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  • Why Forestry Plantations are worth Investing in

    2010 - 09.03

    Over the years forestry has slowly been recognised as a very important commodity due to the value it can generate through its many uses.

    It is a key source of revenue for many governments around the globe. In particular in Brazil the plantation forestry industry has generated over R$10 billion in taxes in 2007, which in turn created over 4 million jobs.

    The most popular trees grown on plantations in Brazil are eucalyptus. These trees originally came from Australia but have adapted to grow faster in Brazil (35m3/ha/y). They are also being grown with less success in Portugal at a rate of 13m3/ha/y and Canada at a rate of 5m3/ha/y. So it is no surprise then that Brazil’s success is becoming a benchmark for the rest of the world.

    Planted forests are more efficient than native forests and act as a carbon sink while they are growing. What makes them attractive to potential investors is that there is a demand from companies cashing in on the public desire for environmentally friendly products. These companies are looking for forestry projects who can offer to conserve natural forests, increase energy efficiency and improve air quality.

    Strangely despite this demand for planted forests there is actually a deficit of forestry plantations in Brazil and this is increasing. There is hope for the planted forestry industry though with the recent government crackdown on illegal logging and the creation of a law that forces all real estate companies to prove that they are using legal wood.

    Currently there are approximately 5.3 million hectares (0.62% of its territory) of planted forests in Brazil. Of this number there is at least 1 million hectares of old plantations with low productivity.

    So taking into account the government benefits, the demand for forestry products and the low competition, there is a real opportunity here for an investor to capitalise in this fast growing industry.

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

    3 Responses to “Why Forestry Plantations are worth Investing in”

    1. Thanks for the interesting and informative post. I look forward to reading more in the future.

    2. this business help to build green environment and also beneficiary to business people without competition.

    3. I agree . Because lumber prices have been constantly increasing, Forestry Plantations is a good investment way.

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