The document discusses an investment opportunity involving the purchase and long-term management of teak tree parcels in Panama. Key points include:
- Investors purchase parcels of teak trees that are planted and sustainably managed over 20 years, after which the trees are harvested and proceeds from their sale are shared.
- Conservative projections estimate a 16.5% annual return on investment, far exceeding typical market returns, due to increasing demand for and limited supply of teak wood globally.
- Risks include agricultural, environmental, and management factors, but the opportunity is structured and located in Panama to best mitigate these risks. A professional team oversees all operations.
1. Use your mouse to click anywhere to advance to the next discussion point or slide The following presentation includes various statistics pertaining to inflation, including selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.
2. Use your mouse to click anywhere to advance to the next discussion point or slide The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.
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4. Remains one of the most valuable of all hardwoods and is known for its beauty, strength, durability and weather-resistant qualities
5. Is the leading choice for marine and outdoor furniture applications because the extremely dense wood contains natural oils and rubber content, thereby possessing the greatest capability of any wood to withstand the effects of the harsh outdoor environment
6. Can naturally endure the effects of sun, rain and even snow without rotting, warping, cracking, shrinkage or swelling
7. Will naturally age to a beautiful silver-gray hew over the years or with a periodic application of natural teak oil will maintain its original color and richness for a lifetime.
8. Prices have increased 15% per annum between 2002 and 2007 with prices increasing by a staggering 67% in 2007 due to the supply deficit, according to the ONF (Central American National Forestry Office)
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10. UTMG has full and unencumbered authority to develop, market and manage all aspects of the United Teak Reforestation Project including the associated assets, employees, equipment, land and trees
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13. Establishing sustainable Teak tree plantations on land previously “cut and slashed” for cattle grazing to restore and contribute to the lush tropical canopy
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15. UTMG prepares the land, plants, maintains and harvests Teak trees on behalf of the client
16. Client receives harvest proceeds… Project expansion achieved… All stakeholders benefit, including the precious global environment
17. Project Methodology… Eliminate “Cut and Slash” United Teak acquires previously “Cut and Slashed” dormant fields and live-stock grazing land in ecologically sensitive areas of beautiful Panama
18. Project Methodology… Preparation and Planting Following hand clearing and cultivation of the land, high-quality Teak Seedlings are selected from certified growers and planted during the optimal rainy season
19. Project Methodology… Protection and Growth Cycle The skilled forestry team at UTMG ensures complete care and maintenance of the entire Teak plantation over the projected Twenty-year growth cycle 18 Months 48 Months
20. Project Methodology… Plantation Management UTMG manages all aspects of the Project through final harvest and ultimate sale of Client timber to selected Teak distributors, wholesalers and end-users
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22. Typically, each parcel purchased is planted with approximately 1,100 quality Teak seedlings obtained through a recognized local Panamanian grower, although other various species of trees can be mutually agreed upon
30. Price refers to plantation sawn wood, and includes small sizes ITTO (1) reported teak log prices as of October, 2005
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32. When historical inflation trends are added to “Growth Value” the return on your Teak purchase increases to over 900%... Or more than 9 times your total investment
33. Our conservative calculated returns do not take into account the value of you paying for your investment over 20 years… That is an additional benefit and investment security mechanism unparalleled in the reforestation investment industry Return Example: Full Parcel of New Seedlings $254,400 Harvest value of full Parcel with 0% increase (1,100 trees) (41,800) Purchase Price (over 20 years) Growth appreciation at today’s prices - “ Growth Value ” $212,600 508% Total Return Multiple of cost 5 X’s $433,200 FUTURE harvest value of full Parcel (1,100 trees) (41,800) Purchase Price (over 20 years) Growth appreciation calculated at conservative 3% increase $391,400 936% Total Return Multiple of cost 9 X’s
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35. Drop in deforested Teak price is related to political situation in Myanmar and international deforestation laws
36. Plantation Teak prices steadily increased the last five years with projected long term annual growth of 5.5% to 7% (1) Natural Deforested Teak Plantation Teak FAO ITTO (2) (3)
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38. Average annual Teak timber price growth rate of 3% was applied to harvest years 10 through 20
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40. The expected cubic meter value at each scheduled thinning / harvest has been calculated utilizing a moderate 3.0% annual increase in already conservative Teak timber prices… The market trend since 1972 has averaged more than 5.5% Projected Teak Price
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43. Comparing Teak to Conventional Investments When you compare anticipated appreciation in value to conventional investment alternatives…Teak greatly exceeds the competition United Teak 16.5% And if history repeats… Over 113 Times Purchase Price Compounded annual return – Last 32 years 11,378% 11 Times better than the US Stock Market 7.4% 8.0% 3.1% 5.0% 6.1% 8.8% Total Return % after 32 years 1,366% 454% 1,087% 915% 5,000% 7,500% 10,000% 12,500% U. S. Real Estate Gold Bullion U. S. T-Bills / Bonds Nikkei (Japan) CND. Stock Market (TSE) U.S. Stock Market (DJ) 627% 258% 2,500%
44. Primary Influence How are these returns consistently achievable? Ever-increasing demand Limited world supply Quick growing resource
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46. Growing region must be at the correct elevation with distinct wet and dry seasons
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48. Good quality plantation Teak requires sufficient care and maintenance in the early years in order to produce marketable timber
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50. The high oil content of teak wood provides natural resistance to insects, fungus, fire, water and toxic acids
51. Recognized globally as a quality construction material that will endure the test of time, lasting for decades and even centuries
52. Teak is an essential construction material in ship and yacht building, joinery, flooring, decorative carving, cabinetwork, paneling, turnery, specialty fixtures, tanks and vats
53. Demand and new applications for Teak wood are ever increasing, while good quality timber is decreasing at a rapid pace
61. Fungus / biological… No known cases in Panama of mass fungus or biological destruction. If present, fixed by implementing an effective spraying program
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63. Our expert team of on-site foresters oversee all phases of the growth and management process including annual maintenance and fertilization High motivation for continued proper management… UTMG fees are based solely on quality of final harvest
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65. Fire… Forest fires highly unlikely in the tropics and the trees high oil content make them impervious to fire once they are a few years of age. Fire ditches are maintained during the dry season to reduce accidental fire risks
66. Theft… Logistically impossible as workers live onsite and work the plantation daily. UTMG staff and foresters provide regular oversight and inspection. Site is fully protected with a security fence with no hidden or concealed access points
67. Unforeseen destruction and catastrophe… None know to the region UTMG guarantees your Teak saplings… Should any trees within the first two years of planting not perform to industry standards, they will be replaced and replanted at our cost
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69. Viewed as one of brightest democratic success stories of the last century
70. Strategically important to the United States and regional stability… A member of the Central American Free Trade Agreement (CAFTA) with United States
78. Chief Operation Officer with over 16 years experience in managing agriculture projects in Panama
79. A full time forester highly educated and experienced in soil rehabilitation and Teak plantations
80. Full time plantation site manager overseeing a team of various full time and seasonal plantation employees
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82. The quality of plantation Teak wood has greatly increased due to improved planting and maintenance practices, resulting in increased demand for the precious natural resource
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84. Recent push to establish plantations in indigenous regions of Southeast Asia and India will not enter the market for many years after plantations in Panama are ready for harvest, due to the quick growing cycles in the region The best hedge against time and market risk… Price leverage!
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86. The chart below depicts what would happen in the unlikely event that the future value of Teak wood (relative to other goods and services) declines by 50% Normal inflation $254,400 Zero inflation ZERO $254,400 ($127,200) $127,200 204% 2 X’s Today’s wholesale yield value of one parcel Inflation rate (same as last 15 years) Future wholesale value Less: 50% drop in market value Harvest proceeds Total return (vs. $41,800 cost) Multiple of cost $254,400 3.0% $433,200 ($216,600) $216,600 418% 4 X’s
93. Use your mouse to click anywhere to advance to the next discussion point or slide The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.