Friday, June 03, 2011 4:18:19 PM
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# ~~
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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.
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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 ~~
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 ~~
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