PAULOWNIA PROJECT

“Opportunities have never been greater. The task has never been more urgent. An ancient Chinese proverb says: “The best time to plant a tree was 20 years ago. The next best time is now.” We hope that, after reading this report, investors and entrepreneurs will agree and be inspired to make money by taking up the business of growing trees.”

Andrew Steer President & CEO World Resources Institute, Mark Tercek President & CEO The Nature Conservancy for The Business of Planting Trees: A Growing Investment Opportunity

PAULOWNIA PROJECT IS THE COMMERCIAL USE OF PAULOWNIA CLONES

The commercial forestry sector contributes over $600 billion to the global economy (World Bank Group, 2016) each year. E.g. New Forests Pty Ltd manages approximately $3 billion worth of assets. This is more than 780,000 ha.

The current trend in the investment sector is a high-yield agribusiness associated with growing Paulownia trees.

Paulownia is one of the world’s fastest growing trees. It is officially registered with the EU authority for plant species, has a European passport and TÜV quality certificate, as well as relevant EU trade permits. The demand for paulownia is explained by the growing demand for wood. It is often referred to as the “magic tree” or “oil well” tree in the United States and European countries since it generates solid gains. In China, Paulownia is grown on an area of 2.5 million hectares.

PAULOWNIA FEATURES

Paulownia clones are used in commercial technology, allowing to make accurate forecasts for planting efficiency and obtaining a product with specified characteristics.

Paulownia clone features:

  • Extreme weather resistance (from -25/-27°C to +45°С);
  • Growth rate of 3-5 meters a year;
  • Resistant to attacks by termites and wood fretters.

GROWING TECHNOLOGY

  1. Soil analysis and selection of appropriate fertilizer to create an ideal environment for growth.
  2. Site preparation (the site must be plowed and worked with a disk harrow).
  3. Development of an optimal planting layout.
  4. Marking and digging pits of the desired depth.
  5. Planting a technological cut (root system of a one-year-old plant) which allows producing a thick stem of an adult plant.
  6. Installation of a drip irrigation system along with the use of relevant fertilizers which allows making strong forecasts for growth rates.
  7. Maintaining and pruning the trees to increase the mass of the central trunk of the tree, which, in turn, ensures high quality wood.

Paulownia is highly valued in the woodworking and furniture industries. In 5-6 years, a plot of 1 ha is able to produce 240-350 m3 of high-quality wood.

PAULOWNIA WOOD ADVANTAGES

  • Resistant to pests and diseases (due to the large amount of tanning substances).
  • Not prone to shrinkage.
  • Clean, knotless, and fine-fibered.
  • Twice as light as pine.

EXAMPLES ILLUSTRATING PAULOWNIA WOOD POPULARITY

  • The JYSK furniture is made from paulownia.
  • In Japan, paulownia is used in everything - from dishware to musical instruments.

PLAN

  1. Investment in planting of an array of fast-growing trees of the Paulownia family.
  2. Commercial felling in the fifth vegetation year.
  3. Wood sale.

FUNCTIONS OF THE MANAGING COMPANY

  • Land selection and preparation for planting.
  • Selection of high-quality planting material.
  • Arranging and training the staff which will be tending to the trees using special technology.
  • Maintenance of special equipment.
  • Planting.
  • Plantation maintenance (watering, regular treatment, pruning, site cleaning).
  • Security arrangement on the site.
  • Book-keeping.
  • Legal support.
  • Arrangement of the product sale.

The investors save their time and effort since the company will be handling all the complex technological, legal and economic tasks itself. The fund reports to investors on the financial and technical project performance figures on a quarterly basis.

ADDITIONAL INTANGIBLE BENEFITS

ENVIRONMENTAL BENEFITS:the plant is notable for having very large green leaves, processing large amounts of С02 and releasing oxygen. Therefore, the project may be eligible for monetary compensation for low carbon dioxide emissions.

TECHNOLOGICAL BENEFITS: With paulownia clones, it is possible to grow a product which is ready for cutting in a relatively short period of time. The fact that it preserves viability at extreme negative temperatures is another advantage.

SOCIAL BENEFIT: involvement in the Paulownia project compensates for social accountability resulting from other kinds of business.

PROJECT PROFITABILITY

Indicator Figure
Total project profitability, % 171,1
Annual average project profitability, % 34,2
Investor’s profit participation, % 75
Annual average profitability for the investor, % 26,1
*Euro deposit in the Alfa Bank for a period of 5 years, % (example) 2,75

EXAMPLE: HOW MUCH MONEY CAN INVESTOR MAKE?

HOW TO INVEST IN PAULOWNIA PROJECT

  1. Contact the manager to receive a full presentation of the project.
  2. Make a decision to get involved in the project.
  3. Enter into a trust management agreement with a specialized investment fund.
  4. Invest. The method for depositing funds is selected on a case-by-case basis.

The minimum investment is €40,000.

Investors who have a smaller capital can form an investor pool with other participants.

INFORMATION ABOUT MANAGING COMPANY

The project is managed by Flexible Investment Solutions s.r.o, operating under the laws of the Czech Republic. The investment fund is duly licensed (Reg.No 2018/094774/CNB/570).

PROJECT SUMMARY

  1. The demand for paulownia is explained by the growing demand for wood worldwide.
  2. The use of clones significantly accelerates the growth of the plant, making it more resistant to environmental conditions.
  3. The risks that may arise in the course of project implementation are kept to a minimum thanks to proper project management.
  4. The Paulownia project demonstrates high rates of return and thus can be considered a profitable investment option.
  5. The Paulownia project can be deemed a low-risk investment provided that the technology is complied with. This, in turn, is ensured by the managing company.

Got interested in the Paulownia project?

Wish to learn more about investment terms and conditions?
Contact us at CEO@GERCHIKCO.COM