Pacific Teak
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Developed and managed by Pacific Management Group Inc. (PMG), the Pacific Teak Reforestation Project began in 1998 in Costa Rica as privately funded venture.
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[edit] People
- Ron Fleming, PMG Founder, Chairman of the Board
- Fernando Gutierrez, Esq. Legal Counsel Costa Rica
- John Schau, Esq. General Counsel, Attorney at Law
- Iván Chaverri, Manager Forestry Services
- Jorge Espinoza, Sales Manager
- Jeremy Ayales, Marketing Division.
- Lewis Waugh, Non Executive Director, Corporate finance planning
[edit] Unrealistic projections
Pacific Teak projects a Return on investment ranging from 12% (in what they call "zero price increase" scenario) to 18% (in what they call "likely case" scenario with 5.2 price/inflation assumptions)
[edit] Wood prices
"The high rates of return promised to investors are not only a consequence of unjustifiably high projections on the yield of timber to be expected, but on equally exaggerated projections on the prices at which such timber could be sold. There are several flaws associated with these figures. One refers to the high base price from which they are projected. Another is the assumption that the base price and its projections apply equally to all the timber to be produced, to the timber from intermediate harvests, as well as from the final cut. Yet another possible flaw refers to the unusually high yearly price increments assumed to take place within the next 20 years, from 5% to 10% a year."
"The base price used by most of these initiatives ranges from 450 to 500 dollars per cubic meter standing in the forest, or as log by the road side. This price can hardly apply, for example, to the production from the first couple of thinnings, scheduled to take place within the first 4 to 12 years in the cases mentioned in this report."
"The products derived from each thinning have in fact their own price structures. They are also meant for different markets and end-uses. These differences are so marked that they could best be considered as different products."
- From Treemail by Julio César Centeno
[edit] Trees per hectare
"Teak plantation management regimes vary between and within countries, mainly according to site-specific conditions and prevailing markets. Typically, however, it is recommended that initial stocking rates be in the range of 1000 to 2000 stems per hectare to allow for early mortality rates and to provide an opportunity for selecting the better individuals during thinning operations. Partially depending on the intensity of planting, an initial thinning should be considered as soon as the branches start to make contact with those of surrounding trees; this may occur when the plantation is around four to five years old and the intensity of removals may be as high as 50 percent of the initial stocking. A production thinning may follow at about age ten to 15, and a final production thinning at around 15 to 20 years. Again depending on market requirements and other factors, an ideal final stocking is likely to be around 200 to 300 stems per hectare, or approximately some 300 m3 of wood. Management practices may vary significantly, however, depending on whether teak is grown on short or long rotations." - From "Teak a global overview"
[edit] Price per hectare
This is to be made on a parcel containing 240 trees at harvest (15 years after planting) which can be bought for $42,000. Which means a "parcel" probably is about one hectare.
[edit] Teak harvest cycle
Pacific Teak uses a rotation time of 15 years. This is is considered by some to be suboptimal for teak:
- "Based on a weighed assessment of economic and silvicultural considerations, a rotation of 25 years to 40 years may at present be considered as the optimum cycle to achieve a viable balance between financial returns and the production of market quality timber." - From Treemail by Julio César Centeno
[edit] See also
Pacific Teak's self-description
