Panama Teak Forestry
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[edit] Summary
Company offering investments in Teak and Cedro Espino in Panama.
700 hectares (1,729 acres) total land area. Inluding Teak, Cedro Espino, cattle (?) and bare land still to be planted.
[edit] People
Jeff Duda is president of Panama Teak Forestry.
[edit] Projects and plantations
[edit] Unrealistic projections
Panama Teak Forestry says:
- ROI is projected at 12% or 15% using a conservative 3% inflation estimate over time.
- The easiest way to invest in timber is to buy stock in timber companies. There are publicly traded companies like Rayonier (RYN) like Plum Creek Timber (PCL). They both traditionally pay dividends in the 4% range. But the returns from the smaller companies involved in sustainable management of high value tropical hardwoods and teak such as Panama Teak Forestry is much better. Simply put with a growth rate of twice that of pine or fir and a value of more than twice that of pine or fir the return on investment is higher even with the more intensive management practices required for teak. Yields from Panama Teak and Forestry have been above 15% since the inception of the company.
- What rates of return have historically been earned by timber investments?; University studies show real rates of return in the 10 to 12 percent range can be reasonably expected. A leading timber index based on actual returns found rates of return vary from 11 to 16 percent depending on region. Since 1986 the major timberland property index has returned just over 16 percent annually (40% from income and 60% from capital appreciation). Managed teak plantations have had rates of return of about 20%.
- Share overall ROI will be 12% per year which will increase share value and will be paid out as dividends as we start to harvest timber. This ROI does not factor in any increase from inflation and the increasing price of teak overtime. If we assume a 3% increase in the value of teak overtime the ROI would be 15%.
