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Timber Investment Is A Burning Debate Topic
August 20, 2009Article by Ray Withers
Sri Lanka timber investment is expected to be a burning topic of debate at the next international climate change conference in Copenhagen, Denmark.Representatives of many world governments will attend the December summit to thrash out plans to reduce carbon emissions – and the number one objective is protecting rainforests.
A forest-mapping project has just finished in Sri Lanka, aimed at implementing a Forest Resources Management Project for sustainable forest protection and conservation. Minister Champika Ranawaka: “A total of 615 forests have been mapped and demarcated. This amounts to 98. 74% of our project target.”
The Minister said that serious action would be taken against those who encroach forest reserve premises. The Minister said that in debates leading up to the Copenhagen Conference in December, it had been estimated that 17% of the trees in the world were logged for firewood and charcoal but in Sri Lanka the percentage is much more.
“In Sri Lanka the consumption of firewood is much more than fuel. This is yet another way that forests are destroyed,” he said.Ethical investors can help by putting money in to joint ventures with Sri Lankan forest conservators in a hardwood investment program.
The investment also covers the costs of employing local villagers in places like Anuradhapura, Sri Lanka, to cultivate and harvest the forests.Property Frontiers, an Oxford, England, based real estate investment consulting company, is offering schemes that allow a minimum £10,000 ‘seed capital’ that can grow with the trees in to about £250,000 over 15 years.
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.These investments also give UK taxpayers other benefits, like rollover relief on capital gains tax when disposing of the investment and SIPP tax breaks if the investment is managed within a pension scheme.