Investment Model
In our model, the expected return rate (IRR) is 14% annually compound, considering an allocation price of $2.60 for each stock at the launching time.

*Estimated prices according to more than 14% annual rate.

Our business plan contemplates the allocation of common stocks in the Stock Market. Each stock has equal rights and benefits, since there are no preferred stocks or stocks with privileged rights. For this matter and with the purpose of reducing and eliminating risks for our investors, before the initial public offering process, we proceed to buy high quality land and sow it following the best forest practices. Also, we incorporate the economic resources needed for the plantation’s operation until the first harvest. Finally, once the process has been completed, we allocate the stocks on the Stock Market. This way, once the investors join the project, it has a plantation fully sowed and with the resources needed for its lifetime. Therefore the allocation of the stocks has no economic impact on the project.

Once you acquire stocks from our teak plantations, you will not only become a beneficiary of the earnings that come with the first harvest, but also from the future earnings that will arise from the following harvests, since teak is a species known for its capacity to sprout again.

In our model, the expected return rate (IRR) is 14% annually compound, considering an allocation price of $2.60 for each stock at the launching time.

Advantages

Wood Prices: Considering that teak is a long-term crop, wood prices may vary. The historical behavior of prices has been of a constant growth, as a consequence of the demand increase in this kind of product. Also, China’s and India’s active participation in the commodities market generates the expectations that the demand for this kind of product will continue to grow.

Production level: Since teak is an agricultural crop, production volumes depend on multiple factors, such as the quality of the land, the seed and the maintenance given to the plantation. We have taken all precautions in choosing the land appropriately, importing certified seed and having a professional team to maintain the plantation.

Country’s environment: In Ecuador, national and foreign investors are treated the same, which means that they have the same rights according to the law. As far as the exchange risk, Ecuador’s current currency is the US Dollar. Nevertheless, political and economical risks can never be ruled out in Latin-American countries. In our understanding, being teak an export product, the exchange risk does not constitute a relevant factor.

Insurance Policy: Teak is immune to fire since its 4th year, therefore, during the first years we take all necessary precautions. Nevertheless the plantation has an insurance policy with Seguros Cóndor, which considers a payment growth rate of 15% annually in case of a sinister. With this rate, the opportunity cost of the investor is covered. This insurance has already been paid for all of our plantations.

Wood resistance: Teak is a species very resistant to plagues.

Property legal status: The property is fully documented and has all the legal inscriptions required.

Minimum Investment

There is no minimum investment amount, but for local investors we recommend a minimum shares or $2,400 and for foreign investor we recommend an investment of a minimum US $6,000 at the beginning of the initial public offering process.

Maximum Investment

The maximum investment amount is about 10% of the company; nevertheless, being a company that quotes on the stock market, we cannot forbid the purchase of a higher amount. To avoid any problem to the smaller investors, the arrangers keep approximately 25% of the company.

 

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