Ef Brochure11


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Ethical Forestry

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Ef Brochure11

  1. 1. “Every year about 13 million hectares of the world’s forests are lost due to deforestation – that’s a football pitch every second…” The Food and Agriculture Organisation. (FAO) Timber Investment. Investing in timber is not a new concept. In fact, it’s one of the most consistently high performing commodities of the last 100 years. Become part of the resource revolution by owning your own previously needed at least a small one to begin with. Not any tropical hardwoods. more, with Ethical Forestry investments start from as little as £12,000. World consumption of tropical hardwoods has multiplied nearly 25 times in just the last four decades, to more than 100 Ethical Forestry is a UK based brokerage setup to offer a unique billion board feet each year driving prices higher and higher. investment that previously has only been available to large financial institutions. Hardwood investing is not a new concept. Bloomberg Wealth We strive to meet the financial and ethical aspirations of our management states “…hardwood has quietly and consistently customers by planting and harvesting “trees for profit” and out performed nearly all other commodities for the past 100 “permanent reforestation.” years…” However to make a large fortune from plantations you Sustainable forestry, properly managed as a selectable and stable investment is more profitable than short term forestry destruction. Not only will your plantations secure you a very healthy return, but you will also be directly responsible for reducing the demand placed on our natural rainforests and increasing the size of the rainforests in Costa Rica. We only select areas suitable for planting on previously deforested land. 2
  2. 2. “World consumption of industrial wood is predicted to rise 60% over the next 25 years…” The UN Food and Agriculture Organisation How it works for you. It’s simple: Your trees grow in size and so does your investment. If you were to invest £12,000 in Teak - your projected returns could be in excess of £140,000 over 25 years. If you were to invest £12,000 in Formaleta - your projected returns could be in excess of £84,000 over 12 years. For more information - please have a look at the enclosed projection sheets or contact your broker. Once we have received your order, the nurseries are notified You can choose to follow the recommended course of action and reservations are made until field planting. or make your own decision on how many trees to harvest. Field planting is performed by our resident foresters under After a few years (depending on species chosen) your trees will expert guidance following all the latest silviculture practices. need thinning. (Thinning is the process of harvesting the weaker trees to allow the healthier, stronger and straighter trees When your trees are established (after 6 months) you will more room to grow) receive a property lease and title document detailing the position, species and number of trees owned. You have full You can have us, or anyone else you choose harvest and/or ownership of your trees, as well as a full property lease on the manage your trees for you. If you have us manage you trees, land. This ensures your investment is safe and protected. your chosen trees are then harvested, processed and the timber sold. Once a year you will receive a foresters report detailing the growth and condition of your trees. You will also receive advice The proceeds from the sale are then sent to you, minus our from the foresters on any action that needs to be taken. harvest and management fees show in the projections. 3
  3. 3. “The track record of early investors – and a slew of recent academic research – indicate that timber is a near-perfect asset…” SmartMoney Magazine. Why Invest in Timber? Simple - Supply and Demand. Supply – Every available statistic tells us that the world’s tropical Demand – The demand for tropical timber is increasing at an rainforests are being rapidly destroyed. unsustainable rate. • Most of our timber is sold on the Costa Rican timber market. • World consumption of tropical hardwoods has multiplied Costa Rica has recently had to begin importing hardwood due nearly 25 times in just the last four decades, to more than 100 to a deficit in available timber. It has been estimated by the ONF billion board feet each year. (Costa Rican National Forestry Office) and the National Forestry • According to the ONF (Costa Rican National Forestry Office), Financing fund that by the year 2010 there will be a shortage of teak prices have gone up 15% per annum between 2002 - 2007 some 80% of required timber further driving prices up. with 2007 prices increasing by a staggering 67% due to the • Teak, in particular is becoming increasingly difficult to source, deficit. Myanmar (formerly Burma) is currently one of the world’s largest • Less than 1% of the world’s demand for tropical hardwoods exporters of Teak. However, the U.S. Senate recently passed an can be supplied by sustainable plantation forestry. The vast act forbidding the import of timber from Myanmar, further majority still comes from the natural rainforests and with more reducing the availability of Teak. and more countries clamping down on illegal logging the • The Food and Agriculture Organisation (FAO) estimates that availability of Tropical Hardwood is in rapid decline, driving each year about 13 million hectares of the world’s forests are prices up. lost due to deforestation. From 2000 to 2005, the net forest loss was 125 square miles per day. What if I need to cash-in my investment early? Simple - You are in complete control. There are two methods that can be used, should you need to cash-in your investment early. • Sell your investment as an appreciating asset. - In this instance you would be selling your remaining trees to another investor. The market for mature hardwood trees is very strong as the trees are that much nearer to harvest. You are more likely to get higher returns choosing this option than to harvest your trees. • Harvest your trees. - You are free to harvest some or all of your trees at any time you choose. If you wish us to harvest your trees early, simply inform us of your requirements and we will take the necessary action. 4
  4. 4. “Timber has been the only asset class in existence that has risen in three out of the four market collapses of the 20th century.” SmartMoney Magazine. What Species can I grow? We grow a wide range of tropical timbers. Teak - (tectona grandis) is a highly sought after tropical hardwood that grows in a narrow band around the equator. Traditionally used for boats and outdoor furniture, this luxuriant hardwood is resistant to water, weather and warping, allowing it to withstand season after season of use with no need for winter storage. Because of its longevity, durability, and low maintenance, Teak furniture is heralded as a symbol of luxury and affluence. Teak is also widely used for: marinas, construction, hotels, spas & hot tubs, swimming pools, restaurants & bars. Teak trees have one of the highest rates of carbon sequestration. This is the process of removing carbon from the atmosphere thus helping to reduce your carbon footprint. Formaleta - (Formwork) The one exception to the rule, a softwood. Incredibly fast growing and in high demand. Used in construction the world over for concrete forms and other basic requirements. Due to it’s growth rate this timber can be grown over a 12 year period, with harvests normally due after 3 years and every year thereafter. Acacia - This timber is used for furniture, cabinets, turning and floors. It is also suitable for particleboard, plywood, veneer, pulp, fence posts, firewood and charcoal. Non-timber uses include honey production, adhesives and as an ornamental and shade tree for roadsides or other urban forestry uses. Acacia is an important multipurpose tree for the tropic lowlands. Acacia is one of the major fast-growing species used in plantation forestry programs throughout Asia, the Pacific, and the humid tropics. Due to its rapid growth and tolerance of very poor soils, Acacia is playing an increasingly important role in efforts to sustain a commercial supply of tree products while reducing pressure on natural forest ecosystems. Native Species - This is a mix of various local species such as Cocobolo, Sable, Acacia, Mahogany, Spanish Cedar, Purple Heart and many others. By including various species in your planting you gain access to hardwoods, so valuable, they are sold by the ounce. Mahogany and Cocobolo for instance are almost unavailable to buy by the board foot. “Indeed, as an asset class, timber – a renewable resource with constant product demand – stands out as a remarkably stable investment.” Bloomberg Wealth Manager 5
  5. 5. “If a cure for cancer or AIDS is to be found, it will almost certainly come from the tropical rainforests.” savetherainforest. How safe is my investment? The security of your investment is of paramount importance. We have endeavoured to make owning your own plantation as secure as possible by: • • You receiving a full 25 year non-rescindable lease on the Using our wealth of experience in plantation and land your trees are planted on. forestry management. • • You receiving full title to your trees with GPS co-ordinates Utilising Costa Rica’s Privacy and Forestry Laws which allow and plantation locations. you to own a crop independent of the land on which it is planted, although you also will have a property lease on • Planting your trees in a country that has a stable democratic the land. government, that actively encourages forestry investment • by passing special laws to protect investors. (Forestry Law Employing resident foresters who live in close proximity to #7575.) The World Bank has given Costa Rica an excellent your land to help monitor and protect it. bill of overall political and economic health. At its annual • conference in El Salvador, the Bank lauded the country as Using very conservative independent figures in our possessing “one of the most stable and robust” democracies. projections to ensure we meet your expectations. With seaports on both the Atlantic and Pacific coasts, Costa • Rica has good shipping access to the markets of Europe, Ensuring trees are only assigned once they are 6 months old. Japan, as well as North America. Our tree farms are about This reduces any risk of trees being lost during field planting. 1 hour north of La Fortuna. We chose Costa Rica as the • location for our tree farm investments because it has had a Having our growth rates certified by a MINAE ( (Ministry of stable democracy for more than 100 years, and its constitution Environment and Energy) registered forestry consultant. and laws guarantee private property rights for both Costa • Ricans and non-Costa Ricans alike. Costa Rica also has a Our guarantee to replace any trees that die, for whatever prospering economy with modern services. reasons, during the first year after field planting. “The track record of early investors – and a slew of recent academic research indicates that timber is a near perfect asset.” Smart Money Magazine 6
  6. 6. Fact: Our growth rates are independently verified by Costa Rican Ministry of Environment and Energy (MINAE) registered foresters. Frequently asked questions Can my trees be uniquely identified in the field? Why can it take 6 months to get my lease and ownership documents? Yes. Your trees are individually marked on your land. To ensure you receive 200 six month old trees per unit. How do you choose where to plant your trees? This reduces any losses that may occur during field planting. Before buying any new land, soil reports and bore-hole tests How politically stable is Costa Rica? are taken by qualified professionals and the results studied to see the suitability of the soil for the trees we are planting. The World Bank has given Costa Rica an excellent bill of overall political and economic health. At its annual conference in Who owns the trees? El Salvador, the bank lauded the country as possessing “one As the tree owner, you do. of the most stable and robust” democracies in Latin America. What reports will I receive? It went on to praise Costa Rica’s “healthy economic growth After your trees are planted and marked in the field, we will rate” and “some of the best social indicators” on the continent. send you your certificate showing the quantity, species, field, One thing that adds tremendously to Costa Rica’s stability is farm, row and year of planting of your trees. Once a year, its lack of an army. Back in 1948, the country abolished their you will receive a foresters report detailing the growth of military in favour of spending on universal health care. your trees with any appropriate, individual recommendations Does Costa Rica suffer from hurricanes? that need to be taken. You will then decide when and how Hurricanes have occasionally hit the Caribbean coast of many trees you wish to harvest. After each harvest you will Costa Rica; however, our plantations are over 80 kilometres receive a record of the number of trees harvested, the inland. According to records, no hurricane has ever struck processing and management fees taken and your net proceeds. this area. Can I see my trees? Are forest fires a problem? Yes, you are welcome to come and see your trees at any time. Forest fires are not normally a problem in the humid tropics due Please contact us for more information. to the moisture content in the air. (Teak is very resistant to fire. Is there a minimum order? Trees over 4–6 metres high are not normally damaged by Yes, please speak to your advisor before ordering moderate forest fires.) Appropriate measures are taken to prevent forest fire; weeds and vegetation on ground level are When are the trees planted? removed before the dry season, firebreaks are built between Normally early June to September, (once the rains are fields and 24 hour surveillance is provided by our resident more regular). foresters. When will the first harvest be? Is flooding a problem? The first commercial harvest is normally in the 5–7th year after Flash flooding from storms may occasionally occur, but is not field-planting, but will depend on the growth and species of generally detrimental to the growth of the trees. Your trees are your trees as well as your own personal preference. Formaleta not planted in areas susceptible to long term flooding. is a faster growing timber with it’s first commercial harvest after just 3 years. Will too many plantations reduce the value of the hardwood? Can I redeem my investment? Plantations today produce less than 1% of the tropical hardwoods Yes – you can sell or transfer your trees (as an appreciating asset) consumed in the world. Every year 50 million acres of rainforest at any time to whomever you choose. You can also choose to are felled. It is unlikely that enough plantations can ever be harvest your trees whenever you wish. As we are constantly in established to hardwood prices from spiralling out of control. contact with tree owners and others interested in owning trees, we may be able to help find a buyer for your trees. Are there any diseases to be aware of? There are no known problems with pests or disease within Are you cutting down existing forests to plant trees? Teak generally. However, be reassured that your trees are No. We plant trees only in areas which have been previously constantly monitored and any appropriate action would be deforested - primarily former pasture land. We are carefully taken quickly. preserving existing natural rainforest on our plantations. 7
  7. 7. “Indeed, as an asset class, timber – a renewable resource with constant product demand – stands out as a remarkably stable investment.” Bloomberg Wealth Manager “The track record of early investors – and a slew of recent academic research indicates that timber is a near perfect asset.” Smart Money Magazine ETHICAL FORESTRY LTD. Head Office If a cure for cancer or AIDS is to be found, it’ll almost Bristol and West House, Post Office Road, certainly come from the tropical rainforests. Bournemouth, Savetherainforest Dorset. BH1 1BL “Average annual returns on timber… Tel: 0800 075 3010 Fax: 01202 366913 have outstripped those from leading global stock indices, property, oil and gold for the past decade.” Email: enquiries@ethicalforestry.com The Economist Magazine www.ethicalforestry.com Rev 4.0a