Of course with any investment there are risks.
What are the risks to an investment in Di Pacifico Dos?
Well there are two aspects to the investment the teak and the land.
1. The teak: Anything which affects either the teak yield or the price of teak will have an impact on the return on your investment.
Listed below are some of the factors which could affect your teak yield:
a. Hurricane - no hurricane has been recorded on the pacific coast of Costa Rica
b. Forest Fire - teak trees of more than 8 years of age are resistant to forest fire, careful management of the teak plantation, fire breaks, removing debris all help to minimise the risk of fire damage.
c. Disease - again careful management, disease prevention and early removal of any diseased trees reduce the risk of disease.
d. Adverse weather conditions - teak does not grow well in either very wet or cold conditions and a significant change in climate could afffect the teak yield.
Teak is a traded commodity world wide and some of the factors which would affect the price of teak are listed below:
a. Oversupply of teak - currently less than 5% of the world's teak comes from plantation sources. The rest comes from jungle sources. As world opinion and international laws move to restrict the logging of this natural resource the supply demands will fall to teak plantations.
b. Reduced demand - currently demand for teak is increasing year on year largely driven by huge demand from India and China. The likelihood is that demand will continue to increase.
2. The land: a reduction in land prices in Costa Rica will also affect the return on your investment
Some of the factors which might affect land prices are as follows:
1. Reduced demand: A reduction in demand from North American and Canadian holiday makers will reduce land prices and whilst the world economy is at a low at the moment, remember that this is a 6-10 year investment. Ask yourself this question - "do I really believe North American economy will be as bad or worse than it is now in 6-8 years"?
2. Political Instability: Political instability would certainly affect tourism to Costa Rica, however Costa Rica is the oldest democracy in central and Southern America, with more teachers than policemen, no army and huge foregein inward investment by mulitnationals.
If you are intrested in an investment in Di Pacifico Dos but are worried about the risks to your investment ask us to prepare an investment return showing a 0% land price increase, a 0% increase in teak prices and a poor teak yield.
The return still beats the bank! Just drop us an e mail or give us a call on +353 1 272 4184.
Showing posts with label Teak Yields. Show all posts
Showing posts with label Teak Yields. Show all posts
Monday, October 6, 2008
Friday, August 1, 2008
Teak Growth rates
I came across this letter, albeit written in 1996, by Dr. Raymond Keogh, from the International Teak Unit of An Coillte, which is the Irish National Forestry Organisation.
GROWTH PROJECTIONS
TEAK GROWTH RATES -- A RULE-OF-THUMB
by Dr. Raymond Keogh
Dear Colleagues;
I feel that the debate on growth rates of teak has gone on to long; growth rates for this species are well known and it is time to make this abundantly clear!
The question of growth rates in teak plantations has become a contentious issue in recent times. It is of crucial importance to teak growers and investors because timber production forecasts and financial returns depend on accurate predictions. Fortunately, we know more about teak growth rates n plantations than any other tropical hardwood. Growth and yield studies began in earnest last century and continue today. Growth is normally expressed interns of cubic metres per hectare per year and highest growth rates are normally expressed in terms of maximum mean annual increments (note: maximum current annual increments, which are higher than mean annual increments are not normally used in timber forecasting as they would produce erroneous predictions over the life of the crop).
A very tolerable rule-of-thumb can be applied across the tropics regarding highest growth rates in teak plantations. This rule-of-thumb does not change for wide definitions of stem volumes. GROWTH RATES WHICH EXCEED AN AVERAGE OF TWENTY CUBIC METRES PER HECTARE PER YEAR IN TWENTY YEARS ARE UNLIKELY TO BE ENCOUNTERED. In other words, only in exceptional circumstances will the total production of stem woody material exceed four hundred cubic metres in twenty years.
Growers and investors must base their predictions on avarages and not exceptional growth rates. Most practicing foresters in the tropics would be content to encounter an average annual growth rate of ten to fifteen cubic metres per hectare per year over twenty years on all their plantation site. Through good site selection and the planting of genetically improved seed, growers can boost avarages and avoid poor producing sites.
Genetic improvement may boost growth but is an expensive long-term activity. Growth may also be boosted in some cases by fertilizer application, but the identification of the necessary chemicals and their optimum rates of application are not fully understood. At the present state of development in teak, it would be unwise to expect that average growth rates can be boosted to reach or surpass the maximum rule-of-thumb growth rate for teak throughout the tropics. Even if it were possible to do so, it would be wise to have a clear understanding of the effects of this increase on wood quality.
Raymond M. Keogh
Teak 2000
1 May 1996.
Have a look on our website www.costaricainvest.ie and see how you can benefit from the returns on teak and the profit potential of development land in Costa Rica.
GROWTH PROJECTIONS
TEAK GROWTH RATES -- A RULE-OF-THUMB
by Dr. Raymond Keogh
Dear Colleagues;
I feel that the debate on growth rates of teak has gone on to long; growth rates for this species are well known and it is time to make this abundantly clear!
The question of growth rates in teak plantations has become a contentious issue in recent times. It is of crucial importance to teak growers and investors because timber production forecasts and financial returns depend on accurate predictions. Fortunately, we know more about teak growth rates n plantations than any other tropical hardwood. Growth and yield studies began in earnest last century and continue today. Growth is normally expressed interns of cubic metres per hectare per year and highest growth rates are normally expressed in terms of maximum mean annual increments (note: maximum current annual increments, which are higher than mean annual increments are not normally used in timber forecasting as they would produce erroneous predictions over the life of the crop).
A very tolerable rule-of-thumb can be applied across the tropics regarding highest growth rates in teak plantations. This rule-of-thumb does not change for wide definitions of stem volumes. GROWTH RATES WHICH EXCEED AN AVERAGE OF TWENTY CUBIC METRES PER HECTARE PER YEAR IN TWENTY YEARS ARE UNLIKELY TO BE ENCOUNTERED. In other words, only in exceptional circumstances will the total production of stem woody material exceed four hundred cubic metres in twenty years.
Growers and investors must base their predictions on avarages and not exceptional growth rates. Most practicing foresters in the tropics would be content to encounter an average annual growth rate of ten to fifteen cubic metres per hectare per year over twenty years on all their plantation site. Through good site selection and the planting of genetically improved seed, growers can boost avarages and avoid poor producing sites.
Genetic improvement may boost growth but is an expensive long-term activity. Growth may also be boosted in some cases by fertilizer application, but the identification of the necessary chemicals and their optimum rates of application are not fully understood. At the present state of development in teak, it would be unwise to expect that average growth rates can be boosted to reach or surpass the maximum rule-of-thumb growth rate for teak throughout the tropics. Even if it were possible to do so, it would be wise to have a clear understanding of the effects of this increase on wood quality.
Raymond M. Keogh
Teak 2000
1 May 1996.
Have a look on our website www.costaricainvest.ie and see how you can benefit from the returns on teak and the profit potential of development land in Costa Rica.
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