Teakwood, Coconut Water and a Belize Private Investment that Makes Total Sense

Edward Kim  |

I was interested in this story after watching the administration battle with Canada over trade regarding lumber, and dairy and other commodities. According to multiple sources the teak industry is going through a major transformation. The countries that have been the traditional sources of teak are placing bans and regulations on the logging and exportation of teak in their countries. This will obviously effect supply which is why it tweaked my interest.

Simultaneously, teak production in countries in Latin America is ramping up. The teak plantations of Latin America are poised to fill this void. TKO Farms, Inc. has contracted to acquire a 512-acre farm with a proposed additional 400 acres in Belize.

Of the 512 acres, 312 acres are in hardwood trees, consisting of 76,532 teak, 16,500 mahogany, 5,460 Spanish cedar,1,700 sapodilla, 9,500 coconut, 2,196 soursap, 8,500 orange, 550 lime and 763 zircote , for a total of over 120,000 trees.

200 acres are planted in cash crops, and it is from this that all current farm income is derived. The hardwood trees are like an annuity, with each passing year they grow older, larger and more valuable. The 400-acre farm will have after planting, 65,550 teak, 18,750 coconut and 9,000 soursap, for a total of 93,250 trees.

The teak reaches harvesting value when the heart wood grows to occupy the entire diameter of the tree, approximately 20 to 25 years after planting. The mahogany and other hardwoods take an additional 5 to 10 years. The real value is in the teak. Below is a cool video from the company website.

Cash Crops

There are more than 50,000 cash crop trees growing or to be planted, including coconut, citrus and soursop. The coconut has long been an indelible part of Latin food and culture. The dried meat, known as copra, has become a profitable sector, it is from copra where coconut oil is extracted. Products that use coconut components, include coconut water, desiccated coconut, coconut flour, coconut sugar, dried coconut fruit, coconut milk, virgin coconut oil, coconut vinegar, coconut jam, and coconut nectar syrup.

There is great demand for coconut products, in particular coconut water, in the U.S.. The interest in coconut products is due to many consumers seeking healthy alternatives and functional food products. Coconut is highly recognized as a “functional food”. Coconut is also becoming known for its healing benefits, aside from the high nutritional content. People have realized that coconut has benefits for health, for well being, for having good flavor and taste, and being a very versatile product.

The soursop fruit is known for its medicinal value. It contains certain natural compounds with medicinal benefits, which make it beneficial for the treatment of various ailments. Recently, it has gained popularity due to the fact that it can kill cancer cells up to 10000 times more effectively than chemotherapy drugs, without side effects. Soursop fruit regularly sells in the U.S. for $10.00 per pound and up.

Belize is an economically and politically stable country, which has embraced its 36-year old status as an independent country by opening trade and tourism avenues to the world. Travelers and business partners alike are made to feel welcome by the friendly atmosphere symbolic of the people and government of Belize.

The teak wood industry has undergone a dramatic change in the global market as reliance on supplies from countries in Southeast Asia. India, Thailand, Laos and, by far the most significant, Myanmar, are being supplanted due to extensive logging of the natural teak forests. In the past several years, each of these countries have implemented bans on the exportation of unprocessed teak logs.

While demand for teak has continued to grow, the industry was forced to turn to a new region for supply, specifically, Latin America and Belize. This makes right now an excellent time to invest in a teak plantation as the demand for teak is increasing while the supply from traditional sources is decreasing. The teak plantations of Latin America and Belize are poised to fill this void. There are more than 220,000 trees already growing or to be planted between the two TKO Farms, Inc. tree farms, of which 142,082 are teak.

Cash crops provide immediate and sustainable revenues and coconut and soursop products are in great demand due to their healthy and healing benefits making this an interesting story for short and long term investing.

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