Forestry Investment Services

“Invest in Forests – Money does grow on trees”

The forests in the tropics have been declining at an exponential rate for several decades due to rampant logging and conversion to agriculture and other land uses. Currently a significant proportion of the world trade of timber originates from areas where the trees are felled illegally. Most of the forests in developing countries have been logged without regard for sustainability of the timber resource and associated values the forest provides to society. As such, large areas of tropical forests are often severely degraded due to uncontrolled logging activities.

Global Forestry Services has established Forestry Investment Services to provide a framework for development of forest investment projects based on forest restoration and/or plantation development. All investment projects are designed to make a target annual return on investment of 12% or more based on net profit (before taxes) and meet international certification requirements such as the Forest Stewardship Council (FSC).

Investment projects center on planting fast growing local tree species to produce timber suitable for plywood & utility timber can yield significant returns in 10-15 years or timber for chips in 5-7 years.

GFS provides a simplistic structure for forestry investments whereby the investor owns the rights to the planted trees based on level of investment. Initial investment fees cover ALL project costs through final harvesting. Investment costs includes: management fees; depreciation; capital costs; planting costs; land preparation. Harvesting costs, royalties and premiums are deducted from timber sales so the investment revenue is net of project costs.

GFS has vast experience in tropical forestry to provide the project design; planning as well as monitor project development and implementation. GFS will strive to integrate forestry carbon projects within investment projects if appropriate and economically viable. All projects are designed to meet FSC certification requirements to ensure credibility in the management system.

Proposed Project: Sabah, Malaysia.

Tangkulap & Pinangah Forest Reserve (FMU 17A) consists of 50,020 ha of logged over degraded forest located in central Sabah, in East Malaysia. FMU 17A have been inventoried by Sabah Forestry Department and determined to be unproductive for the next 20 years due to past conventional logging activities that left most of the forest severely degraded.

Project Objectives: Forest restoration through mosaic planting of local fast growing species, including 15% dipterocarps and habitat trees
Project area: 11,000 ha (net planting area)
Land Owner: Sabah Forestry Department
Species : Binuang (Octomeles sumatrana), laran (Neolamarkia cadamba), Talisai (Terminalia copelandii) & (Terminalia phellocarpa); magas (Duabanga moluccana)
Project Establishment: 5 years
Project Duration: 20 years
Projected Annual Return on Investment: 13.3%
Internal Rate of Return: 9.7%

For more information on participation, please contact us.

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