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Timber Investment In Colombia In Ever Higher Demand

10 Feb
timber investment in colombia

Timber Investment In Colombia In Ever Higher Demand

This Market Is Uniquely Positioned To Benefit From The Exploding Global Demands For Food And Fuel

Our planet is home to more than 7.7 billion people.

The United Nations estimates another billion in the next 10 years and a total of nearly 10 billion by mid-century. At the same time, the global middle class is expanding, meaning an ever-growing demand for food to feed all these families and for fuel to heat all these homes.

The UN’s Food and Agricultural Organization estimates that global demand for food will double by 2050. Same for fuel.

Rising CO2 emissions are acknowledged by scientists and researchers to be the main cause of climate change, and the world is has taken notice. The calls for a shift to renewable energy mean biofuel crops are in high demand. And, while many governments around the world begin to figure out the cost and price of carbon, sequestration forests are becoming an income-earning investment rather than just a planet-saving one.

It’s not only the growing demand for food and renewable energy that will depend on agriculture in the modern world. Other agricultural products, including wood, paper, and rubber, are all also likely going to be in higher demand in coming years.

Advantages Of Agro-Investing In Colombia

The agricultural prospects in Colombia are huge. This country has 17 million hectares of land suitable for agro-industry, of which currently only 2% is being used.

The business climate in Colombia is good and getting better. The World Bank’s Doing Business Report ranks Colombia first in Latin America for ease of doing business and for investment protection and stability.

An investment-grade credit rating from the top three credit-rating agencies and free-trade agreements with 50 other countries suggest that investments in Colombia are not only wise, but secure, too.

Best Long-Term Option Is Timber

Perhaps the best long-term option in agro-investing is timber.

Generally, food crops are harvested annually, meaning a return in the first few years. Timber, however, takes time… as much as 25 years for hardwoods like teak. However, softer woods can be harvested in as little as seven years for biofuel.

That’s not to say there’s no opportunity for cash flow until harvest time.

Intercrop sales can generate revenue in the years before harvest, and, as an added bonus, these intercrops can help the trees grow longer, thicker limbs. Carbon-dense biomass pellets can be sold to nearby power stations, and on-site beekeeping not only brings in early revenue but also ensures the local ecosystem is properly pollinated.

Of course, the real upside of a timber plantation is post-harvest. And full ownership of the land is crucial if you want to start over for a second planting after the initial harvest… or sell the land.

The beauty of a long-term timber investment is that one crop’s harvest recoups your entire initial investment. The drawback? One crop’s failure sinks your entire initial investment.

Farmland differs from traditional property investments in that, unless you farm for a living already, being an owner-operator isn’t easy. A jack of all trades but master of none can handle home renovations and management just fine. However, to grow trees, you need to be a professional. This isn’t the same as growing tomatoes in your back garden.

We’ve identified a leading player in the Colombia timber industry with more than a decade of experience that has planted more than 10,000 hectares in the last ten years.

To date, this timber company has been working with large investors. However, colleagues in Colombia have worked to put together a joint-project with this forestry group intended specifically for smaller individual investors.

The new timber plantation is 400 hectares. The minimum investment is 150,000,000 pesos (which is less than US$45,000 at the current exchange rate).

The projected rate of return is 16% over 7 years, and the minimum investment qualifies you for temporary residency and a work visa.

If you’d like to know more about this stable, long-term agro-investment opportunity, get in touch here now.

Lief Simon