2nd August 2012
In a world where traditional asset classes such as shares, bank bonds and property are seen as volatile, more and more investors are looking to commodity investments for a return and timber has historically performed better than most.
Global demand for timber is booming yet supply is dwindling. As an alternative, bamboo has many desirable qualities, being harder, stronger and more durable than most tropical woods.
The bamboo plantations for this investment, as featured on the BBC, are based in Nicaragua, one of the poorest nations in Central America. Now, for the first time in their lives, many locals have found paid employment on the plantations enabling them to raise their quality of life. Parents are able to buy food and clothing and provide housing education for their children. As a responsible employer, EcoPlanet pays a fair wage (around twice the local average) and offers opportunities for training, personal and business development.
Bamboo is the fastest growing land plant, rising up to 1m per day in peak season. Trees can take over 25 years to mature yet bamboo can reach maturity in 4 years and is harvestable every year thereafter. It can be cut and will grow back, providing a sustainable source of material. In fact, a hectare planted with bamboo can produce 20 times as much timber as a hectare of even fast growing softwood trees taking the pressure off logging unsustainable timber sources.
Since bamboo grows so fast, it sequesters up to 4 times as much carbon as a tree during growth and as part of EcoPlanet's commitment to green policies, only land which has been degraded for more than 10 years is used for plantations. Trees are never removed to plant bamboo.
Due to the booming market, speed of growth and constant demand, bamboo is an investment which really makes sense. Using growth forecast figures which are 15% lower than a report from Yale University and a highly conservative price of $1 per linear metre against a current market average of over $1.35, returns are projected to exceed 145% on top of your initial outlay over the 8 year term. That's an annualised return of 18% and as these numbers are very optimistic, your eventual return could be much higher.
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EcoInvestments are specialists in the field of forestry and agriculture investment.