Teak investment

Cultivating high-grade timber in an environmentally and socially responsible way

The teak investment of Mama Earth

For many years now, teakwood undergoes a steady and growing demand. As a high-graded wood it is a popular material for furniture or construction purposes.
Here we also ‘work’ with the following proven model:

  • The owner of the land receives 50 percent of the timber profits,
  • the investor receives 36 percent and
  • the remaining 14 percent are for projects at the Mama Earth Foundation who also carries out the management.

A teak seedling costs only 16 euro. If seedlings do not grow, for whatever reasons, we replant them at our expense. In order to reach thick tree trunks, our forestry graduates plant the trees at a distance of 5 x 4 meters, so a maximum of 500 trees on one hectare.

The skill of growing teak

Why so much space? This can be explained as follows: Some suppliers plant 1.000 trees and more on one hectare. Our foresters do not consider that as a problem, as long as the trees are young and the roots small. With 1.000 trees on one hectare and a plant density of 2,5 x 2,5 meters, each tree has 6,25 square meters -, at a depth of three meters thus 18,75 cubic meters soil at their disposal. According to our foresters this is far too little in order to supply a strong tree with sufficient nutrients. The plantations are therefore thinned out after several years without significant profits, in fact only to supply the remaining trees with more nutrients which they had to share in the previous years.
Providing a tree with too little soil is like a flower that grows in a pot which is too small. Over time the plant spreads its roots throughout almost the whole pot. Even though the supply is still secured by the soil in the pot, the growth is grinding to a halt. Every skilled gardener repots now in a larger pot with more soil, which is a difficult practice when dealing with a tree. From the outset on we give the tree the triple amount: 60 cubic meters. As a result, we are on the safe side with regard to a healthy and strong growth.

Or calculate differently: if we would also plant the double amount of trees, our teak tree would cost – converted – only half the price. A starter package with 150 trees costs 2.400 euro including notarial contract.

 

How profitable is teak investment?

Is a teak tree profitable as a financial investment if only 36 percent remain from the wood revenue? Definitely, and precisely for the reason that we leave so much space. A 15 year old teak tree (diameter of 32 centimeters, height of 15 meters) has approximately 0,60 cubic meters (solid cubic meters) usable lumber. The price for this tree trunk sample currently amounts to 12.500 peso (250 euro, currency exchange rate 50,00)

In detail: the timber trade is dollar oriented and calculations are therefore made with American measurements. A cubic meter timber includes 423.7760007 board feet. Timber merchants modify this unusual number to a calculable 424. 60 percent (0,60 cubic meters) has thus approximately 250 board feet. The timber industry buys teak for 50 peso per board feet from the farm. So, if we would sell a tree trunk today, the calculation is as follows: 250 times 50 peso = 12.500 peso. This 12.500 peso is divided into 6.250 peso for the farmer and 4.500 for the investor. 4.500 peso corresponds to 90,00 euro. In one sentence: your 16 euro increase to 90 euro, or in other words: your money provides you 12,20 percent green and social interest rates.

We do not have to carry out multiple thinnings since the distance grants trees full access to all nutrients. It still means you receive money every now and then, namely from the use of branches for cutting boards, gift boxes, flagpoles etc. It is currently impossible to say how high the payments might turn out to be. You do not have to keep your trees for 15 years however. You can already offer them in our tree marketplace from the third year onwards and earn money even within a very short time frame.

Investment with social elements

There is no doubt that tropical timber (teak, mahogany etc.) experiences a global demand which cannot be ‘served’ anymore from the remaining forests since these forests are already strongly damaged due to overexploitation. Switching to domestic timber could be a solution if it involves hardwoods of comparable quality. Using poplar wood for furniture is nonsense. It is suitable for chipboards and heating in the form of pellets. High-quality wood must be used for durable furniture whereby the prices of European hardwoods are found to be far higher than the prices for tropical woods.

Wood, and in our case hardwood, is an indispensable revenue source for tropical countries. The most powerful argument of environmental organizations is that nothing from the profits of the plantations is left for the local communities. The people have employment, which is much to be welcomed, but they do not earn anything from the value added.

The farmers earn money from their homes and benefit additionally from the increase in value of the wood, even more than all other parties involved. Is there no disadvantage? Yes, there are also disadvantages! The program of Mama Earth is much more labor-intensive compared to the cultivation of a plantation. Our monitoring team, for example, must exert much more effort in order to monitor the trees which are not standing in a row like tin soldiers. They measure, trim and climb whereby no tree is omitted.

Did we spark your interest?

You are welcome to contact us and we send you further information without any obligation.

Investment inquiry

How does an investment process proceed?

1. You start your investment

We need the desired amount of trees, whereby the minimum amount consists of 150 trees. A down payment of 3 euro per tree becomes due.

2. Preparations for the notary

For the notarial contract we need a complete address with zip code, date of birth, marital status (married / divorced etc.), if married, name of spouse, one or two heirs, each with date of birth, copy of identification card or passport (scan per e-mail or copy to the office).

3. Creating the notarized agreement

Based on this information we make a notarial contract in PDF format which we send to you per e-mail for verification purposes. The purchased trees are already mentioned in the notarial contract. Once all the information is correct, the contract will be distributed six times by postal mailing. All six copies must be signed and sent to Hamburg.

  • As a customer, you will receive one contract back after it has been notarized.
  • The notary deposits two contracts at the court.
  • Two contracts are archived by the notary (you will find the address with e-mail address in the contract).
  • One agreement is archived by the Mama Earth Foundation.

4. Sending of contract

After approximately 6 weeks you will receive your notarized contract per post.

5. Transmission of remaining balance

The contract is legally valid upon receipt of the remaining balance within a period of two weeks.

Why should you opt for us?


The farmers keep their own land (no land grabbing)


By way of a notarized agreement the investor is owner of the trees, which are al numbered


Regular counting and measurement protocols


Successful partnership with the Philippine environmental authority (DENR)


The farmer receives the lion’s share: 50 % (management and surveillance!)


Unbeatable startup costs through our own tree nurseries


The local population obtains employment (social responsibility)


Area measurement with GPS and preparation for Google Earth