OUR EXPERIENCE
THE VALUE OF VALUE ADD ON TEAK
A few months back we sold another container of our teak, 15-16 years old, from TATF farms.
The lumber ranged in width from 2" to 6," while the lengths were 18" to 72"; thicknesses were 2/4 to 12/4.
The container carried to the U.S. over 10,000b/f and the lumber was dried, dimensioned, and S4S.
The value-add by TATF/Raleo/TAH allowed the selling price per board foot to be slightly over $7.45.
This, to us, demonstrates extraordinary viability/desirability of the strategies to add value to all possible thinnings and harvests by making flooring, panels, sawn & rotary veneer, and dimensioned lumber.
We have been TATF tree-owners for over 16 years and own thousands of '93-'96 teak trees in 18 different fields on these farms:
Campo Real
Santo Domingo
La Esperanza
Rio Blanco
el Capital
In addition, we own 9 native species in 9 fields on Campo Real, Santo Domingo, and Rio Blanco farms.
In addition to my having made a number of fishing/vacation trips to both coasts of Costa Rica over the years, our family made a wonderful Spring Break trip to Quepos to inspect our trees on the farms where we met both Mr. & Mrs. Brunner.
On almost all of our thinnings, we had elected to take the thinning credit to purchase additional teak trees.
In addition to the above sale, we sold teak in another container of TATF teak, also dimensioned, to the U.S. for a similar price per board foot.
And we have received some distribution of thinning proceeds from TATF.
Currently we are satisfied with decision to temporarily delay harvests until the market improves or the value adding is fully under way.
As this is a long-term project and investment, we fully understand that that about 88% of the current-purchase projected net proceeds come from the final 3 harvests of Teak--none of which have yet been done!
We have found the Brunners to be most honorable people over the past 16 years.
Also that the value-add they are working on to help all tree owners in this economy is way beyond anything agreed to.
They should be commended for being so constant and persistent in this endeavor.
Construction volume affects all wood markets throughout the world, and new home construction in the U.S. right now is running about 20-30% of the 2005 high.
The bright side for the not-too-distant future is that there is pent-up demand in the U.S.
Japan has designated $50 billion for reconstruction after their recent disaster; China has announced plans to build 36 million low-cost homes beginning this year; and China and Chinese companies are investing about $7 billion per year in the Caribbean--all of which points to a very bright future for the upcoming wood demand.
That should be wonderful for TATF and all TATF tree owners.
