The Paulownia (Princess) Tree
A Green Earth Africa Investment opportunity
EVERY GENERATION BLAMES THE ONE BEFORE, AND ALL THEIR FRUSTRATIONS COME BEATING ON YOUR DOOR
- Mike and the mechanics
Timber is the only asset to have grown in three out of the four market
collapses of the
20th century, has
risen steadily in
price for 200 years
and has returned
an average of 6.5%
a year for the last
century
- Jeremy Grantham
Introduction
- What would you like from a timber investment?
- The Project
- Investment Summary
Princess Tree
- Overview
- Timber Properties and Value
- Environmental Properties and Value
Investment Details
- Investment Structure
- Returns Calculations
- Guaranteed Returns
- Why would they do this?
About Green Earth Africa
Green & Ethical Investment
- Climate Change
- Biodiversity
- Humanitarian
- The Paulownia Project and Carbon Offsets
Investor Safety
- Land Held in Trust
- Land and Tree Ownership
- Fire & disease
What the Experts Say
- Financial Times
- What Investment Magazine
- Jeremy Grantham
- Investment U
- Money Week
Additional Benefits
- Tax Advantages
- SIPP Qualified
- Tax Advantages
Exit Strategy
What to do next
Introduction
High returns, paid quickly? We offer up to 16.8% net per annum payable every 6 years*.
A safe legal structure and transparency? Offshore trust structure in place and full investment pack supplied
Sustainable and ethical practices? Our investments are continually being certified as and when the plantations are planted and expanded. Carbon offset projects proven to deliver environmental and humanitarian benefits.
Secure returns? We give you guaranteed minimum returns of 16.8% after six years; returns are a minimum of 16.8%, payable every five years.
With 30 years of experience working in African conditions and the agriculture sector, Green Earth Africa has an experienced management team and are an established provider of environmentally positive investment opportunities derived from a small percentage of their own projects.
Working with governmental bodies, educational institutions and environmental specialists, Green Earth Africa develops certified Carbon Offset projects throughout Southern Africa.
The African Project is an on going and expanding venture, carefully developed to provide maximum financial returns as well as socioeconomic and climatic benefits.
The African Project is a commercial Paulownia timber plantation yielding returns after just 6 years and there after every six years.
The African Project is causing widespread excitement, so much so that the Southern African Governments and governmental departments of environment are working with Green earth Africa, local communities and their chiefs to make more land available for continual expansion on long term leases.
Green Earth Africa is committed to reforesting large blocks of land allocated to the company by governments in Southern Africa, community development, poverty alleviation, reversing lane degradation whilst creating lucrative returns for investors with fast growing Paulownia to form a sustainable timber plantation with Carbon mitigation benefits. The timber can be harvested in year six with a second harvest performed in year twelve and so on in years eighteen and twenty four .
Private investors are invited to join in this project by purchasing individual plots of land providing net returns of up to 16.8% per annum over a total investment period of twenty four years*. Not just an exceptional financial investment, buyers can enjoy a variety of tax breaks, assurance of security and enjoy the environmental benefits and community initiatives facilitated by the project.
- Low investment amount from just 3,000 US$ per plot of 5 acres( 2 hectares) *
- Gross return of 158,400 US$ over 25 years *
- Guaranteed returns of 16.8% p.a. over 25 years *
- Returns paid every 6 years
- Tax advantages
- SIPP qualified
- CO2 mitigation
- Benefits to local communities
- Land held in trust
- Timber buyer with offtake guarantee
* Applicable to investments made before the 31st December 2010, an investment term of 25 years is
granted to account for possible delays in harvest. Based on simple annualized ROI at the introductory
purchase price of 3,000 USD applicable to all purchases made before 31.12.2010, please see guaranteed
returns section for details and definitions.
Princess Tree
Paulownia is globally known as the Princess Tree, named in honour of Queen Anna Pavlovna of The Netherlands. It is native to China and the Far East and has been used in Japan for centuries as a furniture wood. It was an ancient Japanese custom to plant a Princess tree when a baby girl was born, and then to make it into a dresser as a wedding present or dowry when she got married. The Paulownia symbol is the crest of the office of the prime minister and serves as the emblem of the Japanese cabinet and government.
Known in the industry as the “Aluminium of timbers”, Paulownia is 30% lighter than any comparable hardwood, it is twist, shrink and warp resistant and virtually rot free. The fine grained and warp resistant properties make Paulownia wood exceptionally suited for making wooden surfboards, lightweight touring skis as well as boats, pallets, household furniture and plywood.
Several institutions are conducting research to develop fast growing Paulownia as a viable source of bio-fuel, a crucial step towards solving the global energy crisis.
The Princess Tree is extremely fast growing and, once its timber is harvested, the tree naturally regenerates from existing root systems, earning it the nickname the Phoenix Tree. Aside from its immense capacity for carbon absorption due to its enormous leaves, Paulownia has the ability to reclaim ecologically stressed land due to its deep running root systems.
This means that up to four rotations of timber growth and harvest can be made, without the need for major soil preparation or replanting, in the time it would take a Teak tree to reach just one harvest.
About Green Earth Africa
Green Earth Africa is a Mauritian domiciled company under experienced management with experience of a combined 120 years working in Africa specializing in agriculture and more recently green and ethical investment opportunities. Their team is made up of European and Southern African staff, including locally employed people.
Also working with several leading environmental and forestry experts, universities and governmental bodies, our partner has access to cutting edge technologies and information from the highest ranking professionals in their fields.
Green Earth Africa is building a portfolio of environmental projects ranging from environmental offsets, carbon credits, wildlife credits, water credits, avoided deforestation (REDD), wildlife management, water management, forestry management to Bio fuel production. All projects are designed with community benefits in mind and initiatives include financially supporting local schools, medical, anti poaching, illegal logging, job creation, poverty alleviation, global education programs, seminars and training on the carbon market and climate change, and biodiversity and technological research.
Only a small percentage of land used in any project is leased to external investors, ensuring that the company shareholders themselves are the largest stakeholders in every project they develop, reaping the benefits of their success but also taking the majority of any risk upon themselves.
Green Earth Africa’s knowledge and experience of working in Africa under sometimes difficult circumstance is a big bonus to the company and its investors and the ability to work with governments, local chiefs and communities and the ability to speak the local dialect is a valuable asset for the company and investors. With the amount of land available to Green Earth Africa there is massive scope for expansion and there are no restrictions for the size of investment, with the increasing demand for timber markets are guaranteed and handsome returns. Location is also a plus as ease of access to the Asian and Middle Eastern markets. For corporations this is an ideal investment for “Green Credentials” which is becoming more and more important in this climate change conscious environment.
- Hands on experienced dedicated management.
- Environmental project portfolio.
- Expert staff employed across the board.
- Working hand in hand with local governments.
Investment Details
The African Project presents a unique opportunity to invest in the highly lucrative timber industry with the added security of a purchase guarantee. The investment structure has been designed with maximum customer security in mind, and works as follows:
- Green Earth Africa plants up to 1250 trees per acre (2500 per hectare).
- You receive 1060 trees per acre (2120 hectare) of land purchased.
- The 190 (360) remaining trees are maintained as a buffer and for community cooking fuel.
- A lease is registered in your name for 25 years, which will produce 4 timber harvests. (Note, the 4 harvests are expected take 24 years, but the lease is granted for 25 years as a precautionary measure).
- Returns are based on a harvest at the end of each 6year cycle.
- You have the option to sell the timber from each harvest at a guaranteed purchase price which will be US$ 165 per m3 for the first harvest.
- The guaranteed purchase prices for your timber for subsequent harvests will be adjusted in line with the US timber inflation rate.
- A 6-year old Paulownia tree produces at least 0.1m3 of processed wood.
- A total of 960m3 of processed wood is produced per plot over the 4 harvests.
- A US$3,000 investment (available until 31.12.10), will yield a return of 158,400 USD per plot
- The harvesting, processing and transportation is carried out by a management company of your choice (unless you wish to organise it yourself) which is likely to charge around 10-11% of the value of your timber sales.
- Management fees are taken from the timber returns, nothing more is payable after the initial investment.
- After this has been deducted, you receive a gross return of 21.8% per year.
- This produces a net return of 16.8% per annum over 25 years, after the initial investment amount and management fees, logging and transportation fees have been deducted.
An investment amount of just US$ 3,000 will buy you 20,000m2 (5 acres, 2 hectares) of timberland yielding 2120 Paulownia trees for a 25 year period. The trees will be harvested 4 times during this period at approximately year, 6, 12, 18 and 24, giving you an average simple annualised return on investment of 16.8% p.a., if purchases during 2010 time of purchase. These returns are based on the prices being offered and guaranteed by secured markets. Our customer is willing to take the entire project’s timber harvested over the 24 year term, but you also have the option of selling your timber elsewhere at possibly more attractive prices.
*Figures per 20,000 m2 (5 acres, 2 hectares) plot, based on an investment amount of USD 3,000:
The returns on investment are considered to be guaranteed on the following basis:
Secured markets customers in Malaysia and China have agreed to buy the timber produced by the African Project for the sum of US$205 per m3 of wood. The company has entered into a contractual agreement whereby is has to purchase the timber for this amount every 5 years, with a price adjustment in line with US inflation rates for the second, third and fourth harvests . The purchase will be bonded (i.e. guaranteed), to ensure maximum investor security.
Figures taken from the Food and Agriculture Organization of the United Nations (FAO) show that tropical deforestation rates increased by 8.5% from 2000-2009, while loss of primary forests expanded by 25 percent over the same period. Whilst forests are disappearing, demand for timber is growing and, with the strain on existing forests reaching a peak, sustainable timber is urgently required.
There is a worldwide international client base of Paulownia users and other tropical timbers. Demand for the timber is so high that the entire African Project’s timber can be sold to the company’s existing clientele several years in advance.
The current market value of Paulownia timber is in excess of US$165 per m³, with prices predicted to rise over the next 20 years. Secured customers are happy to secure their supply at less than 60% of the current market value, in the belief that it will double its money when the wood is sold. Our main customer also uses the timber for bio-fuel production and boasts assets of over US$800M. That should provide a sufficient cushion to ensure that the customer can honour the option agreement even if it has not secured a third party timber user to which it can sell on the timber it has agreed to buy from the African Project. And standing behind it is the guarantee.
Green Earth Africa and their customers have agreed not to use the timber for any purpose which will release the carbon stored in the wood, a detail which is crucial to the Carbon offset status of the Princess Project.
- Guaranteed timber purchase guarantee
- Up to 16.8% return on investment
- Future timber prices in line with timber inflation rate
- Deforestation rates are a growing problem
Green & Ethical Investment
Climate Change
The United Nations Intergovernmental Panel on Climate Change (IPCC) declared in 2007 that the evidence of a global warming trend is “unequivocal,” and that human activity has certainly caused these changes over the last 50 years. Forests are the lungs of the Earth and their destruction is estimated to be responsible for up to 25% of the world’s Carbon emissions. Forests are also crucial to the natural water cycle, to the Southern African amazing biodiversity and to the prevention of soil erosion and desert encroachment, a problem which is already affecting many areas in Southern Africa.
Experts point out that the most significant cause of deforestation of Southern African rainforest and Savannah Bushland since the 1960s has been charcoal manufacture, illegal logging and slash and burn agriculture which required the conversion of large areas of rainforest into deforested land.
The African project aims to restore some of Southern African forest cover which will remove Carbon dioxide from the atmosphere restore soil carbon; prevent erosion and desertification and helping to fight climate change. Paulownia timber is also currently being developed into an efficient and valuable biomass and bio fuel. Green Earth Africa are able to secure off takes with leading power stations in Japan and Europe should it prove viable .Green Earth Africa are investigating the possibilities of partnerships with various green fuel companies for bio fuel production facilities within Southern Africa and With the timber harvested from the African Project may find itself being converted into a cutting edge bio-fuel which will help towards solving the global fuel crisis.
- Deforestation accounts for up to 25% of world carbon emissions
- Paulownia is at the forefront of bio-fuel research
Although not native to Southern Africa, Paulownia is a Tropical species originating from Australia, and has been grown in Africa for nearly 200 years. It can provide shelter, food and a home to local animals, much like the previously dominant natural rainforest and Savannah bush land, and is well suited to the climate and terrain that Southern Africa offers.
In addition to its remarkable Carbon storage properties, the Paulownia Tree provides a startling amount of environmental benefits: Paulownia’s deep running roots increase the organic content of degraded soils by processing and filtering contaminants through the uptake of its vascular system. This deep running root system also protects the land from soil erosion and maintains watersheds. Paulownia’s versatile leaves are incredibly rich in nutrients, oils and energy and can be used for natural medicine and bio fuel.
Green Earth Africa is working closely with the Southern African governments and local leaders to ensure the community is being benefitted and considered at every step of the project. Local farmers and community members will be invited work within the plantations and also harvest organic honey and wild mushrooms which Green Earth Africa will purchase and market on their behalf. Land workers will be provided with good quality accommodation and facilities onsite to ensure their comfort. All of Green Earth Africa’s machinery and facilities are purchased with user comfort in mind, form air conditioned tractor cabins to automated fertiliser systems.
When trees respire, they absorb Carbon Dioxide from the atmosphere through the surface of their leaves and release Oxygen back into the air. The Carbon they absorb is stored as biomass and soil carbon, a process which is at its fastest during high growth periods and known as carbon sequestration. Due to its extraordinary growth rate and huge air filtering leaves, Paulownia absorbs Carbon Dioxide at an extraordinary rate. Green Earth Africa has a proven track record in developing carbon offset projects and the African Project has been carefully designed as a voluntary carbon offset project, based on CDM methodologies. The African Project has been designed in line with the CCB and VCS carbon standards, which ensures that the project absorbs carbon dioxide from the atmosphere with proof of additionality, permanence, accountability and traceability. Any funds received from the trade in carbon credits will be distributed proportionally to investors as an annual divided over and above their investment and expected returns.
Investor Safety
The African Project had been designed with maximum investor security in mind, employing a firm legal structure whereby each plot of land is kept in Trust with offshore based Trustees for the lifetime of the lease. The trust structure ensures that every plot sold to investors would remain in their ownership in the unlikely event that Green Earth Africa should cease to exist as a company.
Your land will be fully leased to you for the duration of the investment and you will have the rights to 1500 trees per plot. A robust legal contract will clearly outline your rights to the land and the trees, and you will receive a Land/forestry Leasehold Agreement from the offshore trustee. The African Project is not a collective investment scheme (CIS) and as such your plot remains under your control at all times. The lease and contract will ensure that you have sole legal rights to the timber/land and that no-one can sell, let or use the land for any purpose without your permission.
Fire poses a serious risk to many timber plantations and Paulownia is no exception and Paulownia forest fires can be very frightening and violent. Green earth Africa has very careful laid out plantation with large fire breaks to minimise the risk. Although Southern Africa has a dry season, fire control and prevention measures will be put in place with large fire breaks and mobile fire fighting equipment on full standby. Grass verges are kept short with a large boarder around platations.The humid climate during the rainy season is a factor which eliminates the probability of fire; natural fires are not uncommon in Southern Africa but are generally part of a natural cycle, however fire prevention is taken extremely seriously and all measures are in place to prevent fires. Insurance cover has also been put in place against fire. In the event of a fire, the plantations are harvested and regrowth commences immediately. Termites are a problem during early stages of growth but all precautions are taken to prevent this risk. A detailed risk assessment and market research document is available on request.
What the Experts Say
Financial Times
“ Last year the Harvard Endowment Fund invested $500m in forestry in New Zealand."
“ Money does not grow on trees. Unless, that is, you are in the timber business… ”
WhatInvestment Magazine
“ In 2007… forestry investments outperformed equities, gilts and commercial property. ”
“ Forestry is a compelling investment sector for many different groups of investors, from those looking simply for profits or a hedge against equity investments to those looking for an environmentally sound home for their money ”
Investment U
“ Managed timber has beaten the stock market, with less risk, over the long run. ”
“ From 1973-2002, managed timber returned roughly 15% annually as an investment, while stocks returned about 11%. ”
“ Trees don’t know about the war in Iraq, or the bear market in the Nasdaq. While stocks couldn’t keep up with inflation in the 1970s, timber investments never had a losing year! ”
“ Trees just keep growing year after year. So investing in timber is an excellent way to balance your portfolio as its value rises even when stocks are falling. ”
“ The price of timber has consistently beaten inflation. Think of your timber investment as a good inflation hedge-the numbers show that to be true. ”
Jeremy Grantham
US Fund Manager who predicted market collapse in
2006
“ Timber is the best long-term investment there is, it is the only low-risk, high-return asset there is. ”
“ [Timber] has risen steadily in price for 200 years and has returned an average of 6.5% a year for the last century ”
“ [Timber] has been the only asset class in existence that has risen in three out of the four market collapses of the 20th century ”
“ Over the last century, timber prices have risen at 3.3% above the rate of inflation. Add 5% a year in income, and you’ve got a timber investment asset that has returned double digits, competing with stocks over the long run. ”
MoneyWeek
“ Timber makes sense from a tax perspective ”
Source: Timber: The Ultimate Growth Investment
Additional Benefits
Income derived from within Southern Africa but Mauritian domiciled companies are only subject to 15%capital gains tax and income tax. However, corporations and individuals do not pay tax on any income derived from abroad, nor do they have any reporting requirements on income derived from abroad to the Mauritian government. Since the African Project timber is to be sold to an Asian company, this income will not be liable for tax within Mauritius due to trade agreements. Mauritius also offers excellent tax advantages for investments channelled through their country.
SIPPs (self invested personal pensions) are an increasingly popular way of investing money. They offer up to 40% tax relief and most people under 75 qualify to contribute to them. You can contribute up to the amount of your salary every year and, once in a SIPP, your money will grow free of capital gains tax. Furthermore, at any age between 55 and 75, you can usually take out up to 25% of the value of your SIPP tax free. You get a pension allowance every year-so as not to lose your annual allowance you must act before the deadline.
Please consult your Financial Adviser or SIPP provider regarding placing your forestry investment into a Self Invested Pension Plan. The African Project is not a collective investment scheme.
Commercially managed woodland in the UK is currently free of inheritance tax, provided it has been owned for a minimum of two years. It also qualifies for capital gains tax rollover relief provided the subject of investment is commercial with an established trading activity. Income derived from commercial woodland is free of income and corporation tax too, so a return of 5% from timberland is the equivalent of a return of over 8% from any other investment to a higher-rate taxpayer. For information on UK tax breaks, please contact your financial adviser or accountant.
Information provided here has been sourced from third parties and investors are advised to contact their accountant or financial adviser with any questions. The information below is not to be taken as financial advice and Green Earth Africa, are not responsible for its accuracy.
Exit Strategy
Green Earth offers a buy back option to investors. Any investor wishing to sell their plot can issue Green Earth Africa with a sale offer, in writing by registered post. Green earth Africa will then have twenty one days to respond to the request and will make the investor a cash offer based on the plot’s current market value.
The offer will be valid for twenty one days during which time the investor can accept or decline. If the offer is accepted, Green earth Africa will make payment within 21 days of receiving a written acceptance of their offer.
What to do next
If you would like to reserve a plot of the African Project, please contact us:
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