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Wednesday, April 23 2014 @ 04:43 PM EDT

Invest In A Teak Plantation in Panama - Solid Returns, Safe, Growing Steadily

Teak & ReforestationBy DON WINNER for Panama-Guide.com - In today's rough economical waters many investors are sitting on the sidelines, afraid. If you're looking for a safe and stable long term investment, consider teak. The trees in our plantations continue to grow steadily, impervious to market swings, currency fluctuations, or other outside influences. Once planted and then property managed, the teak trees grow and mature over a 25 year period to where they can be harvested for the wood they contain. Think of teak as a very slowly growing crop, just like any other. When harvested the wood becomes an exceptionally valuable commodity to be sold at the best possible price on the world's markets.

What is teak? On our plantations we grow Teak - scientific name Tectona Grandis - from seeds originally from Burma, imported to Costa Rica, and then Panama. Teak is a very dense tropical hardwood naturally occurring in jungles and rain forests around the world. Teak is a very hard, heavy, durable, and strong wood, distinctively oily to the touch. The naturally occurring oils and silicates in teak make the wood perfect use in outdoor furniture, boat decking, and anything exposed to the elements. You see, Tectona Grandis evolved in a very tough neighborhood indeed. The trees developed resistance to the rot, fungus, and boring insects found in the jungles of the world in order to survive. These characteristics, evolved over time, and they make teak a very valuable commodity in our modern world. When first cut, teak has a tawny golden color streaked with dark brown and gold. The color lightens as it dries and can look almost white once it has been aged and sun bleached, as on boat decks. Outdoor furniture made out of teak will probably out live all of us.

Teak As An Investment: The idea of growing teak in plantations to make money is not new. However, many people have tried to grow plantation teak and failed. Teak only grows well in a very narrow band within 10 degrees of the equator. If you look around the world close to the equator there's a lot of oceans, a lot of desert, and a lot of unstable governments. Panama offers all of the right conditions where teak will not only survive, but thrive. With proper care and forestry management plantation teak in Panama can produce excellent results in terms of healthy trees, good growth rates, and quality lumber. Teak also requires a distinct wet and dry season in order to produce good heartwood, the most valuable part of the tree. Some plantations have made poor choices in terms of land selection, and while their trees might appear to be growing big and tall they might contain relatively small amounts of heartwood, due to a lack of a distinct wet and dry season. Teak can and will grow very well in Panama, but plantation management starts before the first seedling is planted, with proper land selection. Soil conditions, soil composition, drainage, and topography are all very important - part of the sophisticated knowledge we've developed over time.

Excellent Rate of Return: Conservatively speaking, one mature teak tree at 25 years will produce about 350 board feet of lumber. When first planted there are 1,100 trees per hectare, however these trees are thinned at the 7, 12, and 18 year points as the plantation matures, when the best and straightest trees are left standing and the imperfect trees are removed to allow the best trees access to sunlight, water, and minerals in the soil. Therefore when the part of the plantation that will be harvested reaches the 25 year maturity point there will be 260 trees per hectare. Doing the math - 260 trees and 350 board foot of lumber per tree - comes to 91,000 board foot of lumber, per hectare. Oh, first you need to know what a "board foot" is. That's a piece of wood, 1" thick and 12" by 12" on the surface. So, assuming a 1" thick plank that's 6" wide and 10' long, that would be five board feet of lumber. Now you can go out on Google and do a search for "teak price board foot" and you tell me how much the lumber from that one hectare of teak will be worth when it's harvested. Do your research, pick a market price, and multiply that times 91,000 = value of one hectare of mature teak. No, it's right, and your calculator is not broken. So, if you're a hard-nosed businessman who only cares about the math, numbers, and making money, teak is the investment for you. We currently have more than 500 hectares of teak planted at different ages and stages of development, with plans for much more. That's were you come in. We are currently looking for new investors to continue our expansion plans, to buy more land, to plant more trees, and so on.

How Green Are You? Teak is an excellent investment for those who are concerned about greenhouse gases and the environment in general. We buy land previously being used to graze cattle, clear cut decades ago. The soil has been exposed to the elements for a very long time and now these lands can only grow enough grass to support one head of cattle per hectare. There are problems with erosion and soil loss - the land is basically "burned out" when we get it. To date we have already planted more than half a million trees, and we keep planting more. Teak trees are basically "carbon sinks" - meaning they draw massive amounts of CO2 out of the atmosphere and sequester that carbon as wood. We use natural and organic fertilization methods, we compost every scrap and particle of sawdust, and return it back to the land. And even when the trees are harvested there will still be other large tracts of land in the plantation that are still maturing. Our strategic goal is to only harvest a relatively small percentage of the plantation in any maturity year, and then of course that land will immediately be replanted with new trees. So, if you're a very green and environmentally conscious person, teak is the investment for you.

Plantation Teak vs. "Blood Teak" - The government of the United States as well as the European Union have placed tough restrictions on the importation of teak from Burma, also known as Myanmar. The government of this country is something akin to that of North Korea - totalitarian, communist, and bloodthirsty. They allow the clear cutting of their forests to get at one of the few remaining resources they have, the teak which grows in the jungle. The simple fact of the matter is that naturally occurring sources of teak - also known as "jungle teak" or in the case of Burma "blood teak" - are drying up. In a few years only plantation teak will be legally available for sale on the world's markets. Naturally occurring market forces of supply and demand will continue to exert upward pressure on the price of teak, a trend that has already started and which we expect will accelerate over time.

Good Place to Park Money In Troubled Times: An investment in teak is basically recession proof. If you're giving yourself heartburn every night, watching your investments in the stock market or other instruments, you'll appreciate the peace of mind that comes with an investment in teak. The trees don't care if Fanny Mae or Freddy Mac explode and fall into the ocean. The markets tremble in reaction to higher than expected unemployment figures, but the teak trees on the plantation never get the message so they just keep growing. Simple, steady, and as regular as clockwork - no matter what happens "out there." An investment in teak is an excellent long term investment for those who want to park money somewhere out of harms way.

If You Would Like To Know More: Please contact me directly at email don@panama-guide.com, via telephone on my US Magic Jack number (845) 514-9893, or on my cell phone in Panama at +011 (507) 6614-0451. I'll be happy to provide any additional information you might need, and to answer all of your questions. Thank you very much for your interest.

Copyright 2011 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.

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