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Ethical Plantation Investments

The world is suffering a global credit crunch and consumers are feeling the pinch from rising food and volatile oil prices, so what’s an investor to do in the face of a bear market like this?

How to find the best investment in uncertain times?

How to find ethical investments especially for those concerned about sustainable development?

Sustainable forestry investment is not only a stable and predictable addition to a portfolio, but it has outperformed the S&P index every year since 1910.

Forestry investments form the only asset class in existence that has gone up in three out of the four major market collapses of the 20th century. Better still, timber investment (especially in tropical hardwood) offers a substantial degree of protection against inflation.

During the highly inflationary 1970s (1973-1981), forest investment came in third behind oil and natural gas (up 22%).  That put it well ahead of traditional inflation hedges such as property and commodities. Even in the low inflationary 1980s and 1990s, timber was the second-best performing asset group, with average annual returns of 11% from 1982 to 2003.

Many analysts think that investing in woodland is the only low-risk, high-return asset management strategy there is. With the global supply of timber dwindling – one tenth of the world’s forests have disappeared in the last 25 years, just as international sanctions to combat unsustainable logging are being firmly enforced – timber – especially tropical hardwood - has never been so precious. In 2006, investment in forestry delivered returns of 20.6% against 14.4% in 2005, helped by the fact that institutional investors are actively diversifying their portfolios to include woodland and forestry investments. For example, Harvard University has invested 12% of its total endowment funds in timber.

New woodland management allied to advances in forestry technology mean that returns on investment in timber – especially in Malaysia – can be dramatic.

MPP has pieced together some interesting land package deals and now uses the land to plant the Aquilaria tree. The tree stock consists of: Agarwood, the world's most expensive resinous wood and the trees are treated with a process patented by Robert Blanchette and Joel Jurgens, from the University of Minnesota.

Their process amounts to the injection of a serum into the Aquilaria tree after three years of its life and over the following three years it produces Agarwood. The main markets for it are the middle-eastern peninsulas for perfumes and China for herbal medicines.

Our investors buy trees, not land. So, land price movements are irrelevant to the investment. Supply and demand will, of course, ultimately dictate the quantity of return and viability. Proceeds will depend on the production and price of Agarwood. The most important points to remember are that if the demand for the Agarwood fragrance slackens, the market would fall and your tree might not be worth as much.

Aquilaria trees, for example, will cost you a minimum US$5,000 whilst one acre would cost US$40,000.

The expectation is that one acre would grow 960 trees.

Wood Investments are an ethical asset that you can be proud of. A low risk high return asset that will grow with your family.

A few of the many reasons to choose Plantation Investments:

1. Safe, low risk & high return.
2. High and growing demand.
3. New species like Agarwood with quick returns.
4. Sharia Compliant.
5. Commission for registered Financial Advisors.
6. SRI and SIPP.
7. Open end investment fund being launched.
8. Teak contract prices have risen by 300% in the last 4 years, ITTO (International Tropical Timber Organization).
9. Large institutional investors like US pension schemes and unit trusts have been including this investment strategy in their portfolios for many years.
10. Harvard University have invested 12% of its total endowment funds in timber.
11. New products soon to be launched: Mahogany, Sandalwood, Jatropha

 

 

 
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