Investment Spanish Timber in Spain
A new alternative for diversifying your investments, in a way that is not only profitable and sustainable, but ethical, too: hardwood.
The investment is backed by a solid institution and offers two sources of benefits: investors benefit from natural tree growth and from the revaluation of hardwood (quoted on international markets).
If you choose this type of investment, you can maintain your trees through to the end of their natural life, or sell them on the secondary market (buyers of developed trees). You also have the possibility of investing through contracts that guarantee a repurchase price at the end of a particular period.
a) The holdings belong to Bosques Naturales S.A. The holdings currently cover an area of around 100,000 hectares.
b) Bosques Naturales S.A. has a paramount interest in maintaining the trees and selling them at the highest possible price, because our main earnings comes from the 20% sales commission involved.
c) Bosques Naturales is a founding member of ASEBIO (the Spanish Association of Biotechnology Enterprises, which includes companies such as Zeltia and Glaxo SmithKline) and has the support of the CDTI, an agency of the Ministry for Science and Technology, and ENISA, an agency of the Ministry of Economy.
d) Timber, as the raw material, is traded in on international markets.
Returns depend on two factors:
a) Tree growth, which is estimated at 10.34% per year over 20 years.
Innovative methodologies are used to obtain trees of significant size and quality with a high financial value, thus cutting the growth cycle and obtaining timber of high financial value in around 20 years. This involves increased production in a shorter time and with more quality than in extensive or wild conditions.Our methodology is the result of an intense R&D and Innovation program, together with scientific collaboration agreements with reputed organizations including the Polytechnic University of Madrid’s (EUITA, University School of Agricultural Technical Engineering), the Community of Madrid’s (INIA, Agri-Food Institute) and GENOMA ESPAA (an agency of the Ministries of Health, and Science and Technology).
b) The rise in the price of timber. The cost of timber in 20 years from now is an unknown factor, but if hardwood prices follow the trend of recent decades, its value will have risen considerably. Continuous rising demand, as well as a growing shortfall of trunks for ‘prime’ qualities as required by the processing industry, means it is likely the upward trend will continue over the next few years.
With regard to safety, Bosques Naturales has taken all types of preventive measures and equipped its holdings with infrastructures such as windbreaks, fencing, water and fire hydrants, trucks, etc. It has also taken out a ‘growing wood’ insurance policy to cover the plantations against disasters.
4. When You Get the Returns
The business is designed to obtain maximum profit after the sale of the timber, once the production cycle has ended. You are free to collect your profits at any time before cutting by turning to the secondary market (clients who wish to buy trees of a certain age). It is important to emphasize that we recommend maintaining an investment in forestry assets for at least three years. The new Plan 10 contracts provide a guarantee on returns and the fixed times when they can be paid.
5. Tax Treatment.
Because timber is a real property, the difference between the profit obtained from the sale and the acquisition price is paid at a rate of 15%. The acquisition price is updated in line with the correction coefficient that the Ministry of Economy publishes on real property.
Who Are Bosques Naturales, S.A?
Bosques Naturales, S.A. is a Spanish company (founded in 1996) that is the leader in hardwood production through the use of FSC-certified sustainable plantations located in Spain, to which the state-of-the-art biotechnology is applied. The company is now offering the chance to participate in the high returns of its activity via a Sustainable Investment in its forestry assets.The corporate aim of Bosques Naturales, S.A. is the organized production of hardwood and/or tropical wood of great economic value earmarked to the international processing industry. The innovative methodology consists of making and developing Sustainable Agro-Forestry Plantations on fertile agricultural land and planting and cultivating wood chosen for its capacity and vigorous growth and aimed at timber production.The selection of trees planted with biotechnological techniques and the application of modern agronomical methods multiply the productivity and quality of the timber obtained from the plantations.Bosques Naturales S.A.’s business involves acquiring irrigated agricultural holdings and transforming it into agro-forestry plantations. The timber cultivated is especially selected by our R&D and Innovation department, and currently consists of exceptional varieties of walnut, cherry, pear and ash trees.Individual investors are then sold ownership of the trees, identified by their geospatial position in the plantations, and we take care of their cultivation and maintenance. When the contract for the provision of these services ends, the trees are sold and cut and the plantation is replanted. The timber obtained is sold at the best price on the international market.The results obtained, minus 20% in the form of a management and marketing commission, are sent to the owner of the trees in exchange for a closed price the purchaser paid Bosques Naturales S.A, at the initial time of tree purchase.The basic sales contract for the trees is called an agro-forestry contract. There are 3 types of agro-forestry contracts, as well as our Plan 10 contracts, which offer a certain repurchase value for a fixed period. When you buy a tree from one of our plantations, you are making an ethical investment of high financial return with the guarantee offered by an irreplaceable raw material such as timber.The Bosques Naturales, S.A. share structure includes the following institutional investors:- CRM (Capital Riesgo de la Comunidad de Madrid) S.A., with a 7.65% stake. This organization includes shareholders such as Caja Madrid (35%), the Autonomous Community of Madrid (22.5%) and the Madrid Chamber of Commerce and Industry (15%).- EUROBOSQUES, a company that specializes in biotechnological research into forest plants, with a 12% stake.Other institutions that support the activity of Bosques Naturales, S.A. are:- ENISA S.A. (the National Innovation Enterprise), which has had a share loan with Bosques Naturales, S.A. since 1997.- The CDTI, Center for Technological and Industrial Development.
Investments based on TREES are economically profitable, but we should highlight another series of benefits that their cultivation for TIMBER production brings to the environment and society in general.
ECOLOGICAL AND ENVIRONMENTAL BENEFITS:
-1.- Direct Benefits (i.e., inherent to production activity):- Formation of forest land,- Absorption of atmospheric carbon dioxide (CO2),- Release of oxygen (O2) into the atmosphere,- Condensation of water (H2O) backed by the formation of forests, thus creating the conditions needed for rain.
-2.- Indirect BenefitsThe deforestation of areas of high ecological value is leading to a shortfall in timber. Agro-forestry holdings prevent the effects of deforestation, thus preserving the lives of many trees and their associated flora and fauna. For every tree cultivated for timber, it is anticipated that 16 trees are destroyed in tropical forests for timber extraction.
-3.- Social and Cultural Benefits- Creation of jobs associated to the activity.- Promotion of the redistribution of wealth.- Enrichment of the beauty of the landscape.- Tourist development.
The environmental, social and cultural benefits mentioned above are closely linked to the living organism, i.e., the TREE, which means that investing in products based on a rational exploitation of trees could accurately be described as ETHICAL.To date, Bosques Naturales has planted and sold more than 200,000 trees from the 1,100 hectares of its irrigated agricultural holdings. Under current turnover conditions, 100 new hectares are planted every year. As turnover grows, the number of hectares per year is set to rise, so that over the next 10 years we expect to plant more than 4,000 hectares in Spain alone, i.e., the equivalent of 1.2 million hardwood trees. Following this progression and as we make further headway, the environmental benefits can only grow.Bosques Naturales believes the plantations will save many trees in natural areas. For each hectare cultivated, 16 hectares of forest will be saved from deforestation.In conclusion, this is a product offering significant financial returns, a real property that can be marketed at any time, and, as an investment involving an ethical activity, it is open to anybody to participate in actively.
Bosques Naturales, S.A. is the first Spanish company to be awarded the FSC forest certificate for forest plantations in Spain.High Yield InvestmentsWhen you buy a product made from FSC-certified timber, you have the following guarantees:FSC Certification1.- The timber comes from a plantation that is economically viable, both today and in the future.2.- The plantation and chain of custody fully meet all social, labor and human rights requirements.3.- The plantation and chain of custody respect the environment, protecting and benefiting it.The Cceres and Girona holdings are currently FSC certified, while the other holdings are in the process of certification.The diploma for this certification was presented to us at the Ministry for the Environment on 7 May 2003 at an event presided by the Chairman of the Environment Committee of the Congress, Mr. Juan Carlos Aparicio, and with the participation of the Environment Secretary, Mr. del lamo.
Investment Spanish Timber in Spain