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    Project to grow Brazil eucalyptus tree population launched

    2017 - 01.10

    A new project to inject fresh energy into Brazil’s forestry investment landscape is to be welcomed.

    A tie-up between ArborGen, a global supplier of seedling products and forestry industry technologies, and International Paper Brazil, a packaging producer, will see an “increased effort” to develop and sell new varieties of eucalyptus seedlings in Brazil.

    The agreement will also lead to the growing of eucalyptus plantations in regions of Brazil where there is growing interest in the genus – potentially good news for those keeping an eye on forestry investment in Brazil.

    The deal will give ArborGen additional access to International Paper Brazil’s eucalyptus germplasm.

    Since 2013 when the company began its commercial sales operation, sales have increased to a current projection of 47 million eucalyptus seedlings and nine million pine seedlings in 2016.

    “The Brazilian forestry industry is one of the largest, fastest growing in the world; Brazil is the world’s largest producer and exporter of hardwood pulp,” the companies said in a statement.

    The eucalyptus market utilises approximately 700 million seedlings per year. With the original agreement, private landowners gained access to elite eucalyptus clones that were once only available to integrated producers. This new agreement will increase that access and allow for additional development of advanced genetics for landowners.

    “This expanded agreement allows ArborGen to utilise its advanced technologies and tree breeding expertise with IP germplasm to continue to improve the genetics of existing seedlings,” said Gabriela Monnerat, managing director of ArborGen of Brazil.

    “We will also be able to offer additional benefits such as increased yields and improved growth to landowners while expanding the breeding program to other regions of Brazil and other sectors as sawtimber, bioenergy, etc.”

    Why Invest in Brazil?

    2010 - 06.29

    Of the BRIC countries many traders don’t think that an investment in Brazil is the best bet for their stock portfolio when there is also a choice of China and India. After all, among the BRIC funds China has the largest population and is the world’s third-largest economy. India is the world’s largest democracy and has the second most populous nation.

    Compared to this Brazil is roughly two thirds the size of the US in terms of population and the country is half the size of Russia. But don’t sell Brazil short, among BRIC funds, this Latin American country offers fantastic investment opportunities.

    For years the Chinese have been inappropriately allocating capital on a grand scale and the interest rate in China has been far below the economic growth rate, which for 20 years has resulted in a runaway real estate market. There is also a growing concern of China’s protectionist policies and fears of a US trade war. This means that not only are private sector companies from foreign nations at a disadvantage, but also BRIC investments in China are at risk of being in a company run by Beijing instead of businessmen. After all, China is a country that prefers state owned enterprises.

    Compared with China, India offers more of a long term promise due to its democratic government. Despite this, long term profits won’t be forthcoming anytime soon as of all the BRIC nations India is the poorest nation and its infrastructure is a serious problem. India is likely to lag behind other BRIC funds until this improves.

    I can see a lot of potential in Russia, it is a huge country with vast natural resources but the lack of economic diversification and stability means it is a risky short term bet. The emerging market has been volatile due to currency problems and inflation worries in global markets.

    Given these risks it seems that Brazil offers the most advantageous opportunities for investment. Compared to the other BRIC countries Brazil businesses are not controlled by the state, the nation is rich in natural resources, which has diversified the economy and the nation enjoys a lack of dependence on exports of consumer goods. Also, unlike the other countries in this group Brazil has a stable democracy.

    There are other advantages of investing in Brazil than just the obvious. Brazil generates 73% of its energy from hydroelectric power and is home to one of the largest oil reserves in the world. Their middle class is booming so sales inside this BRIC investment zone offset sales of resources abroad. There is a competitive manufactured goods industry in which Brazil does not engage in a mercantilist exchange rate policy to boost exports.

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

    Water consumption of eucalyptus forestry plantations

    2009 - 11.16

    A forestry investment body in Minas Gerais,  a region of Brazil,  has recently conducted a series of studies into the consumption of water in eucalyptus plantations.

    The data showed that, from  an annual precipitation rate of 1299.0 mm,   57.1% (741.0 mm) was taken up by eucalyptus trees in the process of transpiration (which is the transfer of water from soil to atmosphere from absorption by plant roots and rhizomes), 9.8% of the total rainfall (128, 0 mm) was evaporated (evaporation is the direct transfer of water from the surface of plants and soil to the atmosphere). Between 0.5 to 1.3% (16.9 mm) were taken directly from the soil surface and 31.8% (414.0 mm) infiltrated the soil and replenish the water course.

    The conclusions drawn were that transpiration of 741.0 mm per year or 2.3 mm per day is similar to other forest species and perennial crop species and therefore,  the information generated suggests that groves of eucalyptus trees do not consume excessive quantities of water.

    The total of  evapo-transpiration (the sum of transpiration through evaporation), was 869.0 mm or 2.38 mm per day.  Because there was a surplus of 414.0 mm per year (31.8% of the rain event) the eucalyptus does not dry the soil).  This surplus is not used by plants during the year and was used to replenish the stream.  Furthermore, the maximum variation observed in the flow of the stream was 8.0% during the study period, indicating that the replenishment system of the stream was well regulated.

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here

    Eucalyptus success prompts new forestry investment project

    2009 - 09.09

    A productive eucalyptus plantation collaboration has prompted a leading agricultural biotechnology firm to enter a new agreement with the Chinese Academy of Forestry (CAF).

    FuturaGene, which develops eco-friendly solutions to enhance yields and improve the processability of plants for forestry, biofuels, biopower and agriculture, will develop poplar – used for plywood, veneer and structural timber – with increased yield and processability for the Chinese domestic market.

    The plans follow the agreement, in May this year, between Oregon State University and FuturaGene unit CBD Technologies to produce a proprietary eucalyptus clone and a eucalyptus transformation protocol.

    For the latest project, Futuragene will provide proprietary genes and technical assistance to CAF with the aim of improving yield, drought and salt tolerance of short-rotation poplar for the biofuel and biomass markets.

    Dr Stanley Hirsch, FuturaGene’s chief executive, commented that the agreement is “strategically important” to his organisation’s global initiatives in the crop’s development for biopower and biofuel production.

    “We are delighted to be extending our relationship with CAF following the productive start to our initial eucalyptus-focused collaboration agreement,” he added.

    The first agreement between FuturaGene and CAF, signed in 2007, aimed to improve the yield, processability and disease resistance of eucalyptus trees.

    Future hybrids will doubtless provde increase yields to forestry investors and therefore better returns on their investments in forestry,   whilst also protecting the natural forest by virtue of the increased timber that can be harvested from the forestry plantations.

    The Timber Investment Blog is sponsored by Greenwood Management. For more information on investing in Forestry please click here