FRA supports Teak as a Great Investment Opportunity
01/09/2013

Demand for sustainably produced timber is likely to increase and teak could be the answer, according to FRA.

Online PR News – 09-January-2013 – Bainbridge Island, WA, January 08, 2013 – Demand for sustainably produced timber is likely to increase and teak could be the answer, according to Forestry Research Associates (FRA). This view was backed up by speakers at the Investment Week climate change Investment conference earlier this month.

Delegates at the conference, heard how teak is a great timber as it has the same strength as oak but grows much faster and is lighter in weight. As a result, it can be the perfect option for use in construction.

Although some plantations of teak once had a reputation for providing little by way of useful habitats, things are rapidly changing and team plantations are now operated in an increasingly sustainable way, by firms like Greenwood Management, for example.

Rupert Allinson of Harthill, which sponsors the Quadris timber fund, explained that timber plantations can help to safeguard local natural forests in the areas they are planted as they provide an alternative source of a material than is very much in demand, thanks to growing energy price and populations. Emerging economies such as Brazil, China and India have ambitious house building projects planned to help provide urban homes for those people who have moved into cities to take jobs.

Mr Allinson also told the delegates at the Conference that trees grown in teak plantations, such as those operated by Greenwood Management, are managed in cycles, which means there are always new trees growing up behind the ones that are chopped down and hold off.

FRA’s analysis partner Peter Collins, claims that means anyone investing in a teak plantations operated in this way will start to see returns sooner than they would if they had simply invested in buying a piece of forested land.

Thinning is also a part of the teak plantation management process and this produces smaller timbers that are sold off for use in energy production. Investors will often also see returns from the selling off the thinned timber at stages through the process.