and exploiting these exciting market opportunities. Together with our investors we seek to mutually benefit from this new and fast growing timber supply chain. So what do we offer an investor? We offer new or mature, professionally man- aged paulownia plantations. We facilitate timber investment in a flexible way. We source land and provide a complete management service including land prepara- tion, irrigation, planting and full care of the plantation through to cropping and delivery to timber processors. The investor can select a plan to suite their appetite: the size of the plantation; number of trees; duration of investment and whether to buy or rent the land. 01 Introduction 02 Why join us 03 Why paulownia? 04 The demand 05 Project location 06 Project management 07 Forecast & fees 09 The next step 10 Contact us
  3. 3. Whyjoinus 02 p 02 p 02 Someone’s sitting in the shade today because someone planted a tree a long time ago. Warren Buffett i n v e s t o r s i n p a u l o w n i a We are inviting investors to become involved with this fantastic opportunity with assured returns and believe our products will appeal to a wide range of clients from individual investors to substantial funds. Key to our strategy is our European Paulownia Network™ of partners and associates in the paulownia market. With clear evidence of successful paulownia production across many plantations we demonstrate a proven track record. We have invested our own funds in paulownia plantations and together with our Network comprise the most reliable and largest source of paulownia timber plantations in Europe. Although paulownia grows in many areas around the world not all paulownia is the same or suitable for every set of environmental conditions. Our biological and agroscience advisors have successfully produced and patented a trademark protected variety, 8 years in development, which by far outperforms any other paulownia variety that grows within our European weather and climate conditions. Our patented paulownia clone is cultivated for excellent timber quality to enhance its value as a quality timber investment. To further improve value and guarantee provenance our paulownia is uniquely to be certificated with a Quality Timber Certificate (QWF) regulated by the European Union Ministry of Agriculture. We have a fast growing, superior quality paulownia variety that will command premium prices in the marketplace and maximise a profitable exit strategy.
  4. 4. Whypaulownia 03 p WHY PAULOWNIA Paulownia is, by far, the fastest growing hardwood on the planet. Our high performance patented paulownia variety together with carefully selected project locations and outstanding professional technical management can deliver 1m3 of timber within 8 to 10 years. This unrivalled growth speed builds timber volume far in excess of other tree types which can take 25 years or more to achieve the same volume. Paulownia has a unique set of characteristics. It is extremely light, strong, flexible, a very good insulator, has high temperature resistance and its combustion temperature is almost double that of many conventional hard and soft woods. It’s not surprising that paulownia is known as the aluminium of the timber world. Paulownia timber’s demand across Europe, Africa and Middle East arises from many of these outstanding characteristics. Applications such as building materials, windows, doors, blinds, architrave, furniture, aircraft fittings, boats, musical instruments and sport equipments are some of the most common and best performing paulownia timber uses. It’s also an ideal substitute for MDF and fibre glass which are recognised as pollutants with long decomposition time. All of this, plus the fact that paulownia timber can be delivered within 10 years, makes it an ideal variety for processors and manufacturers to plan product for. i n v e s t o r s i n p a u l o w n i a www.ipaulownia.com
  5. 5. Thedemand 04 p 04 p 04 In one year you have a pole, in two years you have an umbrella and in five years you have sawn lumber 10th Century i n v e s t o r s i n p a u l o w n i a During the past few years the paulownia initiative has been building, studying, testing and experimenting with innovative new products through the good work of members of the European Paulownia Network™ including research institutions, universities and some of the largest timber merchants within the European timber marketplace. All agree that paulownia timber has great advantages not just to supply common timber products but to outperform and innovate due to quick growth, strength, light weight and high temperature resistance. One of these exciting new products is epitomised by the world renowned ski brand, Rossignol’s Soul7 skies, incorporating a lightweight paulownia core which reduced weight by 20% for easier touring, enhanced agility and ultra-light swing weight. It was ISPO awarded as 2013 best and most innovative new product being introduced around the world. There is strong demand from the skiing, water sports and marine industries for paulowna timber. Other examples include building bricks made of 60% paulownia powder resulting in reduced brick weight and a significant reduction in transport costs. Amazing new applications are being developed using bactericidal nanoparticle coverings to make paulownia based, lightweight, bacteria resistant furniture for the kitchen industry and bacteria prevalent areas such as hospitals and nurseries. These are just a few reasons why it is our mission to supply and develop the lucrative and interesting potential of paulownia timber.
  6. 6. Projectlocation 05 p 05 p 05 i n v e s t o r s i n p a u l o w n i a We have chosen Spain as the key country for our paulownia plantation development strategy to take advantage of its favourable timber market conditions but also because it so well located to meet demands from its North African neighbours. Spain currently consumes double the amount of its indigenous timber production. It produces 15M m3 per year which represents 1% of global production in spite of having extensive forestation, much of which is protected or under-developed for timber production. Since 2012, a Spanish national action plan to reduce timber importation by 33% by 2030 has been put into action. The objective is to increase timber production to 50M m3 by 2050 and reduce importation to less than 20% of the national demand. Not only Spain has large timber production deficits, neighbouring countries such as those in North Africa and further away in the Middle East import nearly 100% of their timber. With major ports, such as Valencia and Algeciras, we have economically viable transport routes into these markets. For Paulownia Ltd, the opportunity to supply local and neighbouring demand is a massive attraction and, consequently, a major imperative to expansion of our production capacity. This favourable market situation along with the exceptional year round climate conditions, ideal plantation locations and first class rail, road and sea transport facilities are the reasons we selected Spain to be our business hub.
  7. 7. ProjectManagement 06 p 06 p 06 Give me six hours to chop down a tree and I will spend the first four sharpening the axe Abraham Lincoln i n v e s t o r s i n p a u l o w n i a All of our timber plantations are carefully managed, controlled and supervised by an expert technical team of agro scientist advisors, biologists and forestry professionals with many years of experience. In addition to successfully establishing more than 500 hectares of paulownia plantation in Spain, Romania, Italy and South America, they have managed and been directly responsible for thousands of hectares of vineyards, almonds, olives and many other agricultural projects over the last 30 years. For an annual fee, we manage the entire production cycle from supplying the paulownias to the future sale of the timber, including land preparation, installing irrigation systems, planting, fertilising, watering, pruning, cutting and delivering the timber to the market. Looking after a paulownia plantation requires regular and continuous attention to maximise performance. We work closely with local town halls who are keen on what they view as important local contributions to their economy, employment and land usage. We employ and train local labour and also subcontract to professional service providers to provide maintenance and installation services under our instruction and supervision. At anytime, investors are welcome to visit their plantation to be guided through the progress and updated with latest achievements. Plantation progress reports are provided on a quarterly basis and we encourage a friendly regular dialogue to maintain a continuing project involvement.
  8. 8. Plantation Key Financial Elements Standard Calculation Area 1 Hectare Nº trees 600 600 trees /Ha Initial Reservation Fee* € 4,000 € 4,000/Ha Initial Investment** € 12,000 €12,000/Ha Total 1st year Investment € 16,000 Annual Fees*** € 36,000 € 4,000/Ha /Year Total Investment € 52,000 10 years (1st year + 9) Cropping Cost**** € 36,000 € 60 / tree Sale of Timber € 168,000 1 tree= 0.7m3 @ €400/ m3 INVESTMENT RETURN € 132,000 Forecast&Fees 07 p Investment One hectare of paulownia plantation is planted with 600 paulownia trees. A paulownia tree produces about 1m3 of tree and 0.7m3 of usable timber within 8-10 years which totals 420m3 of usable timber per hectare The current market value for paulownia in countries like Australia and China for first quality timber has exceeded $1,500 per m3. In Europe, imported paulownia timber is being bought for over €500 per m3. These values should ensure that our quality stamped, trademarked, paulownia timber estimate of €400 per m3 is a reasonable and safe forecast. i n v e s t o r s i n p a u l o w n i a www.ipaulownia.com Plantation example paulownia Internal rate of return over 10 years - 16.4% Internal rate of return inflated @ 7% after 10 years - 24.7% *Initial Reservation Fee: Paulownia Ltd will organise paulownia plants, local labour and land preparation. **Initial investment: This covers land preparation, planting process and first year plantation management. ***Annual Fees: €4,000 per year per hectare are paid towards plantation man- agement: labour, fertilisers, water, herbicides, insecticides and technical direction etc. **** Cropping Cost: The tree is now ready to be harvested. This cost will be de - ducted from the sale of the tree. With timber sales prices being €400
  9. 9. Forecast&Fees 08 p 08 p 08 Money doesn’t grow on trees. Unless, that is, you are in the timber business... Financial Timesi n v e s t o r s i n p a u l o w n i a We, at Paulownia Ltd, believe it is reasonable to consider a conservative 5% growth per annum from today’s market value for paulownia timber within the next 10 years.  Our Investment Plans show the Internal Rate of Return if timber prices remained flat at today’s values and what would happen if all values increased at 7% per annum. Investors should make their own judgements. *Performance Fee: A performance fee of 20% will apply to the net profit on sales greater than the estimated sales price agreed at the time of contract. Cash flow for 10 yr growth cycle - rental (10 hectare plantation) Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Outcome Investment 160,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 Revenue 0 0 0 0 0 0 0 0 0 0 1,320,000 Cashflow -160,000 -200,000 -240,000 -280,000 -320,000 -360,000 -400,000 -440,000 -480,000 -520,000
  10. 10. Nextstep 09 p The next step BOOK A VISIT TO OUR PAULOWNIA PLANTATIONS. Don’t take it for granted, come and view it for yourself! We encourage timber investors to come and view the entire paulownia operation for themselves. We can organise group tours as well as independent visits to our plantations and support infrastructure. A typical tour consists of 2-3 days and includes collection at Valencia Airport and complimentary transfer to your hotel followed by: Visit to the laboratory See the birth of a paulownia tree! You will be shown around the largest in vitro cultivation laboratory in Spain and second largest in Europe, explaining the micro-propagation process, viewing how paulownia clones are multiplied, understanding the step by step process of each clone prior to planting. A fantastic learning experience! Plantation Tours After learning how our paulownia clones are carefully created and multiplied, we will take you through a number of plantations with different age ranges to help you understand paulownia’s growing cycle. We will also show you available plantations and tailor made investment opportunities that would match your timber investment requirements. Understanding the entire Business Cycle During your visit we will take you to the saw mills that process paulownia timber, listen to their experience with the quality of our paulownia timber and provide an insight into the wide variety of applications and products for which paulownia is suitable. We will show you some examples of these products. This will bring to life the entire cycle of the paulownia investment business.   Detailed investment explanation and legal purchase procedure We will allocate some time during your visit to explain the benefits of timber investment, work out some numbers for you and introduce you to legal expertise to explain the investment process.  This will also allow you to decide whether it is better for you set up a Spanish company or invest as an individual to maximise your investment potential. i n v e s t o r s i n p a u l o w n i a www.ipaulownia.com
  11. 11. Contactus 10 p Timber has risen steadily in price for 200 years and has returned an average of 6,5% a year for the last century Jeremy Grantham i n v e s t o r s i n p a u l o w n i a Join us on this exciting venture and see for yourself the timber investment opportunities available.  Learn about paulownia and its unique timber qualities by visiting us during a long weekend. It will be a full weekend’s learning experience but led in a friendly and relaxed way without pressure. You will not regret it! +44 (0)203 2827178 helpme@ipaulownia.com Paulownia Ltd Omnibus Business Centre 42 North Road London N7 9DP
  12. 12. www.ipaulownia.com©2013Paulownialtd i n v e s t o r s i n p a u l o w n i a
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