Teak trees in a set price per hectare per hectare, based on the actual costs – which are paid to an investment required price – and is therefore less a subjective distortion of the IRRs affected. Teak wood plantations have similar activities and the cost structure for professional managed teak wood should be the same approximate plantations. Therefore, the price per hectare is an ideal and quick comparative to compare investments with industry-wide investment opportunities. From an economic perspective, the price per hectare when entering an investment should be low and high at the time. However, the price per hectare in the context of the risk analysis should be considered.
There could be good reasons give, which is why it is worth to pay a higher price per hectare, when it comes to reducing the risks: sustainability certifications, such as by the Forest Stewardship Council (FSC) should allow it to sell the wood to a wider clientele. Added value generation along the value chain such as a sawmill quality of the plantation Manager (to the plantation to cultivate and maintain) risk-return equation, which may lead also to arguments for a higher price per hectare, than a comparable cheaper option which, however, has a higher risk is influenced by factors such as the above. Conclusion there are opinions from the industry, financial projections are only numbers, which invariably are based on estimates and have to do with the reality of a growing tree. From investment point of view, this is wrong. Visit a plantation just to see whether it is in good condition, for a due diligence is not enough. You should invest only, If the expected rate of return outweighs the risk. This requires a thorough insight into the financial forecasts, the cost price, the risks and how the investment compared to other investment proposals represents. For more information, please contact investing Alternatively.