Investing in Teak Forestry in Sri Lanka.

Investing in Teak in Sri Lanka.First quarter  out line for this year 2018 April is FfP to plant 3.7 acres of Teak Forests. We are looking to investment partners for another 5.5 Acre of land in the Southern Dry zone of Sri Lanka. You are welcome to visit us at Forests for People Tanamalwila any time or contact us.  Investing in Teak in Sri Lanka.

Would you like to own a teak plantation grown and cared for? You pay for the land and an annual fee for maintenance years. Investing in Teak Forestry in Sri Lanka.

Investing in Teak in Sri Lanka.

Teak trees matures in about 16 years and if kept longer the value increases. A cubic metre of teak cost around Rs.30,000 in Sri Lanka and the value of a 20 years teak tree is around Rs. 15,000 – 20,000. We have planted acres of agroforests around Thanamalwila since the 1980.  Its special because Teak can be cultivated only 10 degrees north and south of equatorial.

After initial meeting and sessions, investors can gather particulars of the projects, make payments, secure certificates and deeds, sign legal agreements an agreements on the maintenance of the land. In the event that you do not wish to continue the project, you resell it back to us or transfer to a new investor who will accept the terms and conditions.

How it works, Teak Commercial Forests as a Investment in Sri Lanka.

This is what FfP Commercial Forests has on offer. The Teak Commercial Forests Plantation for those of you interested in the environment, financial return on a long term and carbon positive footprint. We are a environmentally friendly group.

We buy uncultivated land in the dry zone of Sri Lanka and develop them as Teak Commercial Forests. The land is divided into sections with a minimum of quarter acre with teak 100 plants. If you are interested in investing we are your partner. Visit us and see what it all about – Investing in Teak in Sri Lanka.

Be part of the solution by planting trees

Investing in Teak in Sri Lanka  – FfP can change parts of the dry zone in to forests areas with tree planting activity. We plant uncultivated acquired private land in remote dry zones with Teak and educate the local and work together to create  agroforests. Teak was introduced by the Dutch in the 1800. Teak suits the dry zone climate ideally and has a high hardwood timber value. Teak prices have grown on average by 7.9% a year between 1970 & 2000 and by 9.9% in the years up to 2010. In time you can visit the land developed into forest park with profitable teak trees growing in it.

People choose teak to conserve and protect the natural forests. It is said that up to 60% of the requirement timber in Sri Lanka is being obtained through natural forests. FfP with this project aims to make it profitable for investors. Enable the conservation of natural forests while we help the local community in agroforestry planting more trees.

What the international market says about teak. Sri Lanka is not new to teak plantations although the island does not have any part of the  intentional market.  There is a shortage of  hardwood in the Sri Lanka market for its own usage.

Investing in Teak in Sri Lanka.

Expected yield per teak  tree is  25 cubic feet with a projected value a minimum of LKR 100,000 per tree in 2036.
After harvesting 100 teak tree per quarter acre,  you still own the land which appreciates in value.

Investing in Teak Forestry 14 Reasons Why

Investing in Teak in Sri Lanka.1. Institutional Investor have increased their investment in Forestry including Teak from a mere $1 billion in 1985 to $65 billion in 2009.

2. Major pension providers have started to allocate assets to forestry as part of thiner portfolio diversification strategy. Analysis undertaken by Credit Suisse showed that the returns generated over this period were between 14% and 15%.

3. Global alternative Investments Research Consultants Mercer who advise clients on $300 billion of non-traditional investments still see Teak Forestry as an ideal investment for Institutional Investors.

4. It was noted that these returns where achievable at a modest level of risk. The legal system in these forestry countries protested investors property rights under legislation drawn up by the World Bank.

5. The sharpe ratio measuring return divided by risk was highest for Teak, this signifies that Teak provide the best Risk ? Return trade off of all asset classes.

6. Greatest reason for high level returns is that biological growth of trees generates 61% of the return on Teak forestry investments. This is a great hedge against financial volatility in other more traditional financial markets.

7. Research by the National Council of Real Estate Investment Fiduciaries (NCREIF) reported that over a 10 year period the return from forestry outperformed the S&P500.

8. With annual returns of 9.9% Timber has outperformed Property, Stocks, commodities and Bonds for the last 30 years.

9. The value of wood on the stump has risen by 3% above inflation over the last century.

10. The clamping down on illegal Teak forestry which has already cost the world 50% of its ancient forests will increase the demand for ethically grown sustainable Teak. This clamping down on illegal logging in the short term will reduce supplies of Teak.

11. With a growing world population and new markets opening up for high quality hard woods demand is continuing to grow which will continue to push up the prices.

12. Teak over the next few years. Teak prices have grown on average by 7.9% a year between 1970 & 2000 and by 9.9% in the years up to 2010.

13. Timber returns are uncorrelated with all other investments and is invaluable as a portfolio diversifier and risk reducer. Teak can now be invested in via a personal pension and is a great way of diversifying your portfolio and reduce the risk of volatility within your pension. If prices are low you can keep Teak in the ground until prices improve.

14. Teak investment is great for the environment. One hectare of Teak Forestry over 16 years will consume 320 tonnes of CO2. An average person in the western world producers 160 tons in the same period. By buying 1 Hector of Teak a couple can be carbon neutral for 16 years. A great way to offset carbon footprint.

Mark Skeels
Published on Nov 8, 2011

 

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