Agarwood investment-brochure


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Agarwood investment-brochure

  3. 3. YOUR PERFECTINV E ST M E N TForestry investment is an accepted asset class and provenmeans by which institutions and private individuals can seeksubstantial return on their investments.A growing number of high networth individuals are shoring up their portfolios withinvestments in forestry sector in an effort to take the sting from losses in moretraditional assets as the financial crisis trundles on.Value investors have sought out the most liquid investment products since the2008-9 financial crisis, when many were trapped in investments they couldnot sell, some see longer-term buys like forests as potential safe investment.Given the recent volatility in global stock markets, investors are currentlylooking towards commodities for security. The forest investment offers the idealdiversification from investment in real estate and equity portfolios, providing anon-volatile market with high long-term returns and a low risk to return ratio. 2 PART OF THE TREEDOM GROUP
  4. 4. WHY AQUILARIA ? “The pure Oud oil from aquilaria is known as liquid gold is widely used in luxury perfumes” Agarwood – also known as eaglewood, gaharu, aloeswood - is a resinous, fragrant and highly valuable heartwood produced by the species aquilaria malaccensis. The trees are large evergreens native to South East Asia. They grow in a wide range of soils and mature very quickly, producing flowers and seeds as early as 4 years old. Agarwood has a widespread and varied use going back thousands of years including for incense and medicinal purposes. Its pure resin in its distilled form goes into perfume, a use which has been recorded in the New Testament and it is known as the “Wood of the Gods.” The oil in its purest form is called oud oil. Known as liquid gold it is used in the more expensive perfumes such as those by Tom Ford, Lacoste, Versace Yves St Laurent. Today agarwood is recognised as the most precious wood in the world with an extremely high value and can bring as much as £5,000 per kilo of wood chip and even more for top quality oil and resinous wood. “Currently the demand for agarwood far exceeds the available supply which is naturally restricted as it is only formed natually in a small percentage of aquilaria trees. The fragrant resin that permeates the heartwood is produced as a response to wounding or a fungal infection which, in the wild, can take up to 100 years to form. However when grown commercially using our recently developed patented innoculation process to instigate the fungal infection it can reach maturity at approximately 6 years. Agarwood is a precious resinous wood forming in Aquilaria trees, native to the Southeast Asia region. The dark resin is formed as an antibody for healing after injury or fungus infection. The agarwood is widely used in perfume and cosmetic industry, and religious activities. Agarwood trees are registered as an endangered species by CITES due to its precious value, causing illegal wood smug- gling. AFM is supporting the regeneration of this species from its managed plantations. Thailand has been recognized worldwide as a source of premium quality agarwood; however, most of cureent agarwood supply is derived from the wild cutting due to illegal logging. In respect of tree conservation, the concept of Aquilaria plantations was initially developed in Thailand, with inoculation techniques, capable of providing premium quality agarwood comparable to the natural source.3 PART OF THE TREEDOM GROUP
  5. 5. WHY FORESTRY INVESTMENTFROM ASIA FORESTRY?Managed forestry plantations are one of the world’s most Some of our forestry investments have guaranteed returns,stable and most consistently profitable investments. Trees maximizing your investing power and eliminating not worry about political changes or downturns inindustry sectors. Trees just grow. and Asia Forestry has a Without compromising your investment returns, you alsoway to make this work profitably for you. become part of the socially responsible leaders who are working to improve our world for now and the future.The worldwide demand for timber is expected to increase With Asia Forestry, you are helping to create sustainable,significantly over the next decade. Thanks to the surging environmentally friendly investment which will profit you,timber prices and generous tax breaks, trees are becoming and help us all.more and more valuable every day. Especially those treesraised in managed plantations where the trees are felledlegally.Asia Forestry has positioned itself as a key supplier oftimber and forestry products to international markets - andis in the perfect place to offer contemporary forestryinvestment vehicles to the public. We enable you topurchase trees raised for you in plantations, and harvestedor resold at very profitable rates.Asia Forestry’s commitment is on security. We offerincredible security through a variety of different protectionmeasures, keeping your money safe and generating highpercentage yields. 4 PART OF THE TREEDOM GROUP
  6. 6. ABOUT ASIA FORESTRY The Asia Forestry Group is engaged in forestry management in Thailand. The group is focusing on Aquilaria plantations and distillation divided into 2 key business units, Asia Forestry Management Co., Ltd. and Asia Forestry Distillery Co., Ltd., ASIA FORESTRY MANAGEMENT (‘AFM’) Plantation Management specialists focusing on Aquilaria tree species.The fastest growing forestry management company in South East Asia with 59 plantations in management and planning, AFM’s expertise in producing high quality trees for harvesting for their luxury aromatic oil is unrivalled. ASIA FORESTRY DISTILLERY (‘AFD’) The leading luxury aromatic oil and high value woodchip manufacturer and distributor in Middle East and Europe. Oil and woodchip is derived from Aquilaria tree species.The AFD manufacturing facility boasts ‘traditional’ distilling methods as well as future complementary plans to add the latest distilling technology. Robust best practice QA procedures ensure that high-end quality products are delivered – every time. Products are CITES certified for worldwide distribution. Market demand dictates a requirement to supply, guaranteed volume levels of consistently high quality products. Sourcing its raw material supply from our managed plantations, AFM & AFD together have gained a their competitive advantage via its guaranteed production and distribution by controlling the complete value chain from raw material creation and supply to end-product. Asia Forestry is currently in an expansion phase and will in 2012 have the largest Oud oil manufacturing facility in Thailand and the first factory in the industry to attain ISO-9001 accreditation with plans to expand further in 2013 to become South East Asia’s largest producer of Oud Oil Recent significant certifications include a recognised ‘Worldwide Islamic Halal Accreditations Certificate’ – providing another competitive advantage over our competitors in accessing Islamic-based markets.5 AgarwoodtreeafterC.AKitinocu PART OF THE TREEDOM GROUP
  7. 7. culation 6 PART OF THE TREEDOM GROUP
  9. 9. INVESTMENT PLANAG2 6 Years Investment Number of Initial Investment Return Profit Profit (%) Trees THB USD THB USD THB USD 35 130,200 4,131 227,500 7,218 97,300 3,087 74.73 50 185,800 5,895 325,000 10,311 139,200 4,417 74.92 100 365,600 11,599 650,000 20,622 284,400 9,023 77.79 200 715,300 22,694 1,3000,000 41,244 584,700 18,551 81.74 400 1,394,600 44,245 2,600,000 82,488 1,205,400 38,243 86.43 800 2,699,300 85,638 5,200,000 164,975 2,500,700 79,337 92.64 1,000 3,260,700 103,449 6,500,000 206,219 3,239,300 102,770 99.34AG3 6 Years Investment with the first return in 3 rd year Number Initial Investment Return in 3 Year Return in 6 Year Total Return Profit of Trees THB USD THB USD THB USD THB USD THB USD 30 131,280 4,165 51,000 1,619 156,000 4,950 207,000 6,569 75,720 2,403 60 262,368 8,324 102,000 3,237 312,000 9,899 414,000 13,136 151,632 4,811 100 432,480 13,721 170,000 5,394 520,000 16,498 690,000 21,892 257,520 8,171 200 852,240 27,039 340,000 10,787 1,040,000 32,995 1,380,000 43,782 527,760 16,744 400 1,675,680 53,163 680,000 21,574 2,080,000 65,990 2,760,000 87,564 1,084,320 34,402 800 3,279,440 104,044 1,360,000 43,148 4,160,000 131,980 5,520,000 175,128 2,240,560 71,084 1,000 4,008,560 127,176 1,700,000 53,935 5,200,000 164,975 6,900,000 218,910 2,891,440 91,734 8 PART OF THE TREEDOM GROUP
  10. 10. FREQUENTLY ASKED QUESTIONS 1. What is Asia forestry’s background and its performance track record? Asia Forestry is a fairly new company formed in 2006 with directors who have long history in managed forestry and forestry investment. However, the underlying investment is established with large organizations and co-operatives that have been established since 2003 having assets in excess of US$10,000,000. 2. What is the management fee structure? How are the managers of the fund rewarded, by performance? Is there any front end or back end loading? All management, administration and maintenance fees are included upfront in the initial purchase price, therefore on ongoing maintenance fees. 3. What regulation covers the investment? Asia Forestry offers a managed investment scheme backed by a company guarantee and is not governed by any securities act. 4. Who will manage my investment? Asia Forestry Management is responsible for all aspects of project management including, but not limited to, engaging forest contractors and supervising their work as well as providing administration, financial and business management, based on their extensive experience in this industry 5. What is the nature of the fund, open-ended or a closed fund? Is it quoted (or listed)? This is not a traditional unit trust/mutual fund. With Asia Forestry, we enable you to purchase the trees directly, and they are then held until maturity. 6. Can I redeem my holdings early? We are unable to offer early redemption. However, we will try and find a purchaser for your holdings; this is done via secondary market placement, so may take some time and will affect your returns. 7. Am I liable for debts of other investors in the project? No. This is not a shared investment scheme of any kind. Our investment projects are carefully designed to avoid such risks. It is our practice to fully fund the requirements of each individual project early in its life, so all early expenditures and taken care of, as well as having sufficient funds on hand to meet ongoing administrative and maintenance costs. No ongoing capital contributions will be required from investors when projects are fully funded in this manner.9 PART OF THE TREEDOM GROUP
  11. 11. 8. Are your plantations certified as sustainable by an independent body such as the ForestryStewardship Council (FSC)?The FSC is a body which pertains only to timber products. For our upcoming Teak plantations, wewill be abiding by the rules set up by the FSC. For the Agar investments, the production and saleof the investment are based on the oil, which is a Non-Forestry Timber Product (NFTP), and arenot viable for the FSC certification, however the company aims to abide by FSC principles.9. Is the fund insured for flood, theft and fire?Agar grows much better on hillsides and slopes, and all of our plantations are located in non-floodareas. The assets are protected with physical security as well as monitored by our forestry teamsacting as fire prevention wardens. We also ensure fire breaks are maintained and cleared toreduce the risk of fire.If any of your trees die unexpectedly, we do have reserve stock waiting to replace your tree. Thisis an added area of protection to support your investment.Should you require additional insurance please contact us directly.10. What about pests and diseases?The main species in Thailand, Aquilaria, is a remarkably healthy species. It was selected from arange of exotic trees as being the most suitable for the micro climatic environment it requires.Generally, forest health is not a major risk issue. Of course, there is risk from imported pests andThailand, as are all countries, is dependent on its border protection services to intercept these.In the case of our short term investments, the trees have reached semi maturity and therefore passedthrough the mortality risk stage.11. Do I own the land?In most cases Asia Forestry holds the freehold/leasehold of the land and will return it to theco-operative after harvest and repayment. However for large investors the lease/freehold may beassigned directly to the client; please contact us directly for more details.12. Why should I invest in forestry?Our answer to this is distributed throughout our website and brochures, and we encourage you toread more to understand this powerful investment option.Forestry is an investment that requires little or no active management, but continues to grow andincrease in value throughout its life. It is a very low risk investment that balances more potentiallyvolatile investments in your portfolio like shares, bonds and property. This low risk investment canoffer high returns over short and long periods; you can see from history that forestry investmentsare generally protection from inflation and a hedge against downturns in the stock market.Stock markets don’t affect trees, nor do changes in the law. For example, here in Thailand therehave been many changes in the laws recently - making it harder for foreign investors to purchaseproperties. If this legal trend persists, combined with the large amount of construction currently inprocess, the price of real estate will drop even more. In another example, the real estate market inthe US was very profitable not so long ago, and now most would be looking elsewhere to invest 10their money. Invest in our forestry investment products, and you are protected from these kind PART OF THE TREEDOM GROUP
  12. 12. unforeseen challenges. Forestry has long been looked at as a hedge against fluctuating stock prices. Some of your investors will certainly like this characteristic. This is one of the most powerful selling tools of forestry. Regardless of the vehicle, history has proven that you are almost guaranteed to make a profit. 14. What is the minimum/maximum age to invest? Am I too old? Typically, the minimum age is 18, although you can purchase on behalf of a minor. There is no maximum age to invest in forestry investments. Our forestry vehicles range from 2 years to 20 years, which makes them a candidate for people of all ages, and can be used to produce lump sum or income returns. Forestry is also a great way to fund for your children’s or grandchildren’s future, by purchasing an asset which will consistently grow in value as they get older. 15. Is the world oversupplied with wood? The market outlook for timber from Asia is extremely positive. Global supply is determined by factors such as log price, proximity to transport infrastructure and a government’s environmental policies; the actual growth of trees is not as relevant. Asia is in an excellent position as a low cost producer, with forests grown in an environmentally sustainable manner close to shipping ports. It can therefore continue to supply logs profitably when other countries cannot afford to do so. Asia needs to continue to develop its markets and its processing industry so that it can get the maximum return from its forests. 16. What are the risks in forestry investment? With forestry investments, there are always the risks of fire, storm damage, pest and disease. However, because the plantations are managed with physical security and forestry wardens, these risks are very low. The trees are pruned and the forests are thinned, heavily reducing the risks of natural disasters. Mortality rate is generally very low, and all trees which do not survive the initial planting are replaced. The main risk for any of the NFTP (Non-Forestry Timber Products) would be the reduction in demand for that product, such as the Agar oil.11 PART OF THE TREEDOM GROUP
  13. 13. Asia Forestry Management Co.,Ltd. (AFM)54 B.B. Building, 7 Floor, Office # 3705, Sukhumvit 21 Road (Asoke), th Klongtoey-Nua, Wattana, Bangkok 10110 Thailand Tel : +66 2 259 6455 Fax : +66 2 259 6456 Email : Website :