Reforestation Investment

The Financial Benefits of an Investment in Teak

A one hectare plot (approx. 2.5 acres) typically supports 1,100 teak trees. This high density planting produces tall, straight trees and the maximum yield per hectare. Although 20-year rotations from planting to final harvest are sometimes advertised to attract timber investors, the actual minimum rotation time frame to produce high quality teak is 25 years. This rotation yields a higher volume of logs per hectare and better quality wood at final harvest, providing optimum return on your investment.

On well-managed teak plantations, trees are thinned at regular intervals and the thinnings sold. After 4 years, about 300 trees/hectare are thinned, leaving 800 trees. After 7 or 8 years, the trees are thinned again to leave about 600 trees/hectare. At 12 years, the plantation is thinned to leave 350 to 400 trees/hectare and, at 18 years, thinned again to leave 260 trees/hectare. The final harvest is done at year 25.

The owner of a 5-hectare teak plot purchased from Panama Forestry can expect a total profit of about $3,000 from the 12-year thinning and $6,000 from the 18-year thinning. (The two earlier thinning are not really profitable.) At final harvest (year 25), the remaining trees will be cut, yielding about 130 cubic meters of teak per hectare. Mature teak is currently selling for approximately $500 per cubic meter. After 20% of the return is deducted to cover management costs, the owner of a 5-hectare plot can expect a profit of $260,000 from the sale of the unprocessed logs.

These figures are quite conservative, since they are based on the sale of logs at today's prices. They do not reflect the appreciation in land value and the almost certain increase in the sale price of teak over time.

The Panama Forestry Residency Visa Investment Package

For your Residency package cost of $100,000, you will receive 5 hectares (about 12.4 acres) of land within an established plantation in Llano Grande, near Santiago. The land is titled 100% to you personally, not to a corporation with 51% ownership, which maximizes your return on investment.

Your plot will be planted in teak and professionally managed for 25 years, for optimum growth and timber quality, through final harvest. Rather than charging an annual management fee, Panama Forestry retains 20% of the harvest, which reduces your out-of-pocket expenses. This policy also ensures that your management team has a financial stake is generating maximum returns from your teak property over the full 25-year growth cycle.

After the teak is harvested, you retain ownership of the land. This gives you the option of selling your plot or holding it for the second growth of teak, which comes up naturally.

When you compare the features of the Panama Forestry investment package to those of other reforestation residency visa offering, you'll find that our program offers the soundest, most profitable program available.

For more information on choosing the best residency visa investment package for you, see "How to Evaluate Panamanian Reforestation Residency Visa Programs".

For more information on all types of teak investments in Panama, contact Jeff@Panamaforestry.com.