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Another forestry fraud?
In the Ibox, I mentioned a company called Sino-Forest as a possible investment for those interested in investing in timber. Recently, an acknowledged short seller of the stock put out a very damaging report on this company. It can be found here: http://www.muddywatersresearch.com/research/tre/initiating-coverage-treto/
Since the report came out, Sino-Forest's share price has dropped 70%. I've read the report, and it contains several damaging allegations. Basically, it calls Sino-Forest a ponzi scheme. Sound familiar to anyone?
A1
AN ANALYSIS OF TATF - 1992 TO PRESENT
Of importance to present and prospective owners of Brunner's Tropical American Tree Farms trees is the following report and analysis from one of our contributors who wishes to remain anonymous. We are indebted to him for the research he has done. While reading it please notice the attributions to the various sources used in compiling this paper. While this begins with a review of teak promotions in general, the analysis then focuses on TATF and reveals why it seems to be in trouble and is utterly failing in meeting investor expectations.
Central American Teak Plantations
The start of the teak plantation boom in Costa Rica was in 1989. Following the lead of a small US teak plantation using novel financing and marketing models, the Dutch company Flor y Fauna began planting and marketing sections of teak plantations to investors in the Netherlands. In promotion of these tropical timber investments buzzwords like 'ecologically responsible, socially conscious, environmental sustainability' were splashed across flashy investment brochures, targeting a environmentally oriented clientele. After a few years passed, in the mid nineties these companies were 'green washed' with accreditations that supported questionable yield and return on investment, projections. By 1994 ten other Dutch teak plantations were being started, all using similar business and marketing models. As well, other companies from other nations, joined the teak rush. [11]
The business of teak plantations were aided greatly by research papers coming out of the United Nations heralding the deforestation of the tropical rain forests, and the first sirens of the CO2 climate change carbon sequestration, debate. There were many genuine reasons for the wave of new teak plantations. The government of Costa Rica aided, by forming a strong national policy promoting investment in reforestation.
As sometimes happens, good intentions stumble with the interaction of free enterprise, and the new age 'fast growth' teak plantations soon were reeling from the exploitation of aggressive and unrealistic marketing ploys. Inflated yield and price projections, failed in execution and function, tainting initial investor offerings. [8] Soon the government of Netherlands was investigating, eventually involving the Code of Ethics Committee on Advertising, the Dutch Parliament, and later the courts. [9,10]
The emerging problems of the investment schemes of these plantations were very well described by Julio Cesar Centeno, Phd., below.
"It all looked too good to be true. In almost all cases, the huge rates of return promised to investors were unfortunately construed on highly unlikely projections on the yield and price of the timber to be produced. The forecasts upon which the success of these forestry projects had been built had little to do with technical knowledge and professional judgement.They had been largely based on speculation. The Dutch public soon became the victim of traders of illusions.[1]
By the end of 1996 a scandalous proportion of these new model of teak plantations, had been exposed. Yield projections had been shown to inflate actual performance by more than double, price projections exceeded realism by staggering percentages, and inflated return on investment (ROI) projections were exposed, leaving murmurs of fraud."
Using a slight variation of this production and marketing model, Tropical American Tree Farms, TATF, opened for business in 1991. Many of the same situations, have evolved in TATF's short history. Early and later investors have received in spades, little of what they were promised in hearts. Within five years of its inception, TATF's marketing model began to underperform projections, but with an expanding investor base suppling fresh capital, TATF's business seemingly flourished. Unmet investor expectations, mattered little internally, while promises of increasing return on investment were consistently intimated, through new projections.
Was this naivety, or something other? Below is a study using TATF statements, industry statistics, articles and the research of journalists, silva culture studies, subject related websites, and comments of TATF investors; filtered with my own personal experience as a master log scaler, lumber grader, and interactions with the timber industry and markets, for many years. Though it is impossible to write a critical examination totally without bias, conclusions and opinions have been documented with a bibliography and appendix. The evolution of the TATF story, follows. The information in this study should allow the foundation for the reader to form his/her own conclusions, or at very least, present avenues to pursue the answers, to other queries.
Teak Plantations for sale - Standing Wholesale Inventory
Realistically how much can juvenile teak be worth when you can buy an existing teak plantation in Costa Rica, with 12 - 14 year old trees with circumferences of 70 - 110 cm, for $27,000 a hectare. 70-110 cm circumference translates to 9-14 inch diameters above the stump swell. This range is exactly the projected diameter range in the TATF projections for 10 and 13 year trees. [4][7]
If these trees are grown on 3 meter centers, and have been thinned at 7 and 10 years leaving approximately 42% of the original planting, a hectare would contain approximately 466 trees of this size. Those 446 trees are being sold for $58 apiece along with the land underneath them too! These are no where near the wholesale projections TATF is marketing. Using this inflated $58 figure and the TATF growing model, if you bought a 100 trees for $3,000, at this age you would have 42 remaining with a current standing value of $2,436. Assuming you were paid at rates TATF is projecting for the other 43 of these trees thinned, (with 15 culls), you are at break even with 7 years left. However, to this date, very, very, few TATF tree owners have received any compensation for the 7, 10, or 13 year thinnings. Note: The wholesale value of the standing timber alone is much less than these figures, as the above calculations assume the land has no value. The documented cost of planting teak in Costa Rica can be found here, [19]. Along with maintenance costs for five years, it is about $1.65 apiece. Using a median price of parcels of plantation size and quality, you can add another $3 to rent the land for 25 years, and the cost hitherto of your five year old teak tree, rent free for another twenty years, is $4.65
Also to be noted is the current TAFT projections of the 42 remaining trees at 13 years, is $504 each, $21,168 for all 42. The historical peak market price (in 2007) of an equal volume of (older) 20 year logs was $84 apiece. [5] The difference between the 13 year projected value of $504 and the $84 actual value of 20 year logs, will be multiplied by 5% every remaining year for the 20 year TATF projection. Note: it was necessary to compare TATF's projected 13 year log value with actual 2007 peak value of 20 year Costa Rican plantation logs, because there is no existing market for comparison, past or present, for 13 year trees or their resulting lumber. ** note: Dec. 2010 prices, the latest recorded in ITTO price reports, has Costa Rican plantation logs listed at 350-500 M3, CNF - (cost and freight). The equivalent FOB from any Costa Rican port, is $200-$400 M3, the 2007 historical market peak. Further investigation of the fluctuation in the prices paid in India, was traced to the volatility of the Baltic Dry Index, ( shipping). Also noted, ITTO price quotes are generally FOB, i.e., freight paid by the buyer, unless otherwise stipulated.
The inflated TATF projected value, for twenty year trees, with the built in 5% annual value inflation, are no where near in the ball park. That 5% annual value inflation is based on past markets for mature rain forrest teak and slow growth teak plantations. The average age at sale was well beyond 50 years. You can't extrapolate that inflation rate to a new, nearly non existent market, for juvenile teak. [2] [5] Only with a hitherto nonexistent value added product line for the twenty year trees, could these values possibly find foundation. As well, the sawn wood market for fast growth plantation teak cannot meet these projections.
At the link below are other Teak farms for sale as well; 225 Ha/ $27,500/Ha; 133 Ha/ 17 year teak / $27,500/Ha; 600Ha 10-14 year teak / $28,340 / Ha; all developed and maintained. Teak farms are also available for sale cheaper, in Panama, Nicaragua, an Ecuador. [4] [12] There are no shortage of Teak Farms for sale, many failing because of the same business model with similar projections, and no past or current market for the product, while juvenile.
~~ Pricing Teak in International Markets ~~ ITTO a pdf download
www.itto.int/direct/topics/topics_pdf_download/topics_id=...
At present there is no transparency or standard in plantation teak prices. Below are ITTO proposals for standardization of pricing based on grades. Grades are to be determined by diameter size, shape, straightness, heartwood characteristics, and lack of other natural and processing defects. It is proposed to have three differing locations of value, Asia, Latin America, and Africa. The planning and implementation of this standardization of plantation teak pricing, is in its infancy.
The latest price (2007) for Costa Rica plantation teak in this ITTO publication is $200-$300/M3 with exceptional logs reaching $400/M3 all FOB in the US market. Translated that means the average $300/M3 log would fetch $.71/bd/ft. Note: these are whole logs, not squared or cants. It should be noted these prices roughly correlate with plantation exports from West Africa, Columbia, and Brazil shipped to India, though the later three are generally older trees of higher quality. [5]
It appears the future of plantation teak sales will be in logs rather than lumber, unless individual plantations create a value added product line or open their own marketing subsidiaries. This is probably the reason for the addition of Tropical American Hardwoods (TAH) as a wholesale / retail marketing arm of TATF.
The Sri Lanken plantation teak in the picture at the link is between 24 - 30 inches in diameter at chest height. The age is upward of fifty years. The Costa Rican plantations listed above, the healthiest trees are about 12 inches in diameter, at 12 - 14 years. Compare the difference in bark characteristics of the older Sri Lanken plantation trees. They are both plantation trees, but with increased age the log and lumber quality will vary greatly. [3]
Another good link for teak plantations is below
~~ http://www.treemail.nl/teakscan.dal/files/mngteak.htm ~~
In this article methods of the 50+ year teak plantations are discussed. [2]
Tropical American Tree Farms' Marketing Projections, - Facts or Fiction
The TATF site and projections- [7]
Salted throughout the main site in different topic locations are statements designed to inflate expectations, an example follows. In the What's New section of the main menu is the lumber price pitch.
~~ excerpt from the existing TATF website ~~
Teak Lumber Prices
The best published independent authority we have found for international large-scale wholesale tropical lumber prices is the ITTO, or International Tropical Timber Organization, which publishes frequent Tropical Timber Market Reports with, in their words, “the aim of improving transparency in the international tropical timber market.”
The February 15, 2008 ITTO Tropical Timber Market Report, their most recent report that includes the US imported sawnwood prices, shows that the average US Imported Sawnwood Prices for rough sawn teak lumber is $2,125 per cubic meter, or $5.01 per board foot.
In the same Market Report, the price reported for first quality teak lumber in the U.K. market is $4,160 to $4,804 per cubic meter, or $9.81 to $11.33 per board foot.
Clearly our trees are still young and their lumber is not yet at its prime, and not every log will yield first quality lumber, but it is exciting that the actual prices independently reported for adult teak are significantly higher than the conservative $3.11 per board foot beginning price for adult teak in our projections. [7]"
There is over thirty years of difference in the type of teak TATF is comparing to their 20 year (supposed mature) teak, with its projected price of $3.11 bd/ft. TATF's 'adult teak' by even plantation standards, is juvenile. The highest price ever paid in the US for this age and quality of log was at peak market 2007. The price loaded on the boat in Costa Rica was a median price of $300M3 which is 71 cents a bd/ft. [5] The TATF 2011 projection price for this years 20 year teak is already four times higher than has ever been paid. The actual peak price of 71 cents bd/ft for semi adult 20 year teak is only 6 cents higher than what TATF is projecting for 7 year unmarketable thinnings and 4 cents lower than projected for 10 year unmarketable thinnings, both with no mature heartwood.
So is this $3.11 Bd/ft to mean the projected price of 20 year teak 20 years from today? Not according to this paragraph in the Teak Projections section. [7]
~~ excerpt ~~
For example, teak lumber from 7 year old trees sells today for approximately $0.65 per board foot . That same 7-year teak lumber, assuming an increase in price of 5% per year, will sell for $0.91 per board foot 7 years from now. And teak from 20 year old trees that would average $3.11 per board foot today, if the prices increase at 5% per year, will sell for $8.25 per board foot 20 years from now.
~~ end excerpt ~~
This paragraph is clearly misleading. Now it becomes a big problem that the peak price (in 2007) for Costa Rican 20 year plantation teak logs, was 71 cents Bd/ft. From that inflated $3.11 figure, future 20 year projected profits will be computed by multiplying at 5% inflation every year. This $3.11 bdft value has no basis in reality, there is no such log grown at present, in the Costa Rican plantations. There are no past or present ITTO Price Reports that support this value for fast growth teak plantation logs! [5] [6]
If this value is extrapolated from a value added system (unstated), or a milled lumber volume, then in opposition I present; at the present ITTO specified log prices, these juvenile logs will not yield adequate 'mean recovery' of existing lumber grades, to support the $3.11 bdft figure. The mean recovery of the expected cut is $.71bdft., plus perhaps a .25 bd/ft milling cost. As well, no evidence of recovery of old growth characteristics in fast growth logs has been documented or demonstrated by TATF, or from the market's standard, the ITTO.
Furthermore, clearly without a guaranteed purchase and utilization by Raleo , or without benefit of other value added venues, neither the 7 or 10 year thinnings have marketable value, there simply is not an existing market. [6] Very little of the lumber from 13 year thinnings will meet the lumber grades TATF is inferring, in this years What's New section of the main menu. Before TATF projections can have rational foundation, Raleo or other value added measures, must prove the ability to utilize the the entire thinning volume, and the final harvest volume. As of now five years of thinnings have yet to find a market, and the investors are yet to receive payment. ** Note: as of the 2009 'Tree Owners News', Raleo no longer represents an option for investors to realize, the 'value added' concept. For the grand majority of investors, the past promise of value added by Raleo Designs, has crashed and burned. As was the hope of recovery from Raleo, so goes now, the hope invested in Tropical American Hardwoods (TAH), the marketing arm of TATF. Tropical American Hardwoods hopes to find markets kind to past projections, through sawn products too young to compete well, with the age and quality of the competition, and the experience that evinced.
In the menu section Why Plant Tropical Hardwoods, much of what is said is absolutely true. Tropical hardwoods make beautiful furniture, molding, flooring, musical instruments among many other uses. What isn't said, is the demand is for lumber and veneers from old growth forests, with old growth characteristics. Currently like teak, there is little market for juvenile trees. This is not to say Raleo or other value added measures can't utilize cuttings from younger trees, but currently there isn't a market. So investment should be for environmental and sentimental reasons, and not for investment returns. Until a viable market proves otherwise, the 'other species' hardwood market, should be considered as undeveloped.
That the Brunner's have diversified planting is commendable on several levels, but at this time it should be viewed in a different context than return on investment.
The only statements in the website that give an indication past and present projections are not being met, are found in the Tree Owner News, section of the main menu. It is here that early nineties investors first get a glimpse, that the projections for juvenile teak are not being met.
- Nov 1998 Tree Owner News - [7]
In the section of Early Thin of the 1992 Teak it is first mentioned investors should not have expectations of proceeds from early thinning. Though the projections count the value of 25% of the purchased trees to be thinned at approximately 7 years, and the projected value of that thinning to be .65/bdft, determined by an appreciating value of 5% per year; these thinned trees are now to be presumed to have no value, and don't expect a check.
Those who have bought trees earlier than Nov. 1998 have a legitimate complaint, that though very carefully worded in some sections that there are no guarantees, other sections like projections, willfully neglect stating the lack of market and value, for immature heartwood and sapwood.
At this point in the 1999 - early 2000's, the only thing covering a growing overhead for plantation maintenance is a continuing expanding investor base bringing in much needed operating capital, using known false return on investment projections, for a market that doesn't exist. Adding to the problem, processing costs and 6% care and management fees will not be adding to the revenue stream anytime soon.
This is the time of conception and the reason for, the sister company, Raleo Designs. Its sole purpose under the euphemism of "value added", is to create and utilize a market, for previously promised returns. It is by design and purpose that Raleo, gives value where none has previously existed, and that allows future orders using the same projections to skirt perceptions of unethical behavior. Until Raleo proves it can handle the thinning volumes of existing and new investors, the ethical viability of TATF teeters on kind economic and market conditions as well as a continuing revenue stream from new investors. If any one of the three aforementioned fails, at this point, TATF and Raleo Designs, are not self sufficient standing alone or together.
In the Tree Owner News Summer 1999 TATF estimates Raleo Designs once in operation will be able to utilize thinnings and pay investors $4.00 a bd/ft and calculates the first thinning of 25 trees per 100, will produce about 8 bd/ft apiece, for a return of $800. Investors are also given an option of using the returns to purchase more trees, and would be credited at $4.00 bd/ft for the thinnings. Most chose to wait for the Raleo Designs value added cash return, and are still waiting. Building a factory, creating a product line, and exploiting the existing high end art and furniture market, takes time and has a limited number of potential upscale clientele.
Without the reality of a functioning Raleo Designs, providing a "value added" market, TATF's business model is broken, and with this knowledge, from the year 1998 forward, TATF management has been operating a ponzi pyramid to cover operating costs and acquisitions. TATF more than doubled the hectares with farm acquisitions in the next seven years, doubled the trees planted, and doubled the employees; all before the grand majority of investors have received promised returns for thinnings at 'value added' prices. Value added prices that were presumed possible, through belief in the viability of the underperforming Raleo Designs. It would later become evident, Raleo Designs would never be able to fulfill the promises to all TATF investors, and bring the business model back in line with fabricated marketed expectations. As late as the 2007 Tree Owner News, TATF was touting Raleo's value added market for the juvenile thinnings, but nine years after conception and five years after the start of production, Raleo had only utilized 188,000 bdft of sawn thinnings, while accumulating a back logged inventory of an additional 3.8 million bdft. Still, it was stated, that after increasing the capacity of production of Raleo by a factor of four, the backlog would soon be processed and distributions soon made, to all investors.
Distributions never happened for investors that purchased trees after 1992, and despite many promises of meeting projections with the development of a value added market, in 2009 investors were rudely awakened that Raleo would not be able to honor the $4.00 bdft price for juvenile thinnings. Instead it was offered, their boards could be sold on the local market for $.65 a bdft, or they could continue to wait for an unspecified value added program, with unspecified valued added products. The 2009 Tree Owner News continued to surprise, when the kicker was installed. It informed, that because of cash flow problems, investors who want their trees thinned and maintained, must front the cost to TATF. Now the revenue stream is flowing in the opposite direction than the original tree agreement and website intimated, with not a cent having been distributed to the grand majority of investors. The devil is in the details, and the fine print of the tree owners agreement.
As of the 2010 Tree Owner News not much has changed, except the price of new trees continues to rise, and new projections continue to baffle the discerning and well researched investor, with unrealistic return on investment forecasts. The game continues with genetic selection of superior faster growing, quicker to harvest, teak. Teak that will still produce juvenile sawn lumber with characteristics only beginning the process of maturation, and infantile in comparison to the the sawn wood production from slow growth plantations (50+ years) and the trees harvested from the dwindling supply in tropical rain forests.
Throughout TATF's naive and tumultuous journey, tremendous land wealth has been accumulated with the rapid growth from acquisition, but as of yet, very little production of a merchantable product has been realized. TATF is literally trying to create its own markets in timber and products, to justify its past projections, and secure its very existence. No doubt TATF's 'stated' goals and motivations are noble, but are the existing methods and models viable, and are the existing practices, ethical? Only in success, will these questions be positively affirmed, the alternative, is to sad to contemplate.
The Risk of Investing in TATF Going Forward - with a heavy dose of caveat emptor.
There are more than a few critics of the central american fast growth teak plantations, their business models, their growth and pricing projections, and the total lack of an internationally accepted market standard, for juvenile teak. Their marketing strategies as discussed above have come under fire from researchers and governments, trying to protect investors. In the Netherlands regulation has partially succeeded in curbing some of the worst abuse, in Germany the problems of investing in tropical tree plantations has been noted. In this paper several sources have documented the problem, with consistent areas of concern. [1] [2] [3][13] As well, the ITTO, the guideline for pricing and quality of the global markets, freely admits the lack of market mechanisms to deal with the variety of quality and ages, in the teak plantation markets. The development of grades and the collection of pricing statistics is admitted to be in its infancy. This is especially noted as a problem for other types of plantation tropical hardwoods. At the time of this writing, there simply is no defined market, listed in ITTO Price Reports for teak and other juvenile hardwoods from tropical plantations. [6]
It is from the above realities, many investor complaints past and present, are surfacing. TATF is no exception, there are a growing number of TATF clients questioning the projections and pricing structures of the marketing model. As well it should be noted, TATF even after realizing an absence of market, and after experiencing a serious downturn in the global economy and the forest products market, continues to give unsubstantiated projections of return on investment, that have no identifiable basis in reality. That old business models were proven to be naive of existing conditions, might be excused as inexperience. However to continue to adhere to models, methods, and projections proven inaccurate, and to continue to aggressively misrepresent future investor returns without adjusting models or projections, creates an ethical objection for the discerning. There will be no soft landing for TATF, if adjustments in their method of operations, are not made.
TATF presently has a cash flow problem not allowing for the proper care and maintenance of investors' trees. Once thought to be a portion subtracted from the thinning distributions, TATF now is soliciting payment advances for these services. The delays in thinning, threaten the quality of the final harvests, as the clear wood free of heart center and sap, will be greatly limited without the maintenance of limb removal. The lack of new tree sales to cover operational overhead, adds to the problems of the crumbling business model. Employees went for extended periods without pay in 2008 - 2009, many finally being terminated. Even before the global economic crisis, distributions to the employee Caja seguro social were not being made, and TATF and subsidiaries to date, have accumulated more than 1.8 million dollars in unpaid liabilities, to the Caja. [22]
Further investment in TATF should be viewed as high risk, both for the principal, and receiving the projected inflated ROI. TAFT has yet to meet projections of initial thinnings, and continues to falter with value added projects, to pay distributions for all plantings after 1992. New projections inflate realistic returns from uncharted future markets. Very few new investors form a base, to support the overhead of obligations. Beyond the high risk of the faltering business model, the following points should be weighed as in conflict with a potential investor recourse.
The Tree Purchase agreement investors sign is not a contract. It requires nothing of binding consequence from TATF, other than the planting of the initial 100 trees, and a replanting if needed, of any trees that do not survive the first year. In the entire rest of the agreement, all limitations are placed on the buyer's ability to recoup moneys from unmet implied obligations. Note especially #17 'No Interest in Real Estate or Other Assets' and # 23 'Decisions, Warranties, and Indemnities', releasing TATF from all responsibility from everything, including their own errors and negligence.[20] All of this is moot, except in the US, as this is an agreement not a contract, and has no legal standing in any court in Costa Rica, as well, it is not written in the required, Spanish language. The tree certificate issued with this agreement is also useless, because it is not written in Spanish, and, under Costa Rican law, only the real estate ownership is a material question. Minerals or resources on or under the property are presumed implicit in the escritura y plano catasrado, (deed). If an investor chooses to challenge anything about TATF, a Costa Rican corporation, the plaintiff is automatically assigned an adversarial position in the courts, a Costa Rican lawyer must be assigned to your case, and TATF gets to select the venue and the judge to hear the case.
Also to be stated, there is no incentive for the government to regulate or place limitations on TATF. The national reforestation program claims the work product for future tradable carbon credits, the government benefits from the addition of employment in rural provinces, and maintains an environmental 'image' in the eyes of the global economy.
Any future investment in TATF, should be for environmental or sentimental reasons, not a return on investment.
~~ sources ~~
1. Traders of Illusions, Julio Cesar Centeno, July 1996
~~ http://www.treemail.nl/teakscan.dal/files/traders.htm ~~
2. The Management of Teak Plantations, Julio Cesar Centeno,
~~ http://www.treemail.nl/teakscan.dal/files/mngteak.htm ~~
3. ITTO Tropical Forest Update 14-1, 2004, Making the Grade [EN]PDF-3 plantation teak utility
~~ www.itto.int/publication ~~ note: you need to register to access this report
4. Central American Teak Plantations - For Sale
~~ http://www.rojofuegosa.com/teak_farm.htm ~~
5. ITTO Tropical Forest Update 18-2, 2008, Markets - international pricing mechinisms fo teak plantations [EN]PDF teak pricing ITTO
~~ www.itto.int/direct/topics/topics_pdf_download/topics_id=... ~~
6. ITTO Tropical timber Market Report, Vol. 13 Number 23, Dec 2008
~~ www.itto.int/publications ~~ note: you need to register to access these market reports.
7. TATF website with links to sister sites Raleo, EcoHardwoods, and Tropical American Hardwoods
~~ tatf.com ~~
8. Appendix 3 Flor y Fauna S.A. Costa Rica Reforestation Program, - Phd. Pablo Camacho, Note: the original claims later proven to be inflated volume projections of over 100%
~~ http://www.fao.org/DOCREP/005/Y7205E/y7205e0e.htm ~~
9. Growth and Yield, Paul Romeijn, Tree Mail, July 1996. Flor y Fauna in the courts.
~~ http://www.treemail.nl/teakscan.dal/files/growth.htm ~~
10. After the courts, Flor y Fauna misses projections by more than half.
~~ http://www.treemail.nl/teakscan.dal/files/growth.htm ~~
11. Forest Certification as a tool for greenwashing, Julio Cesar Centeno Phd., Nov. 1996
~~ http://www.treemail.nl/teakscan.dal/files/greenwas.htm#pric ~~
12. Teak Plantations as an Investiment - link http://www.surfingto.com/caribbean/
80 hectare teak plantation in Panama +/- 8 -12 yr. trees - $18,750/hectare
very similar planting methods, harvest schedule, and projections, to TATF
~~ http://www.surfingto.com/caribbean/80_hectares.html ~~
13. Investment Risks of Tropical American Timber Funds
~~ onlinelibrary.wiley.com/doi/10.1111/j.1477-8947.1998.tb...
14. Management of Teak Plantations for Solid Wood Products, William Ladrach, 2009, Excellent
article on teak plantations, the history and evolution and the present. Maintenance silviculture
~~ http://www.istf-bethesda.org/specialreports/teca_teak/teak.pdf ~~
15. Teak lumber from El Salador - Miami re saw - good information with links to grading specs
~~ http://www.woodshop102.com/50.html ~~
16. Illustrated Guide to American Hardwood Lumber Grades - excellent general information
~~ http://www.nhla.com/illustrated_guide/IllustratedGradingGuide.pdf ~~
17. South American Hardwoods - excellent Info on mature teak characteristics
~~ http://www.sahardwoods.com/content/view/14/30/ ~~
18. Global hardwood prices, logs and sawn
~~http://www.globalwood.org/`
19. FAO Research, the cost of planting teak in Costa Rica
~~ http://www.fao.org/forestry/media/4602/1/0/ ~~
20. TATF Tree purchase aggreements - Note: Invalid in Costa Rica, agreements have no legal standing in Costa Rica, and contracts in Costa Rica must be be written in spanish.
~~ http://www.tatf.com/htm/tree_order_forms/forms/tree_order_form.pdf ~~
21. For research convenience, a log volume computing table for Doyle, International, and Scribner
~~ http://www.woodweb.com/cgi-bin/calculators/calc.pl ~~
22. Investorshub , see post 934 for link to the caja and the identity #s of TATF and Raleo.
~~ http://investorshub.advfn.com/boards/board.aspx?board_id=7823# ~~
==========================================================================
Below two links are listed for investment forums, that have had issues with TATF's client relations, projections, market pricing claims, among other subjects. It should be noted, these are disgruntled clients, some with just cause, others perhaps with too large of expectations. The comments need to be weighed within this context, and at times a grain of salt should be applied. From my perusal of over 2,500 posts, I will highlight some situations that should be considered, and possibly further researched.
==========================================================================
Appendix 1 links -
A1. Critics of TATF - InvestersHub forum - more than 3,000 posts over 4 years. Some posts need to be taken with a grain of salt.
~~ http://investorshub.advfn.com/boards/board.aspx?board_id=7823# ~~
A2. Tropical Tree Investment Forum - critics
~~ http://tropicaltreeinvestmentforum.com/index.php?topic=3.15 ~~
You are right, where is the money?
And not a little, but no one knows how much Taft as squandered.
I continue to be puzzled by the stance of Steve and his cadre. Specially, since there are indications of neglect at farms and operations.
A real sad story.
The situation of TATF and its people deserves denunciation and it is appalling.
If you still believe in the tooth ferry of TATf returns.
Be careful with sending your money to a foreign country, even if the individual is a "god fearing person". It seems to be a large among of fearing individuals these days hitting the scandal board and the filling the lists of the corrupts.
Bottom line, walk away from any structure similar to TATF.
You can thank the posters here from saving millions perspective
suckers.
PS Plantation Teak prices continue its decline.
Where did all the money go? The thirty-million plus mailed and wired to Steve and Sherry Brunner for purchases of growing trees on his tree farms from 1993 to present? Checks that over 3000 trusting buyers sent in amounts ranging from $3200 to $340,000, totaling over $30 million by his own statements on his website four years ago? Do not believe anyone who says this company is honoring their commitments to tree buyers. It is patently untrue. Read all the others who have posted here on this forum. As you will see below tree owners are now being told that they cannot even visit their trees after years of assurances by TATF on its website that they can travel to the tree farms and see their trees anytime.
The bulk of the money doesn't appear to have been spent on tree maintenance, in fact, the only visible evidence of effort by this company is on maintenance of its website and solicitations for more purchases. At this point we know that TATF is not going to be able, nor will ever be able, nor even wants to, provide repayment in place of the returns Brunner so recklessly promotes on his website. So what did he do with all the money he received after he planted the baby trees?
Tree buyers with trees as old as 17 years are getting no responses from TATF, and now the company office seems to be nowhere to be found.
Signs are that they have quit. Several have told me they cannot get directions to the office or farms. Now, the latest email received this week from a TATF tree-owner states that he is currently in Costa Rica and, when asking to visit his trees, was told by email that "they would not allow any visits to their farms this year".
From this we learn that investors will no longer be allowed to visit the site where their trees allegedly were planted. There is zero evidence that this business remains viable or that the company president and staff still function or even exist. No investor, repeat, no investor, is reporting any returns, reports, or communication from Mr. Brunner or from his employees, if he still has any. The only responses come when a prospective buyer of trees uses the TATF email address. Then a glowing two-page advertisement is sent as a reply.
Some time ago the TATF website removed the company address and any directions to its office or farms, apparently to discourage investors from coming. Whether TATF is still at that location is unlikely. It is unconscionable that the owner, basking in righteousness on his website, is still posting the same promotions and projections he used when tree-owners originally bought their trees from him many years ago.
Owners of TATF trees -- Alert
Post on this forum between 4 and 5, Fridays. That time frame is available then, and only then, for non-premium posters. Contact me at jstanton5@gmail.com and I will share information I receive from other tree owners. So far, 27 have emailed and are on my mailing list. None of the communications I have received contains good news. Most are reporting various unsuccessful attempts to communicate or to visit.
Innocent people who read Mr. Brunner's promotions on his still extant website should know what is really happening to people who believed, trusted, and sent their money to TATF during the past 17 years.
belmontx
New tree owners in CR TATF exceeded expectations and more workers had to be hired! The TATF farms are doing so great!
I have tried all methods to contact TATF and owners and I have investigated them and appears owners have disappeared.
New investors read all posts here before donating your money to TATF.
20 years in business and they have not honored advertized projected distribution to investors here again if anyone recieved a distribution cash/check from TATF please post here.
Do not believe what Duped says his history of posts are contradictory and suspect. Or AB he is promoting for TATF AB advertizing for TATF on Alibaba advertizing under TATF name.
Take care and be carefull it is a jungle out there.
There are many other ways to save the planet by planting trees there are 100s of legite investments that are oxygen / carbon intake systems that do protect the earth.
Brad
The deceptions by this company continue.
There is no change to the status of Tropical American Tree Farms' lack of connection with its existing tree-owners. Its office appears to only be interested in prospective tree-buyers.
No one other than duped has reported receiving pictures and "assessments of their trees progress". And bear in mind that duped is a person who threatened legal action against TATF before receiving a refund and has since posted relentless promotions for the same company. Read his first posts on this forum from last spring, beginning 4/11/10 through July of last year.
The many messages I have been receiving from investors in TATF indicate that none of them are happy with this company, all are concerned about its status, and none are getting any "cashier's checks" nor even reports about the condition or maintenance of their trees. That post is fiction. It is a perfect mirror image of the actual dilemma faced by investors in TATF trees.
As has been true for several years now, investors are not receiving reports about their trees, and the company is not responding to their requests for specific information. The contents of duped's recent post do not apply to any other investor who is in touch with me.
This is what the TATF office tells a current tree-owner who demanded answers as to why the company website promotions are false:
This from Andres Fonseca of Tree Owner Relations, and, of course, signed "warmly", the same sign-off Steve Brunner used for years when giving his spiel in his lengthy emails: "The timing of when we begin the thinnings again will depend directly upon when either we have obtained the necessary capital to acquire, install and operate the value adding processing and production machinery and the volume value adding processing, production and sales are up and running, or when the lumber market improves, whichever occurs first. At this time it is not possible to know when either will occur."
In other words, we need more money from our promotions before we can carry out the implied promises made in our projections on our website. Sound like Ponzi?
This is a far cry from what duped is posting about his successes with TATF and it appears to be conditional upon this company "raising more capital", i.e. selling more trees to misguided customers..
Readers can see for themselves by perusing the posts in this forum - particularly prior to the involvement last spring of dupedbysteve which had the effect of spamming the contents as he posed as a happy investor following receiving a refund for his purchases.
Tree owners are in touch with me at jstanton5@gmail.com so that we may continue to gather accurate information about experiences with TATF. I will share information with all legitimate tree-owners who contact me.
Also, readers may post free on this premium forum on Fridays between 4 and 5PM Eastern.
belmontx
Eureka!! I bought 2000 more trees from TATF! I am splitting them with family to help with college tuitions.
TO ALL NEW INVESTORS-NO ONE INVESTOR HERE HAS BEEN PAID ADVERTISED PAYMENTS FROM TATFs, WE HAVE MORE THAN 70 investors here on IHUB and NO ONE HAS REPORTED OFFICIAL projected distribution. For all it is worth I can say stay away from TATFs it is a SCAM. It's been nearly 20 years since the first stands were planted.
The owner is fleecing investors so far. Owner has bought land with your money and is benefiting handsomely. Investor concerns emails and phone ins are being ignored or severly delayed,or false assurances that the adverised payments are coming soon Sure! Right!!! BS. Investor beware.
New Investors! TATF has just sent me a report on my trees, with pictures and assessment of their progress. For those that are interested they are doing just Great! The professionalism involved has me thinking i am very lucky to have selected TATF and Steve to be caretAKERS FOR MY TREES. i have looked over the track record of TATF and they have a super treeowner relations. The assessment says i am on par with other treeowners to have a superb payout in the future!
In looking at other such opportunities i see that the other farms are woefully short on their projections of profit compared to TATF. These non-TATF farms are run poorly and do not value add for profit in the trimmings so are a very poor investment.
I suggest that my experience is typical of TATF and a great testimonial to follow to profits!
If you notice most longtime tree owners are now getting their reward in the form of cashier checks for being with TATF through many years.
I will be going to visit my trees again and again to see beautiful costa rica.
Agree completely with bfl. Sorry, 4rtrees, my email address was entered incorrectly. It is jstanton5@gmail.com. You can reach me there and I will respond promptly.
I encourage all investors to email me with any developments concerning their attempts to communicate with TATF and any results they may have had. I will send regular updates consolidating this information for all who are in contact with me.
Thus far the situation remains as it was at the end of last year; no reports that we have heard about from TATF to tree owners of any maintenance, thinnings, nor harvesting of trees. This silence is in its fourth year. In spite of this the TATF website promotions continue in much the same form they were when buyers sent them money ten and fifteen years ago. Investments appear to be in great jeopardy, with no credible reports of any activity on behalf of trees purchased. False advertising, at the very least.
As bfl warns, stay away from this company.
belmontx
Belmontx I need to communicate with you ASAP. The address you posted of jstanton5@google.com does not work. It comes back as "mailbox disabled". I have tried twice. This is URGENT! Please respond with another way that I can get in contact with you, possibly today. Thanks.
Tree owners unable to get information from this company. The situation is going into its fourth year. For example, bogstomper (a frequent poster on this forum) posted this on another forum on 2/11/2011::
"Looks like nothing has really changed!!
Has anyone heard if there is any thinning going on on the farms in this dry season?
Not really a sign of a well run company that investors have to resort to a discussion form to get info on their investments, and boy is that info dodgy! (what was all that about tatf selling the farms?)
I have being trying to contact the farms by email, and phone to see what is going on and nothing.
I have repeatedly sent emails requesting that my trees be thinned at MY expense and have had the following responses:
I emailed TATF on the
19th feb 2010
13th April 2010
14th May 2010
1 June 2010
2 July 2010
5th July 2010 got a response saying that there was a TON coming out soon and to get back in touch after I have read it and see what I wanted to do.
I responed on the
30 July 2010 asking to tell me how much it would cost, no response so i emailed again on the
21 Sep 2010
22 dec 2010
21 Jan 2011
That is a lot of silence! with me offering to send funds to them to thin my trees for the good of the remianing trees.
Very difficult to feel comfortable with this investment. "
Go to http://www.ic3.gov/default.aspx to report the details of your experience with TATF. There is no evidence from any credible source that anything has changed since the post cited below. Planb made many posts on this forum subsequent to this one, some as recently as three months ago. Readers are encouraged to review these, as well as the others' posts made prior to last May when one poster received a refund and began spamming this forum to the point it was closed as a free exchange. Virtually all the 100+ investors recorded here have had the same disappointing experience.
From planblotrade, post #346
"I am a tree owner with TATF and I have visited both my trees and other "Show" trees. My visit was troubling, and I have befriended two other fellow tree owners that have visited. Their visits have also been troubling as well.
While I did not enter into this venture for a quick return and recognize many of the hurdles involved, I am troubled by the lack of information available from TATF. I would be much more accepting of the things that Steve is trying to do, if he was more forthcoming with specific information. For instance, I am troubled to find out that it has been 15 years for some owners and they have no distributions, and they have no realistic estimate of distributions. It does not appear that I will see any distributions.
When I visited the farms and inquired about the piles of rough cut 8 yr old teak laying rotting on the ground by the trees he said that he believed in using everything. Only shortly later did I realize that it was someones' thinned teak awaiting and awaiting...
I do believe that Steve Brunner likes to keep tree owner from comparing notes as it can only lead to additional negative information regarding TATF. Check out the IP address registrations some time. Steve Brunner owns many 10's, or hundreds of domain names with almost every conceivable variation of tree farms, and teak plantations, .com, .net, .org, etc. Make no mistake, Steve Brunner is in a business venture for himself first here, and he has no priority in making sure owners meet the projections on the web site, either by total bd ft/tree or by total $$. His only promise is that the trees will planted, cared for, and permitted to grow for 25 yrs.
After my visit to the farms and follow up emails to Steve, he informed me that he had fired all 3 employees of TATF that I had dealt with for the visit. This was all troubling..."
Right no repurchase agreement--- but Brunner broke nearly every item in the agreement,no projected distributions ,incomplete thinnings,stunted growth rates, poor soil,unmaintained trees,just to mention a few,crime on the farms!----All of this years before asking Brunner for refund .
I have made 4 trips to Costa Rica
Our trees, and all that we saw, were growing very well and had been well cared for.
Please speak only for yourself--not others on this forum; I speak only from my personal experience as a current, and one of the original, tree owners of both thousands of teak and hundreds of 9 native species.
You are no longer a tree owner, and made the 2 decisions to sell your trees--your responsibility, not TATFs!
So you signed a legitimate tree owner agreement to purchase?
And, it had no re-purchase agreement.
TATF did, in fact, buy back part of your trees?
And YOU DID SELL THE BALANCE at a fraction of your purchase price?
The questions were not answered.
How did "belmontx" and son Brad, "justcfrall" lose money that was the fault of TATF?
We have received distributions in the form of both credits and proceeds.
The credits for thinned teak and native lumber allowed purchase of additional teak trees.
Our proceeds were hard U.S. Dollars for teak lumber which we sold--the shipment pictures are on the TATF web site.
AB thats easy Brunner stopped payments-- and communication after 2 years of promising to repurchase our trees TOTALLY STOPPED COMMUNICATION after 100s of emails and unanswered phone calls even trips to CR unanswered visits/pleas.IT IS A LOSS.
TATF is a SCAM !!!!!
Nothing has changed for those who bought Tropical American Tree Farm trees. Do not be deceived by those who log in as spokespersons for the company while purporting to be representative tree owners. For three years now they have not been receiving answers to their questions, nor reports on their trees' maintenance, nor any sign that their investment is viable. It appears that they never will.
As an example, bfl's recent 1/10/11 post is quoted below:
"I and several of my friends purchased some of the oldest teak trees that TATF has ever offered. As of yet none of us have received any payment from TATF for 1st or 2nd thinnings. There is no way that I believe that there are piles of letters from people who are so happy with their return on their investments. My friends and I have to be very close to owning trees as long as anyone has. Our empty pockets are still hoping to be even partially filled by a payment from TATF. My pockets would sing with joy and make me get on here and write about receiving money from TATF. Instead my pockets are still empty and I am writing out of hopelessness and despair. So far, after almost 17 years of being involved with TATF, I have to say that this investment is a total bust. If any new investor is thinking about buying trees from this organization, do your homework. Read the entire amount of posts on this site. You will know the true story. I do not own another tree farm and only wish for the success of TATF. So far TATF does not look anything like a successful company for anyone but the owners."
How is it that money claimed lost was due to TATF?
It has been said here that "belmontx" lost money yet was never a TATF tree owner.
Further, his son Brad, "justcfrall" bought his trees with HIS "hard earned money".
He later sold part of his trees back to TATF--for at least what he paid for them, and the balance to "marc from pittsburg" at a fraction of their purchase price.
Please explain to the readers of this forum how any losses were the fault of TATF?
TATF is anything but an upstanding company and they have deceived investors by their statements on their website.
For some time they have not responded to tree owner inquiries. Just and I are former tree owners who lost money from this scheme. Read the 70+ posters on this forum (virtually all of the posters who communicated here for three years before duped - a company spokesperson - spammed the forum out of its free status) who have been taken in by investing in TATF and are angry and betrayed.
The previous post is an attempt to intimidate present investors so as to keep the money coming in.
belmontx
A site for teak prices in Costa Rica.
I recently came across a site for teak prices in Costa Rica.
Costa Rica Teak Prices
This is put out by a trade association of teak growers in Latin America.
The prices are in US$/m3, using the hoppus formula. The hoppus formula underestimates actual volume by ~ 20%, so the price per actual cubic meter of wood is 25% less than the numbers quoted in this link.
An example of Costa Rica pricing for teak logs 2.2 to 12 m long, 100-109 cm in girth (equivalent to 32-35 cm in diameter) is
$355/m3 for standing trees.
$372/m3 for logs cut but not loaded into containers.
$390/m3 for logs loaded into containers.
$455/m3 for logs FOB in an international port, such as Limon.
The price/m3 for smaller logs is much less. For example, the quoted price for logs 50-59 cm in girth is $210/m3 for logs loaded into containers.
A1
TATF is one of the most secure tree owning opportunities there is in timber farming. We have a wonderful owner of the properties who goes out of his way to ensure all of his treeowners will turn a handsome profit. Just look at the TATF website and you will realise what a wonderful buying opportunity this is! Look through this forum for SBrunner postings and you will know that this man and his family have studied hard to make his farms a success and enrich us all!!!!!
I met with him just 6 weeks ago, he is honest to a fault and i wish everyone could get to know him.
TATF a black hole for existing tree owners who sent money, yet it is still advertising for new ones on its discredited website. As for owner Steve Brunner and his Tropical American Tree Farms we will have to rely on first hand reports from those traveling there or privy to verified information.
I mistyped my email address in my prior post. This is the correct one: -- jstanton5@gmail.com Hopefully we will get those reports in the form of emails to me which will be distributed to others interested.
The other forum devoted to TATF on Ihub turns out to be of limited value. because it is a a semi-private sounding board for the moderator who is none other than dupedbysteve. It is censored by him. Note all the deleted messages. The moderator has a point of view opposite that of all the other posters and he has posted half of all the messages on this board while deleting those he doesn't like.
No one knows who "dupedbysteve" is, or who he speaks for, but he seems to be representing TATF's owner. If you go back to his first messages on this board-- those he made during May of last year -- he seemed to be like the rest of us, a duped investor. Then he got a refund and the messages (under his name, but authored by perhaps someone else) gradually became more and more bizarre. Now he has his own hub forum.
Here is an example of a post he deleted: "Why didn't you agree to meet 4rtrees when you said you would be in Costa Rica during January and he was going to accommodate his schedule to see you? As noted in the other ihub board he is another betrayed investor and by meeting him you were could have allayed his doubts if what you had been saying about TATF were true. See rhtrees' January posts."
Here is an example one of the limitless posts duped puts on his own forum: "I was reading the (TATF) agreement and i don't think a lot of treeowners noticed the #23-25 part of the agreement. They explain that word of mouth does not mean anything and neither does the TATF website.. Steve has only to abide by what is written in my spanish written contract. I knew that. I signed it because TATF is going to make me money."
The TATF investment has been a failure for all who believed in its promises and sent them money.
Posting on this board is free on Fridays between 4 and 5PM.
belmontx
Hub Forum options for TATF investors. Do not give up the opportunity to correspond with other bilked investors. Knowledge is power. Resolution will come, someday. Until then there has to be a communication link.
For those interested in continuing to share facts and experiences and opinions regarding their investment in TATF contact me at jstanton5@google.com.
Write what you would have posted on this forum. I will compile your messages and share them weekly by email with all who have contacted me. In this way we can continue to have a platform for investor communication and for the planning of later resolution.
Also, there is a TATF forum at Simple Machines http://tropicaltreeinvestmentforum.com/index.php?topic=3.30
Otherwise, dupedbysteve has started his own forum on http://investorshub.advfn.com/boards/board.aspx?board_id=19916
If you can put up with his pretended support for TATF you can post your comments there.
]Also, note that this board is available to all at no charge on Fridays between 4 and 5 Eastern time.
belmontx
TATF investors if anyone visits their tree's on the TATF farms post what condition they are in? Also post here if anyone has received any thinning report or harvest proceeds so far nearly all investors here have reported getting nothing.
Is Mr. Brunner still in business with his Tropical American Tree Farms? Or has he scurried away from all scrutiny and let his elaborate website be the curtain behind which the Wizard of Oz hides.?
Investor visitors to the TATF tree farms in Costa Rica have found no discernable activity and the owner has been unavailable to them despite their repeated attempts to contact him. There are strong suspicions that this operation is in permanent suspension and investments are no longer valid. Note two posts from 4Rtrees on this board. First his #1667 from 2010:
"I was recently in CR and tried numerous times calling their (TATF's) new offices, supposedly in Escazu (and new number also). I talked to a woman who spoke very good English, Maria, and asked her to provide me some information (directions to their new offices for one) plus I wanted to make appts to see my trees. She said she would get back with me asap and never did. A week later I called again. She put me on hold, then returned saying I need to talk to the manager but he was on the phone and he would call me right back. I waited an hour. He never called. So I called them back and you know what, mysteriously enough, there was NO answer. I called 3 more times that day and on the third call, I get their message machine. I left a message. Next day I call again, 3 times, I only get the answer machine and left another message. This is pure BS folks!
So I knew where my trees were located and remembered how to get there and I made a surprise visit to that TATF farm. I speak Spanish and talked to the farm hand living there. He has lived there for 5 years. He tells me there has been NO work on that farm in nearly a year. Nothing. Zilch. Nada. No thinning, no maintenance - nothing. And it clearly looks that way also. This poor guy and his family are hurting alot more than we are from this."
Later, in 4Rtrees's post #3233 three weeks ago reacting to the forum member, duped, who ultimately helped disable this board with his spamming, he says:
"I have no reason to make false statements or accusations on this Board. I am an investor of trees (since 2000 with 96 & 97 trees) with TATF, who very much wanted for them to succeed, but still have received NO return on my investment as projected, thinning reports since 2006 or any other info regarding my investment. If you would have asked me back in 2007 (when I re-invested) if I thought this company was credible and a good investment, I would have said YES!. BUT, this has changed – immensely . Similarly, older, outdated posts have been brought forward on this forum, advocating TATF – example being Ohio lawyer. Why have these happy investors NOT posted any new, recent information of their returns and satisfaction?
"As I have said, I have tried numerous times to make contact with TATF in 2010 to go see my trees (I have yet to see the ones I purchased in 2007) or to visit their new offices , and possibly see their new equipment they claimed to have purchased. I would have been ecstatic to have had the opportunity to do that and boldly come back on this Board and make an exciting, positive report – in their favor. Why could they have not given me the minimum of their time to do good for them? Makes no sense…. whatsoever. No one, including Mr. Brunner, can be THAT occupied, especially to put out this “wildfire” which he himself feeds through his negligence to communicate with HIS OWN investors. And isn’t that what staff is for – assistance?
"Why, Mr. Duped, do you not believe I was in CR and made the calls as I stated. I have not the time, nor the desire, to conjure up lies and untruths, and make foolish comments or argument on this forum. I have only stated facts regarding my most recent experience with TATF, and that I have well documented.
"But, let’s put all of that aside……. It is “water under the bridge”. History. The past. Let’s start the New Year anew and in a more positive light!!!! You say, Mr. Duped, that you are going to CR to purchase trees in Jan 2011? Is that correct? Are you meeting with TATF staff, going to their office in SJ, or, being that you are such a HUGE promoter and advocate of TATF/Mr. Brunner, meeting with Mr. Brunner himself? When exactly is this to occur? I would very much like, and appreciate, the opportunity to meet you and to be updated by TATF staff as to the current state of affairs with the company. I will be in CR for an extended period of time and am flexible to your schedule. Please let me know where and when we can meet. I come in peace only to witness the truth. And, will be more than happy to report back to this forum my positive findings. "
Need it be said that this message was never responded to? Duped ignored this opportunity to validate himself as an authentic investor for obvious reasons, and shortly later this forum became available for paying premium customers only. The forum voice of the real investors has been stilled. TATF wins.
Investors can report their experiences with TATF and file a formal complaint at: http://www.ic3.gov/default.aspx
There are only betrayed investors in TATF. Followers of this forum know that there are no happy investors. Three years of postings have left little doubt.
Violations of rules for this exchange board, including countless spams by duped, have apparently caused it to be disabled for all new entries (unless we pay 100 per year for premium membership). It is to be hoped that all potential investors will find the postings on this board and see this investment for what it is, a black hole. Seventy-four disappointed and betrayed investors have posted on this forum. Virtually every one during the three years of forum activity has been critical of TATF, with the few exceptions being in the person of a contributor who uses different names, his latest being you, "dupedbysteve," and who would have us believe you are only a "recovered" tree owner. Attempts to arrange a meeting with you during this month, when you said you would be in CR, have failed as did attempts to meet with you while you said you were in Madrid and Monaco several weeks ago (see postings). You are not who you represent yourself as being.
Below are listed Tropical American Tree Farms' previous voices on this forum, in order of their appearance (doubters may read their style and content to confirm). Very little duration date overlap occured (only the nine days for #1 and #2, and the recent brief reappearance of ab):
1-sbrunner; 2/17/07 to 3/20/08 - 64 posts
2-happiest tree owner; 3/11/08 to 4/09/08 -13 posts
3-ohio lawyer; 4/17/08 - 1 post
4-fjonas; 10/24/08 to 10/27/08 - 13 posts
5-happy tree owner; 5/4/09 to 7/9/09 - 6 posts
6-abnrgrrvn; 7/9/09 to 8/9/10 - 142 posts
7-dupedbysteve: 4/11/09 - present -433 posts
These are very likely one and the same person. No one else has reported anything at all to show for their money sent to TATF, some for trees as old as 17 years. This is a deception of the first magnitude.
Iroco is not teak.
Using Iroco in comparison to teak is intent to deceit.
Iroco aka African teak has nothing to do with Teak sp. Tectona Grandis.
Iroco is wood that is named African teak from traders that try to convince people into using it instead of Teak in boat and furniture building at lower price rates. Iroko is the utility lumber of the tropical hardwood species. A durable wood, it is largely used for non-decorative purposes, and the oily texture indicates its usefulness for boat building and pilings.
Iroco use as a replacement for Teak is a fools engagement.
Teak (Tectona Grandis) and "African Teak" Iroco (Clorophora Excelsa) are two different trees with excessive different characteristics and prices.
In fact in England Iroco es forbidden due to its carcinogenic characteristics.
You can buy Iroco fully finish for flooring for around $2.25 per board ft.
If you are really curious for what Iroco is mostly used check:
http://en.wikipedia.org/wiki/Txalaparta
About the increase of sales of Iroco, I suggest you read the news about the situation in Ivory Coast and Cameroon from where most of the Iroco comes from.
I and several of my friends purchased some of the oldest teak trees that TATF has ever offered. As of yet none of us have received any payment from TATF for 1st or 2nd thinnings. There is no way that I believe that there are piles of letters from people who are so happy with their return on their investments. My friends and I have to be very close to owning trees as long as anyone has. Our empty pockets are still hoping to be even partially filled by a payment from TATF. My pockets would sing with joy and make me get on here and write about receiving money from TATF. Instead my pockets are still empty and I am writing out of hopelessness and despair. So far, after almost 17 years of being involved with TATF, I have to say that this investment is a total bust. If any new investor is thinking about buying trees from this organization, do your homework. Read the entire amount of posts on this site. You will know the true story. I do not own another tree farm and only wish for the success of TATF. So far TATF does not look anything like a successful company for anyone but the owners.
Last-week talking IN Person to-the-Owner of TATF,Steve Brunner, I was Astounded at the piles of letters written to TATF all expressing great thanks for being involved in such a well run enterprise. I read dozens of letters that spoke of their cash returns from first and second thinnings. I was just blown away by pictures of the farms themselves, how uniform and impressive the trees looked! I saw no evidence of flowering or seeding in the overhead views. Most of the trees, 95% or more, were tall and straight!
I was struck by how this differed from my earlier assessment while i was relying on sources that i now see were so badly misinformed.
I am more than confident to become an investor based on the 2 hour talk with Steve Brunner, the pictures and most of all the letters that i was able to corroborate as i am now getting many replies back from my queries to those who left their e-mail addresses. Many of those replies indicated they had returned multiple times to Costa Rica to assess the progress of their trees and expressed great satisfaction at the way they were treated by TATF ticos and the condition they found their trees in.
All i can say is that i am anxiously counting the days until I become a tree investor and see My trees!
Honest John!
TATF has become a scam, by any definition. The archive link below is to Tropical American Tree Farms website on Nov. 30, 2001. Examine the projections and compare with your results. To the present the website presents false information to attract more investment.
http://web.archive.org/web/20011201234444/www.tatf.com/htm/main/projections.htm
To see Brunner's website at different points between 2001 and 2006 go to this link: http://web.archive.org/web/*/http://tatf.com
These reveal the false advertising and duplicity employed.
We have had posters on this board who bought trees as old as 1993 and have not received a single distribution, and have received no communication or reports since 2006. In spite of what the alias says, this company is dormant except for its internet sales pitch on the TATF website.
TATF continues to post knowingly false projections on their website. This is an attempt to lure unsuspecting investors into this failing investment. The projections have not been met by this company and investors continue to have empty pockets because of this. Do not be taken in by these false projections. Read all of the posts on this site and you will see the true story. I am not an owner of any other farms and have no desire to see TATF fail, but that does appear to be what is happening. I have been a treeowner since 1994 and still have not received one penney back from this investment. Please do your homework before you invest with this company.
http://www.istf-bethesda.org/specialreports/teca_teak/teak.pdf
All you really need to know and want to know about prunning teak, growing thinning and harvesting!
This is a fine website for beginners in tree investing in forrestry. The tree news comes out quarterly. You will also find the Sbrunner postings to be invaluable as you come to the conclusion that nowhere else can your money be spent more wisely than with a solid professional operation like TATF.
TATF has exceeded oner 2900 treeowning investors expectations of this great company and has been a pioneer in innovative leadership in the treefarming community!
The TATf company has never failed to answer my questions with timely fine answers.
The history of TATF, under Mr. Brunner, has been to project/predict everything and deliver nothing. From the year 2000 when the first thinning returns were projected for investors he has failed every projection he made. When he posts clever revisions on his website, and when he used to respond to investor emails, there was always a reason things were delayed "briefly" -- Raleo, waiting for new equipment,world markets, weather, labor failures, bad posts, etc. -- but always things will be better very soon (next year). Now that he doesn't respond to disappointed investor emails he has dupedbysteve making all these promises/projections for him. Don't believe a word of it.
This may at one time have been intended as an opportunity for others, but it has morphed into a black hole for investment and the owner has become either supremely incompetent and ignorant, or a master of deception.
Tropical American Tree Farms is still trying to suck up more investments from innocent, believing people. We can only hope they read the testimonials of actual investors here before sending this company any money.
TATF raising prices does not mean they are in good shape!
A company in good shape would respond to investor emails and phone calls! TATF does neither over the last 2 years, how can you call that a well run company? and that has been verfied from many tree owners on here!
For a company that does not return emails/calls I would not take tatfs word!why are they not offering contracts in spanish if english in not valid!
if you are buying trees why have you not responded to 2 tree owners requests to meet up and verify who you are? and that you really are a real investor wanting to buy trees!
TATF is doing every investor a great favor by planting teak as it holds more than 50 pounds of carbon per tree. This according to "trees for the future". But everyone.. in the new tree owners news TATF states they will soon raise prices!!! This is actually great news as it clarifies TATF is in good financial shape and investors money is safe in Steve's well experienced hands.
TATf has already purchased state of the art moulding equipment and is starting production!
TATF will become certified prior to final harvesting, I'm sure of that i believe!
The good news that most investors dont know is that teak is a good coppice species and after final harvesting, Taft will benefit by having saved initial expenditure for subsequent reforesting, as well as having had the land paid for by investors.
According to ITTO, Teak demand rose in the USA substantially(doubling) between sept-09 and sept-10!
I seem to recall Steve(TATF) saying it did not matter to him if contracts were in english, he would do every investor right, not to worry.
yes if tatf was fsc certified it would help greatly and more importantly in the future. Most of the big forest companies here in ontario already are certified. This will affect more then just teak, all wood species.... for me to export softwood from canada to europe some companies are already demanding the wood be fsc or will not buy the wood. I heard home depot is considering that to. But there a problem with that, tatf would have to open up there books to get certied................thats probably why they have not done it.
Forest Certification? I just read the book Collapse, by Jared Diamond. In it he talks about deforestation as one of the prime causes for societies to fail. "70% of all wood cut in Indonesia comes from illegal operations.", page 471. To combat this, companies such as Home Depot and IKEA will only buy wood from "certified forests". Is TATF a certified forest? Would it make our investment more valuable if TATF were certified?
I have been contemplating for what I would purchase teak. It would be nice to use teak for shelves in the bathroom, where it is possible there might be long-standing water. I used oak for this and recently had to spend many hours sanding out a black mark. I did not use teak for this because here all we can get is furnature grade teak. Perfectly straight, beautiful grain, etc. Such perfect wood is overkill for much of what I do. a) It would be nice if a store like Mills Fleet Farm handled teak, b) What about teak picture frames and molding? c) flooring, d) charcole (perhaps the branches could be used for this, e) sell the growing trees for carbon credits. What I am suggesting is that TATF, and us, might make more money if TATF sold the trees in many forms rather than just as raw teak.
Fantasy tree maintenance. Wonder why none of them are posting here and giving us their specifics. Why are you not giving us the specifics? It would turn around this whole discussion, but it isn't, and hasn't, happened. Wonder why.
Can you show us where us demand for teak is rising? According to ITTO Teak prices have been between 350 and 500$ per meter cubed or around .90cents per BF.
Some Wonderful answers were given me by the owner of TATF(tropical american tree farms) that has convinced me to double the number of trees i will be buying from his farms in 3 weeks. I was very harsh and demanded precise answers and Steve(the owner of TATF) more than answered with candor and statistically proved to my satisfaction every projection the TATF website has.
I was given to read while i was there multiple upon multiple letters of tree investors who have received thinning reports and investor tree owner payouts and have agreed to allow TATF to give as bona fides in references so that new investors might inspect the TATf claims.
I am reading that Iroco(african teak) is climbing in price and demand in europe, that USA Teak demand is climbing swiftly and the price of teak in the USA has climbed substantially in the past year!
K, everyone - last warning - your choice going forward whether this stays in the free zone or gets moved to Premium.
99% of what you need to know about posting on this site can be found by clicking on this link:
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I posted earlier that duped's latest message that the culling won't pay for maintenance of investors' trees implies that aforesaid maintenance is not going to be done; this even though it was advertised on the TATF website in order to attract investment. I went further to say that duped's/Steve's failure to respond to meeting offers from fawtsc or rhtrees (at locations he, himself, said he would be) constitutes a final loss of credibility for him.
My post got deleted. I am watering it down in this version.
Let's have it clear:
Some trees do exist. As in many scams you need to have lemons to make lemonade.
This does not mean that all the trees do exist nor all called lemonades have lemon.
Some employees claim that not all 2006 teak sold do exist.
The persons who made the statement seemed to be familiar in tree relations and the other as a forester.
Let's call them I&J were adamant to prove it, specifying some planting areas, where the encounter discrepancies while dealing with people.
It was shame that they were very afraid to officially to come fully forward.
But there is caveat, it is called Whistleblower protections and 30% reward for the individual who helps uncover a fraud.
Here is where it starts to get interesting.
More on this later.
The next obstacle was when TATF refused to allow to visit those areas specified by I&J by an expert.
AS of today, there is no possible way to reconcile what each tree sold do actually exist.
Now comes the real culprit that makes TATF stink to scam: money.
Add to the mix the prior statements of I&J, the experience of many people with 1996 teak (and many other plantings)we have not received a penny, since the claiming of a first thinning 7 years ago for the 1996 teak. This past year should have been the third thinning report and check, and nothing has appear, no a report empty words from the office on the status, nor a single call back about it or an email with the reason while the trees are not been managed.
With all those faults coming from TATF, it does seem obvious that we are confronted with something more than just mismanagement.
Those are top three reasons to think that the Brunners have put a fast one here, and passing it along to his kid.
Time is the judge of all.
In time crooks get caught, in time the honest get rewarded, and the liars fall prey of their lies.
TATF so far is a big lie, no far from a financial scam, but I leave this to the appropriate agencies to determine.
EVERYONE:
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How do you reconcile that the trees exist, the farms exist with this being a scam? If returns on a final harvest are never made(the culling byproducts do not count as such)If TATF is a not a scam as i believe it is not, then this is not a ponzi scam, a madoff scam but an honest man who has been hit by the world wide economic downturn of credit.
I believe however when it comes time for harvesting TATF trees, Steve will get the credit necesary to harvest. Culling does not bring in enough cash money to keep workers necesary to do the work on older trees(more than 7 year old.) It does not bring in the money to clear underbrush,etc.
Threats, insults and vulgarity are a violation of the TOS, and will be deleted without further warnings.
A1
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I created this board to discuss investing in timber. In particular, I recently purchased some 10 year old teak trees from a private company called Tropical American Tree Farms (TATF), owned by Steve and Sherry Brunner, and located in Costa Rica. The company will grow, harvest, process the trees into lumber, sell the lumber, and send me the proceeds.
Based on my calculations, buying 10 year old teak trees at the offered price is a good investment (IRR >20%). However, buying seedlings, which is what TATF usually offers, looks like a much less promising investment.
This board is for anyone who has comments on or questions about investing in timber, either in general, or specific opportunities. I would be particularly interested in any comments (pro or con) about TATF.
Update - August 3, 2009
Important Note: All statements made by me in this Ibox, and in any posts I make on this board, should be taken as my opinions only, not statements of fact. I am not an investment professional, or an expert on timber or trees.
Some additional information about Finca Leola has come to light. See post 1270.
Update – June 14, 2009
Important Note: All statements made by me in this Ibox, and in any posts I make on this board, should be taken as my opinions only, not statements of fact. I am not an investment professional, or an expert on timber or trees.
In the 14 months since I last updated the Ibox, TATF has modified their projections such that they no longer include proceeds from Raleo, their sister company that makes furniture using TATF wood. Unfortunately, TATF’s return on investment projections for purchasers of their trees still project returns that are substantially higher than those experienced by those who have purchased trees from TATF in the past. Many TATF tree owners have received no return on their investments at all, despite having purchased trees as long as sixteen years ago.
Other tree farms that have the same business model as TATF (Finca Leola, Samson Tropical Trees) have also either reduced their return on investment projections or removed these projections completely from their web sites.
So, from an investor’s point of view, the $64,000 dollar question is whether buying trees from any of these tree farms is a good investment. In my opinion the answer is ‘probably not’. As far as I know, tree farms such as TATF fall in one of two categories - those that have under-performed to their projections and have proven to be poor investments, and those that are too new to have a track record. I have heard some good things about Finca Leola, but, from a financial standpoint, it falls in the second category – too new to have a track record.
It seems to me that the fundamental problem with all of these operations is that those who buy trees from these tree farms are paying retail prices for the trees (~3X to ~ 5X the tree farms’ cost), but will probably have to sell the wood from their trees at wholesale prices. It’s difficult to make a decent return in such a situation. TATF and some other tree farms do have related companies that use some of the wood from their trees, but, as far as I know, none of these tree farms guarantee that their related companies will buy tree owners’ wood, or what price they will pay. As such, it seems unwise to count on wood purchases by these related companies.
The current wholesale market price for teak, in the form of logs, from Central and South America, appears to be ~$0.50 to ~$1.00 per board foot, depending on the age, size, and quality of the logs. Most of the demand for Central American teak appears to be from India, in the form of round logs or rough square logs (i.e., logs that have been squared off). I estimate, based on the tree prices charged by the tree farms, and the above prices for teak, that the inflation-adjusted internal rate of return from purchasing teak seedlings from a typical tree farm will be around 5%, assuming the tree farm is well managed. The returns from purchasing seedlings of other tree species may be higher or lower, but carry substantially more risk , as the techniques and requirements for growing these other species in plantations are generally not well known.
I found a site recently that has links to a number of tree farms that I wasn't aware of. Unfortunately, all of these tree farms appear to have the same issues that I discussed above. www.forestryinvestor.com/
It may make more sense to buy shares in a company that owns tree plantations. One such company I know of is Precious Woods, which is listed on the Swiss stock exchange, and therefore difficult to invest in for most investors. Another such company is Sino-Forest Corp, a Chinese company that owns hundreds of thousands of hectares of tree plantations in China. It is listed on the Toronto stock exchange (TRE), and the pink sheets (SNOFF.PK).
.A1
Update Apr. 29, 2008
Based on my own experience with TATF, and on what I have read on this board, there are a number of drawbacks to dealing with TATF. The main problems I have seen are:
1) TATF has been around for 16 years. In that time, the actual returns seen by those who have bought trees from TATF have been much lower than the returns projected by TATF.
2) TATF continues to project investment returns much higher than those experienced by past purchasers of trees. In particular, TATF continues to project that lumber from the seventh year, tenth year, and thirteenth year thinnings of teak can be sold for a substantial amount of money, even though they have been unable to sell the vast majority of the lumber from these thinnings.
3) TATF has been growing and selling tree species other than teak for many years, but they have provided next to no information about the growth rates, thinning schedules, or marketability of lumber from these other species.
4) The prices charged by TATF appear exorbitant. According to this link panamateakforestry.com/english/investments_teak/investment-oportunities.php , the complete life cyle cost per hectare of planted teak is $8,400. TATF charges about 5 times this amount.
5) TATF's growth projections for teak seem unrealistically high. See post 300 on this board for more information. TATF has not provided any meaningful information on their website about the actual growth rates of the trees they're growing, so it's not possible to determine the accuracy of their projections.
6) TATF doesn't seem well managed. When I asked about the size of my trees after a thinning, it took them a year to provide the information. Also, there have been reports that some of the thinnings are years behind schedule.
In addition to TATF, there are several companies that will grow tropical trees for investors. Some that I have found are:
Finca Leola http://www.fincaleola.com
Samson Tropical Tree Farms http://www.owntropicaltrees.com
Kauai Tropical Timbers http://www.kauaitimbers.com/
All of these companies appear to be similar to TATF, in that they charge high prices for trees, and provide overly optimistic projections, especially as regards to the expected returns from early thinnings.
Three companies that provide more modest projections of rates of return:
Futuro Forestal http://www.futuroforestal.com/ This company sells both trees, and associated management, and the land the trees are on.
Precious Woods http://www.preciouswoods.com/ This company is publicly listed on the Swiss Stock Exchange.
Panama Teak Forestry http://panamateakforestry.com/ This is a private company.
Precious Woods and Panama Teak Forestry offer a way to invest in a company that’s in the tree farm business, rather than buying trees from a tree farm. Their websites also contain substantial information about tree farming.
All of the companies listed here, with the exception of Kauai Tropical Timbers, are located outside the U.S. Anyone who does business with these companies will have little or no recourse should problems occur. Also, investments in these companies (with the exception of Precious Woods and Quadris) are likely to be very illiquid.
A few links:
http://www.globalwood.org/ This link (courtesy of fawtsc), is a site that has a great deal of information about the global timber industry, as well as ads to buy and sell lumber.
http://www.fao.org/ The United Nations Food and Agriculture Organization. Do a search for teak.
http://www.freewebs.com/mueblespremium/offers.htm This link is to an Ecuador-based company that will provide automatic price quotes for several species of tropical lumber.
www.panamaforestry.com/GTI_Teak_information/Teak_Plantation_investment_controversies.htmThis link provides some information about controversies related to teak plantations.
http://www.treemail.nl/teakscan.dal/files/traders.htm More information about companies who have taken advantage of unwary investors in teak plantations in the past.
http://www.fao.org/docrep/x4565e/x4565e05.htm#TopOfPage This article discusses problems with teak plantations in India
http://www.rug.nl/staff/l.spierdijk/ATT00106.pdf?as=pdf This article discusses the poor track record of tropical timber investment funds
http://www.cifor.cgiar.org/publications/pdf_files/Articles/ASnook0601.pdf This link is to a paper that discusses the growth rate of mahogany in Belize. The increase in DBH (diameter at breast height) is about 1 cm per year. Over the typical 25 year contract term offered by the tree farms, mahogany would only grow to about 25 cm = 10 inches in diameter - below commercial size.
http://www.itto.or.jp/live/PageDisplayHandler?pageId=237 The last link is for the International Tropical Timber Organization's Market Information Service (it's free, but registration is required). The 1-15 Dec. 2007 report has some interesting information about the price difference between Asian teak and plantation-grown teak from Central America (the selling price of the Central American teak is a small fraction of that from Myanmar).
Be careful – it’s a jungle out there!!
A1
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