Friday, September 17, 2010

Who's investing in forestry and how to join the ranks

Big institutions are gaining headlines for their involvement in forestry projects. Although their incentives may vary, the end result leads to planting more trees, capturing carbon and growing communities.

The Wall Street Journal recently ran an article announcing the beginning of phase II of Toyota's reforestation project in the Philippines. This project is part of their Forest of Toyota initiative and its main focus is, "to create a system that combines reforestation with a means of supporting the livelihood of local communities, by providing the reforestation expertise and tree-planting techniques developed through its activities in China." Although Toyota will never see any direct financial returns on this investment (maybe just a few more potential buyers in the future), their decision to use reforestation as a means to support local communities speaks volumes of the social benefits inherent with a reforestation project.

In another recent article in the National Business Review entitled, Harvard endowment fund keen on natural resources, it highlights the University's heavy involvement in the forestry sector. While their investments in Forestry are for the sole purpose of "generating strong results to support the educational and research objectives of Harvard University", they have also found them to be, "a core strength in our portfolio, offering inflation protection, cash flow and long-term growth."

The good news here is that regardless of what your intentions are for planting trees (whether it be environmental, social, and/or financial), you do not have to be a huge multinational corporation or the richest university in the world to get involved. There are many different opportunities to invest in reforestation ranging from buying a single teak tree on a plantation in Costa Rica to owning your very own plantation.

While your investment in a project will depend on your individual initial investment amount, involvement, and risk aversion, the most bang for your buck is in establishing your very own plantation. Globalization has brought the world closer and investing directly in foreign countries is easier than ever.

With time, labor and land being the biggest factors that determine the profitability of a plantation, we have established opportunities to invest in fast growing tropical hardwoods in Nicaragua where the land and labor costs are less than neighboring countries. Tropical species such as Teak, Mahogany and Spanish Cedar, which thrive here, have shorter growth cycles and higher market values than the hardwoods of the northern hemisphere. The tropical climate and fertile soils promote faster tree growth, and the social benefits are greatly needed. To learn more about our forestry investments and Nicaragua, visit our website (www.maderassostenibles.com).

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