What are some projected values for MSSA Hardwood Timber Reforestation Investments?
Timber is one of the safest and steadiest growth investments available. It is difficult to say exactly what the value of tropical hardwoods will be in 20 years. Instead, we offer information and references to current and historical data, and expect investors to do their own careful due diligence. In addition to providing any information available to us, we will thoroughly discuss value projections and/or rate of return (ROI) calculations with any interested investor.
Conservative Valuation Model
The most conservative evaluation of ROI uses current wood prices and does not include an inflation factor. This model does not count thinning revenue. Even still, this conservative evaluation produces an attractive return on investment.
Current Prices: In 2010, teak in roll form (logs) is priced at approximately $500 per cubic meter. As rough sawn lumber, teak is currently priced at approximately $1500 per cubic meter.
Hardwood per Hectare: The initial planting on a hardwood plantation involves 1100 trees per hectare. Typical management practices include two large thinning, the first at 5 years and the second at 10-12 years. The second thinning is revenue-producing. After thinning and natural mortality, at maturity (15-25 years) each hectare should have approximately 350 mature trees. These trees should yield approximately 300-400 cubic meters of marketable hardwood per hectare.
Ten-Hectare Example: Using this model, a 10 hectare teak plantation between years 15-25 will produce 3500 trees yielding approximately 2600 cubic meters of marketable hardwood. Sold in log form the approximate value today is 1.3 million USD. As rough sawn lumber, allowing for loss in processing, the approximate value today is 2.2 million USD. Again, these amounts do not include thinning revenue or inflation, and use 2010 wood prices.
Please contact us for a proposal that meets your investment needs. We are confident that a well-managed tropical hardwood plantation will yield an annualized return of 10-20%
