| Commercial Reforestation Opportunities in Yucatán, Mexico |
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| Whether or not ... you have any knowledge or experience in starting, managing or marketing a commercial reforestation operation, or, for that matter, planting even a single tree in your own back yard, it matters not. We are here to tell you that the opportunities to make a very substantial profit by planting tropical hardwoods in the Yucatán is an opportunity that few know about but a growing number of investors are turning to. Why? 1). The Yucatán is safe and it´s state government continues to invest in security, expanding infrastructure, and sustainable rural development. This translates directly into economic stability and growth, the so-called "crisis" notwithstanding. 2). The demand for tropical hardwoods is constant and increasing with a great share of harvested wood not only going to our northern neighbors but increasingly used for domestic consumption. For an entire page of great FAO reports on current and future trends on demand in global tropical hardwoods, Click Here.... 3).Because of increasing demand for tropical hardwoods along with increasing pressure on governments around the world to cut back and even halt ongoing destruction of natural forests, hardwood plantations are growing in number and these obviously require investment capital to start up and maintain through harvest and marketing. In the Yucatán, the cattle industry is on a steady decline for a number of reasons but overall and as a result large numbers of properties,small, large, and very large are going up for sale because ranchers report that they can no longer compete in the dwindling market. As such, vast tracts are becoming available, are at good prices and ready for alternative use including reforestation and other profitable economic activities which compliment and benefit the prime activity (in our case) of Commercial Reforestation. 4). The downside of most reforestation projects is that they are long term investments showing little major return until 18-20 years from planting. This is true for Mahogany and also, but perhaps slightly less so, for Spanish Cedar ("Cedro") which is thinned for substantial recouping of initial capital at years 8 & 12. 5) The major exception to the above long term delay in profits is the Neem tree which, as a tropical hardwood species, is a close cousin to one of the most expensive and highest demand tropical hardwoods, namely Mahogany (AKA:Caoba en Español).The Neem is an exception for a number of reasons also covered elsewhere on the site but for a brief introduction click here. Basically, Neem produces such a wide variety of harvestable raw materials, apart from strictly lumber, and grows so fast, under the right circumstances, that it begins paying dividends within 12 mos or less of being planted from seed! By year 3 it is providing seeds from which Neem Oil is made. Neem leaves and even Neem Bark are also highly valued and useful in their right. Neem oil is used for everything from medicines including anti-viral, anti-bacterial, anti-fungal, and anti-parasite medicines and agricultural medicines and organic pesticides, soil treatments, and compost. With drip irrigation and liquid fertilizer (For example from a Tilapia fish operation?). Neem lumber will be ready to harvest between years 5 and 8 ...from seed... and we are saying by "lumber" we mean 4 meter long millable trunks from between 12 to 16 in or more in diameter in that 3 year period noted above. With 1200 trees planted per hectare, just 40% (approximately 500 trees with an approximate trunk value of between $250-$300 US each) are thinned or harvested leaving up to 800 maturing trees indefinitely to keep growing and giving raw product material in the forms of leaves, bark, seeds for oil, and branches (3in or more in Dia. used by artisans and furniture makers. The Neem reaches 30 -35 feet in height in 3 years from seed and will eventually reach 1.2 to 1.5 meters in diameter over its 200-250 year life span. Neem is now being used to cure drug resistant strains of Malaria, as a prophylactic for Dengue and other fevers, as a cure or control for Psoriasis and many other skin ailments, as a control and prophylactic for diabetes and high blood pressure, while synthesized active ingredients of Neem are being injected directly into cancerous tumors with impressive results and continuing research being done in this area. Because of Neem´s dramatic positive effect on boosting immune system function of both humans and animals, research is showing great promise in it´s use with HIV positive and AIDS patients. Finally, and getting back to Neem in terms of strictly forestry, the Neem, as organic pesticide, is being used in the Yucatán, Cuba, and other Latin American countries to great advantage (and benefit of workers by cutting exposure to toxic Petrochemical pesticides) in halting infestations and deleterious worm larval infections which historically have devastated stands of valuable tropical hardwoods on plantations. Neem therefore has the added advantage of being comparable in some ways to both Mahogany, it´s cousin, as well as the so-called Spanish Cedar or "Cedro" but with the added advantage of it being it´s own producer of organic pesticide which first protects the Neem itself from costly infestations but is now also being used effectively to treat and protect other highly valuable plantation hardwoods as well. It must also be noted that the Neem is also having a powerful impact on Yucatán´s famous cash crops as an organic pesticide and soil treatment as well. This pesticide can be produced on site with bulk Neem oil supplies and while commercially available (when you can find it) Neem Pesticides cost approximately $300 pesos per liter. We can make them "Farm Made" for under $20 pesos/liter. Another advantage of Neem as a commercially viable forestry/plantation tree is that it will grow in the poorest of rocky soils which may also be too shallow for other species. We suggest irrigating to speed up the quantity and quality of growth and production with the Neem as from our own personal experience, on our own project, (Maya Neem Farms/ www.GreenPlanetBluesea.com) we have personally witnessed between 2-3 times the rate of growth (of un-tended trees) in trees watered regularly and at least infrequently (IE 1-2 times annually) fertilized. 6) Government Subsidies: Government subsidies are available under certain circumstances for the planting of a fairly wide number of qualified species. Neem, Cedro, Mahogany, and Chacah, among other species are considered Group I species and therefore receive the highest subsidies for planting which is $8,500 pesos per hectare. In the case of the Neem, that $8500 pesos will reimburse a grower approximately 90% for his entire plantation (minimum 25 hectares) not including costs for irrigation which is covered at $11,500 per hectare with another subsidy. Contact us directly about qualifications for subsidies. 7) Harvesting Neem Lumber. On-site harvesting and processing of Neem (or other species assuming one lives that long) is our preferred way of maximizing profits while minimizing damage to remaining trees, other plants, trees and farm facilities. Harvesting the Neem involves a good deal more than simply felling trees because every part of the tree, from the ground up, has very significant and thus profitable economic use and value. Trees to be cut must therefore be selected and groomed years in advance. When they are felled, all of the leaves and bark will be harvested and dried as well, each with it´s own value and use in mind. Branches over 2-3 inches in diameter will be sold to artisans and furniture makers. Leaves and bark will be used as medicines, in cosmetics,and in agricultural products, including organic pesticides, soil treatments, and pesticides, for growing domestic consumption as well as export primarily to the US. The selected trees will be stripped and leaves, bark and branches harvested separately. Branches and twigs which cannot be used for other purposes will be ground and turned into pesticidal compost material. On our own project, we intend to buy a portable sawmill imported from the States and Marketed through Mexico City so accessibility is a non issue. Because of its approximately $60K US price tag, this implement will be considered "heavy equipment" and therefore eligible for a government subsidy for Rural Development for up to 80% of the cost. The saw of choice, by the way, is made by one of the best known international manufacturers. Here is the saw : Woodmizer LT-40 Portable Sawmill Another advantage of on-site milling is that our raw trunks, converted into raw or even finer lumber, will have a value added sales price ranging somewhere between 50% and 100% higher than by simply selling the raw cut trunks. This not only increases or effectively doubles our income but opens doors in terms of distribution and manufacture in other areas and industries. With the portable machinery, we will also be equipped to service client plantations within the state as well so that in addition to marketing products collectively, we will also have the ability to process and market harvested tropical lumber as well within the nest 5 to eight years. Meanwhile, and almost immediately, we will be harvesting Neem products as well as cash crops planted between and under the Neems thereby benefiting from their insect repelling power as well as their shade when Yucatecan temperatures range between 40° and 45° C between late March and mid-July. FYI, Neem controls or kills 250 kinds of soil Nematodes as well as at least another 200 species of above-ground pests and plague infestations. How does one invest? You can invest with us or you can buy your own plantation site and contract with us to set you up, and run your operations from planting through harvesting the first lumber trees and beyond. You do not need to speak Spanish, know the culture, anything about forestry, farming, or ranching nor really do you need to live in the countryside if you prefer a city in this or another area or country for that matter. Profits: But how much will you make? To save time let us just address the projected income from the 4 meter stripped logs as lumber and not count profit from the previous 5-8 years of product harvesting or the significant tons of product harvested at the time the "thinning" begins. Let´s conservatively average each trunk at $300 US each x 500 trunks per hectare. That equals $150,000.00 per hectare x a minimum of 25 hectares for this example. On our project we will plant 70 or more hectares but that is another issue. Our example of 25 hectares x $150K per hectare = $3,700,000.00 US. By milling the trunks ourselves we will effectively increase the value of our lumber between 50% and 100%. Let´s play it safe and use a 50% increase from milling or $75K/hectare for a total trunk harvest value of $225,000.00 per hectare x 25 hectares for a total gross profit of $5,625,000.00 US on a very conservative calculation. Remember that we are talking 5-8 years from now to marketing and coincidentally the current global economic low should have bottomed out and climbed back out of the current abyss by then according to the "experts" we have read. The other reality is that according to every agency and expert we have read, demand and therefore prices on tropical lumber species will continue to increase significantly over the next 20 to 30 years. Unfortunately we are having trouble with Internet Explorer...again... so they will not let us add a direct link to the following, very important publication for you from the U.N, FAO. If you however simply cut and paste the URL into your own browser window you will be able to read it despite our troublesome "Internet Exploiter" browser: Well worth the effort! From the FAO: Global Demand for Timber Products ftp://ftp.fao.org/docrep/fao/011/i0350e/i0350e02a.pdf The Bottom Line: You will net between 35% and 40% of total profits. It actually works out to more than you think because remember we very likely will have saved thousands of dollars for you by facilitating the substantial government subsidies that quite frankly "foreigners" seldom receive even if technically they are "qualified" as a Mexican corporation. We will do or manage all of the work so we will be on site and/or managing all operations for the duration. You will be free to come and go as you like and most folks, not accustomed to the Yucatecan sun and temps during the dry season, are definitely "ready to...go" from the end of March till some time in August or later when the thermometer starts to be a little kinder. PLEASE NOTE: ALL FARM,RANCH, AND PLANTATION INCOME IS ...TAX FREE. That´s right and you will even get refunded your sales taxes (16%) bi-annually, on almost everything you buy, except for alcoholic beverages. If you work on or invest in our project directly (doing your own project will obviously have a greater start-up cost), you will invest approximately $3,000.00 US per hectare for start up, most of which should be refunded by government subsidies which we qualify for. On an annual basis count on $150.00/hectare/month for maintenance or roughly $1800 US /HA/year. Remember though that that should be more than paid for or refunded from funds we earn harvesting and selling raw materials and/or making/selling products in the first 5 years so that by the time we harvest lumber, all of your investment will have already been recouped and then some before the end of year 3. You will pay no taxes and will have benefited significantly from government subsidies. Lumber gross income should therefore, and easily, be "net" even including the sawmill. Your 35% - 40% of $5,645,000.00 US should therefore be between $1,968,750.00 and $2,250,000.00 US on just 25 hectares (61.5 acres).Smaller acerages and investments are of course possible. We used 25 HAS here only because it is the minimum plantable to receive subsidies. As long as total hectares planted reach 25 HAS, "sharing" is fine. Other species cannot frankly hold a candle to this strategy or the wonders and possibilities of Commercial Reforestation with the "Tree of 40 Cures", the Neem. Please contact us directly for further details. Thank you! |