Is It Wise to Invest in Teak?
Sunday, November 21 2004 @ 09:44 AM EST
Contributed by: Don Winner
Look at it like this. You can put $200k into a bank account and let it sit there forever, or you can drop $40k into teak and 20 years later you can harvest something and sell the lumber.
The two critical variables are how much land you get for your investment (how many hectares of teak) and the management of the plantation. I've heard some selling it as 1 hectare, then 1.3 or 1.4 hectares. The bottom line is that it's a negotiable point. You obviously want to get as much as possible in your deal. So shop around.
As far as management is concerned, it's relatively easy to find existing teak plantations that were basically just planted 12 or 13 years ago then left completely alone. They were never properly managed and thinned, so the trees are way behind on thier projected growth curves. You have to thin the growth stands at regular intervals to allow the best trees more room and light to mature. If you don't do that, then you end up will a whole lot of stunted trees that are of little or no commercial value.
So, shop around. Teak can be a good investment and a good way to get your visa. You own the land forever, even after the timber is harvested, so there's additional long term value there. Personally, I think that the teak route makes a whole lot more sense than the $200k in the bank account, as long as you take your time, shop around, and compare all of the variables to find the best deal. And, as always, Caveat Emptor...
(Reply from Susan)
International Living is a "pay to play" organization....just like Escape Artist. They "recommend" whoever pays them big bucks. Just like those companies that do "real estate tours." They are paid to tout. Caveat emptor.
If you are considering a reforestation investment as a way to get your visa, be very careful in choosing a project that ALREADY HAS ITS CERTIFICATION. Very few do, but a lot are "pending" (and may remain so for years, and your visa will pend right along with it...).
I have heard that Futuro Forestal is certified and has good environmental credentials, but don't have any personal knowledge about it. Also, if you care about the environment, the experts say avoid monoculture. That means, look for a project that plants different kinds of trees, not just one kind.
Do not buy into any reforestation project until your attorney has confirmed its status. Do NOT rely on an attorney who is part of a firm that also sells reforestation projects. Get an independent immigration lawyer. In Panama, the line between lawyers and people who sell stuff is sometimes very blurry, unlike the USA. Pay to Play is rampant everywhere. Caveat emptor (again).
Do not expect to earn any return on your reforestation investment for many years. You are not doing this to Make Money Fast and for sure, you won't. It's probably the easiest and cheapest way to get a residency visa if you can't qualify for pensionado status.
(Reply from Mike)
rather than contact a salesman with a company get in touch with rudy nagel email@example.com " i think is his address " he belongs to one of these groups ... he invested in one of the projects that is accredited for visas .. but he went on to get his penseniado also .. i have mine for over two years and it has paid for itself with savings in electric bill alone ... rudy visits his " finca " often to see the progress with the planting of "paying " crops ..
(More Info, Relayed from Kathleen and Len)
Hi Don. When International Living posted their recommendation of United Nature and said that their lawyer (also our lawyer) also recommended it, I wrote to IL with my concerns about mono culture planting, logging in the Darien and so forth. I got a nice email back from Robert Kroesen who is the director of United Nature. It follows. I am not sure what to think, but figured you can patch as much of it as you wish into your web site.
(Email from IL re: Reforestation Follows)
> To: > Date: 11/08/2004 10:54:39 a.m.
> Subject: Panama Residency Through Reforestation
> Dear Kathleen Foote:
> MANDY FAIRCLOTH from INTERNATIONAL LIVING has sent me your inquiry regarding reforestation, its residency incentives and your environmental conserns regarding our method of growing trees.. My name is Robert G. Kroesen and I am the director of UNITED NATURE, the largest teak plantation in the Republic of Panama. Our company specializes in teak plantations exclusively. We do not plant other species of wood nor any other crops. Instead, we focus on producing the best possible teak for the market. Our six Forestry Engineers and staff of 200 oversee almost 3000 hectares to insure our clients investments are maintained at uncompromising standards.
> Regarding your environmental concerns, we have been planting since 1993 and we have tried to plant mixed species of native trees. However in Darien the best growing tree is Teak and wood production of native species plantation will never produce the returns that a teak plantation will produce. You have to understant that the Darien region is a very poor region. The people that live there depend of logging for a living and in order to change the way they have been making their living and stop the logging is to create reforestation projects that will create alternative supply of wood that will be profitable for everybody involved in the project. If the project is successfull their jobs in the plantation will be secured and they will stop logging. We are an environmental company and I am very proud of the fact we have over 1200 hectares of primary forest under our protection. We have never cut down primary forest in order to plant teak and we will never cut down primary forest in order to plant teak. These rainforest patches hold a great diversity of wild live, including big cats, and I know for a fact that there is no mixed species plantation that will ever support the wild live we currently have at our plantation. Monoculture is not bad. It creates an alternate supply of wood relieving the pressure to cut down primary forest. It creates much needed jobs to a population that will otherwise cut primary forest to survive and if it is done the way we have do it it will even hold more wildlive than a mixed species plantation. I think we have got the right formula since for every hectare we have planted, we save about 7 hectares of rainforest. If you are ever in Panama, I would be happy to take you to our plantation so that you can see first hand our operation.
> Usually IL subscribers are interested in the residency alternative, however if you interest is more for the investment of this I can sent you more relevant information. Just let me know.
> Feel free to review our website at www.unitednature.com or please feel free to contact me at Robert@UnitedNature.com. We can also be contacted by phone in Panama (country code 507) at 223-1953, Cell: (507)674-6277 or by fax at 213-1931. The best time is from 8:00am to 5:00pm from Monday till Friday.
> I look forward to hearing from you.
> Best regards,
> ROBERT G. KROESEN
> UNITED NATURE