Sicirec Group



Sicirec Group is a company for the promotion of plantation forestry projects with a clear ecological added value in which financial profitability is combined with a clear and distinct profit for the ecological environment. This combination thus far has rarely has been realised, if at all.

Sicirec Group's present goal is to function not only as an advisory and servicing company for investors in plantation forestry projects, but also and primarily as a management company for plantation forestry projects. Advisory activities and management of investments are conducted through separate daughter companies.

History
Sicirec SA was founded in 1991 by Popko van der Molen.

Sicirec Group BV was founded in Foundation date::2007, also by Individuals::Popko van der Molen. Its seat is in Company seat::The Netherlands. Sicirec S.A. is now a Costa Rican daughter company of Sicirec Group BV.

The beginning - The Dutch market
Since around 1990 Sicirec has gathered ample experience with the much debated Teak plantation investment market in The Netherlands. What attracted the founders of Sicirec was the pretended opportunity for investors to make money with project activities that would help to reduce the pressure on native forests worldwide by producing high quality timber from plantations. The first timber plantation project Sicirec invested in was Flor y Fauna, a Costa Rican based project, set up and managed by the Dutch family Huizinga. In the following years many other entrepreneurs followed the example of Flor y Fauna and within some 5 years the Dutch market saw more than a dozen similar projects and investment offers. As appeared afterward, most of these projects were set up just to raise money, rather than the other way around, that money was raised to set up such ethically driven projects.

Service for investors
As time passed, it appeared more and more that most of these projects were lacking in professional know how and/or in ethical standards. Sicirec operated in this market as a representative of the (small) investors, rendering service to this group of people and providing some measure of badly needed liquidity to the investments.

Lack of investment revenues
Gradually, it became apparent that the bulk of this plantation timber investment market did not meet usual standards of quality. Sicirec's task therefore grew more arduous with time. Sicirec had set up contracts with investors, in which Sicirec's services would be paid mainly with a percentage of the future profits that were expected. Sicirec's and investors interests were therefore running parallel to a large extent. However, since most of the plantation companies did not live up to the originally published schedules of revenues, Sicirec's envisaged percentages did not materialise and Sicirec therefore encountered more and more cash flow problems.

Sicirec Rating System
During these years Sicirec had developed a method to screen and rate the various timber plantation projects in order to make comparisons between the various offers on the market easier for the beleaguered public. The Sicirec Rating System.

New Regulation by the AFM
Around the period 2006-2007 the Dutch authority for the financial markets, AFM, finally implemented new regulation laws for the investors market and took most of the players offering plantation forestry investments out of the market, mainly by wielding prohibitively high (now obligatory) supervision fees. (The case of tropical timber investment funds in the Netherlands.pdf)

Sicirec, that was operating under a Wtb licence because of its trading activities and the mutual funds it had established on behalf of the investing public, was denied the possibility to apply for a new license under the new legal system and as a consequence Sicirec was ordered to pull out of its relationships with her investor-clients. These investors therefore ended up in a direct relationship with the plantation projects, as they had started out originally, now again without the intermediary and protecting role of Sicirec in between.

Sicirec's Goals
Seeing her role of mediator and assistant for and among the green investing public blocked, see above, Sicirec now had time to put all her experience in practice in a project of her own (choice). The most ecologically beneficial and socially attractive project known to Sicirec was an UN-FAO initiated project in Bolivia. In previous years Sicirec had written a report for the FAO indicating how their project should be adapted and extended in order to make it attractive for private investors. Apart from the already implemented qualities of the project, the lasting ecological added values should be secured and the security of the pay out of their part of the future revenues to the investors should be better secured also. Besides, the economy of scale disadvantages, working with large numbers of smallholders over large areas of land, should be compensated by covering part of the funding with the sales of certified carbon credits and other PES. This latter aspect had however already been tackled by the FAO team.

For short presentations on Sicirec's Goals and methods, see (pdf's):


 * 5 page presentation on Sicirec's Goals and Methods
 * [[Media:Conservation of biodiversity using the Sicirec Formula.pdf|7 page description of Sicirec's method to Conserve Biodiversity]]

The ArBolivia project
Sicirec has taken a controlling position in the project's organisation, that has been baptised ArBolivia.

By now, April 2011, about 1600 hectares have been planted of the 5000 commercial timber plantation hectares. The project totals 7200 hectares, including 1200 hectares in protected ecological pockets and corridors and 1000 hectares agroforestry. 1000 of the in total around 2000 smallholders have already been contracted. Of the totally required US$ 17M until break even in the season 2016/2017, $ 3M have been invested already. Besides, ArBolivia has been qualified as a Green Project enabling it to make use of cheap Green Loans to the amount of $ 7M. We expect to sell carbon credits and other PES for an amount between $ 6M and $ 15M. The remainder has to be provided by further equity investments. Depending on the volume of PES sales realised, the IRR for investors may potentially explode. Investors receive part of the revenues depending on the amount they do guarantee, not depending on what they actually will have to provide in cash. There is a high probability that only a few millions of US$ will be needed in cash for a limited number of years at the start, the remainder being covered from the other sources, while the percentage of the future revenues for the equity investor(s) stays the same, based on the total amount of guarantee given at the start.

For details about the ArBolivia project and the investment options, see there.

ArBolovia project mission
Sicirec's goal is to bring this ArBolivia project well on track and subsequently start up a second, third and fourth project of similar design. Since worldwide this is the first project known to us with this level of ecological and social added values, at the same time being profitable for investors, we expect this example to be followed up in quantity worldwide, once it has been shown that the financing method in fact works. The idea is that by such a multiplication of this project a large stream of investment money from the green investing public in the wealthy western world will find its way to these projects in the tropics with all those thousands of smallholders profiting, at the same time increasing the percentage of the land, set aside for full and lasting protection of nature. The ArBolivia formula is an answer to the old question "how to protect nature and make profit with it". Usually, these two objectives exclude one another, but now not any more.