A tremendous opportunity exists in Central American forestry. Increased demand for lumber products is likely to continue long term. Central America offers affordable and fertile land, relatively low labor costs and positive climate. Sustainable hardwood plantations are one of our favorite investments due to their ability to hedge other investments, positive impact on the environment and outstanding global market dynamics.
Supply for precious hard woods has been decreasing while demand has continued to rise. The resulting price increases, coupled with the low development costs in Central America, make forestry in the region extremely attractive. The International Tropical Timber Organization (ITTO) tracked the decrease in production of industrial roundwood such as teak at 3.3%. In addition to less wood on the market, the world’s largest wood purchasers are making commitments to buy certified wood products grown in sustainable plantations or certified natural timber developments, further narrowing the market. As populations and standards of living increase in places like China and India, demand will continue climbing for timber products such as furniture, flooring and construction. Meanwhile, demand continues to grow from Japan, the US and Europe as well.
Environmental conditions in Central America have suffered due to recent economic growth in the region. Many natural forest habitats have been slashed and burned to make room for cattle and other agricultural uses. The deforestation has been devastating to the local environment. Forestry offers a sustainable industry that has a positive impact on the environment by preserving the natural habitat of indigenous creatures, promoting biodiversity and serving all its needs locally. Projects that plant, manage and commercialize precious woods using sustainable methods create a positive impact while generating significant return on investment. Sustainable practices create an eternal source of jobs, raw materials and income. As a result, the governments of the region support and promote foreign direct investment in sustainable forestry.
Forestry offers a hedge to many other investments, specifically real estate and inflation. Every analysis shows a negative correlation to the stock market. In addition, its sustainability and “green” factor help offset emissions or balance less earth-friendly industries.
Cloud Break Ventures looks to incorporate in its management operations the protection of watersheds, natural forest remnants, wildlife and other forms of biological diversity, within the boundaries of its forestry properties. The areas where ecological values are preserved or restored and maximized will be spatially arranged in such a way as to form a lasting, interlinked ecological network within the plantation and also serve to restore and to preserve ecological corridors for the environment of the plantations. CBV conducts appropriate and reliable monitoring of operations, including social and environmental impacts to continuously improve its financial, social and environmental performance. We aim to operate commercially viable projects in such a way as to complement the remaining natural forest and surrounding eco-systems, and to provide benefits to local communities while creating a healthy financial return.
