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Tiger Defeat Brings Stability To Sri Lanka
May 27, 2009Article by Ray Withers
At last Sri Lanka is celebrating the end of years of suffering and carnage with government troops defeating the Tamil Tigers in the north of the island. No doubt the humanitarian pain will live long with many who have lost family or friends, but the end of hostilities can only really be a relief to most people. Now the government officially controls the complete island, the turmoil of the economic and political instability that has gripped the nation once described as one of the most beautiful places on the planet is over.
This new calm and end to lawlessness can only bring confidence to individuals and businesses investing and dealing with Sri Lanka. Property investors can play a part in the island’s recovery by sinking cash in sustainable forest management in Sri Lanka to offset your carbon footprint.
Only 1% of global teak production comes from sustainable forests, like the timber hardwood plantations at Anuradhapura, Sri Lanka.The rest comes from natural rainforests, most of it illegally logged. More and more countries, and most recently the European Union are outlawing the importation of unsustainably harvested wood. The sustainable timber has to be supplied from somewhere, so maybe now is the time to get to the root of the problem with your investment.
The strategy is simple – put your money in to timber investment management.with a partner in Sri Lanka.
- You pay for the trees and contribute towards maintenance costs
- Your partner looks after your investment by planting, thinning and harvesting your trees
- You and the partner split the profits. For a minimum investment of £10,000, the investor buys 300 agar wood or teak trees and contributes £5,000 – £6,000 towards maintenance costs.
- Agar wood trees are harvested after six years, producing a gross harvest value of £60,000, deduct the timber company’s profit share and the investor’s net profit is £41,000.
- Teak trees are harvested after nine or 15 years, when the gross harvest value is £246,450, leaving the investor with an anticipated net profit of £271,540.
These projections are based on a lumber price of £0.72 per board foot for the first thinning, increasing at an annual rate of 6% for the subsequent thinning and final harvest. The 5% profit share is retained as a harvest fee. The timber company has allowed a generous 10% for harvest and processing costs, which covers the milling the trees. Everyone benefits from the investment – the investor from the return on capital and the workers and their families farming the forests who receive better pay that stimulates better living conditions than they would otherwise achieve.
For more information contact Property Frontiers on +44 (0) 1865 202700.