Robinia invest

Company offering investment in German Robinia plantations.

Con::Unrealistic projections
Robinia invest sais: 'Your projected returns are 15% per year compounded'. Returns of 200% or more can be made in forestry and there's nothing unrealistic about that. I know other investments that make even more than that, but at higher risk.

The mistake a lot of people make is to compare ordinary european forestry with plantation forestry (what we have). Normal forestry is made on a large scale where your typical european forest, typically pine, is harvested from time to time and within certain legal limits, to produce a timber yield. That yield is typically of low value, as Pine is of low value as well. Pine takes 80-100 years to reach maturity and can therefore NOT be compared to fast growing hardwood trees like Paulownia and Robinia. Pine is already a species that grows faster than Oak. Robinia grows 3 times as fast as Oak and Paulownia grows 2 times as fast as Robinia. If somebody wants the technical details why this happens, then please feel free to contact me through our website. Anyway, my point is that you simply cannot compare the old style forestry with plantation forestry, it's apples and oranges. With a normal forest, trees are not pruned annually to produce nice straight stems, weeds are not removed regularly, to decrease competition for the young trees. That costs a lot of money, which normal forestry cannot produce in a short time scale. Plantation forestry however, is something completely different. Great care is taken to look for the best locations to grow the trees, typically agricultural land, which already has better soils than the typical forest. There is no legal limit as far as harvesting the timber goes, only that you harvest it in a certain time frame, usually 20 years. Then it's considered short rotation crops. Plantations are intensively managed on a daily basis: weeds are removed to give the young trees the best chance, fences are put around plantations to keep the wildlife from eating the young trees, the young trees are regularly pruned to optimize their growth. NONE of these things are done for ordinary forestry, too expensive. Like I said, forestry and plantations? Apples and oranges! Now you know why. Our projections for future returns are based on what has happened in the past regarding price increases of land and timber, and the growth of the trees. If we take our Robinia Investments for example: Prices for Robinia timber have increased 50% over the last 5 years and some 80% of the last 10 years. Biomass prices here in Germany have increased 50% over the last 5 years as well. These are documented figures. Our forestry engineers know what the best growing conditions for Robinia are, and what the increase of volume per tree is when those growing conditions are met. So, just to make a point: What we are doing is indeed not rocket science and can be done by others as long as all the basic parameters for good growing conditions are met. Our estimated projections are just that, estimates. We do not guarantee any returns for our forestry investments. After all, it is a nature product where things can go wrong. If proper management is done and if you take out forestry insurance on the trees (like us), then a lot of risks can be minimized.

Just make sure that when you invest in forestry, you invest in a safe location and not somewhere where there could be political upset in the near future. There are many locations to choose from: From Asia, Africa, America (central and south), and Europe. I've choosen Germany as a location for my company and all our plantations are there, as I can't think of a safer country in Europe. Land IS cheaper to the east and a lot of companies go to certain locations simply for the cheap land there. For me the political system, laws and economic security are what's most important as a location. Of course, land prices are important, which is why we're based near Berlin and not Frankfurt.

These are my two bits, hope you found them informative.

Wouter Bakker Director Robinia Invest