Ethical Forestry

2. “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

3. “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

4. “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

5. “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

6. “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

7. 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

8. “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