ADVERTORIAL
Despite the credit crunch, investors are still looking for places to put their money, especially in this era of rock-bottom returns. But there is a solution – and it’s green and ethical into the bargain.

Trees have weathered many a crash in the financial markets. Timber investments worldwide have seen a steady return over the past two decades compared with volatile stocks and shares. Trees do not move in step with economic cycles. You don’t have to harvest them when demand and prices are soft. It’s the ultimate set-and-leave investment.

As the global recession takes hold, causing a sharp downturn in the housing and building industries, investors may be concerned about what that means for timber. But the reality is that there is still a scarcity, especially in China, the world’s biggest timber importer.

Oxigen operates commercial tree plantations in tropical countries such as Sri Lanka and Malaysia. Its two main hardwood species are teak, which is of course famous the world over for furniture and fittings, and the exotic aquilaria tree. Aquilaria produces agarwood, which is used for incense and making perfumes in both the Middle and Far East.

Private buyers lease plots of forest on Oxigen’s commercial plantations for the time it takes the trees to mature. Investments start at £10,000 for 300 teak or agarwood trees. When the trees are harvested, clients take a profit. Investors can either plant trees from sapling or – if they are seeking faster returns – buy some that are already in the ground..

In it for the long term
Aquilaria can be ready for harvesting at six years, while teak takes between 14 and 20 years to become fully grown. So trees are suitable for those seeking a relatively long-term investment, including self-invested personal pensions and Child Trust Funds.

Timber also appeals to people looking for an ethical and green dimension to their investments. Forests help offset climate change because trees absorb carbon dioxide, one of the main greenhouse gases, better than anything else. On Oxigen’s plantations, trees that have been cut down are replaced by new ones on the same land, so creating sustainable forests for generations to come.

A taste of agroforestry
Investors looking for a regular income stream may care to consider a concept called agroforestry, which has been pioneered by Oxigen. This, as the name suggests, is neither pure forestry nor pure agriculture. It is rather the growing of trees and crops on the same piece of land. Research shows that agroforestry can be more biologically productive than monoculture, which is where trees and crops grow separately on their own.

The integrated trees and crops benefit each other to enable maximum use of the land. During a forest’s early years, there are many opportunities to interplant crops between the trees which are not only profitable, but also provide nutrients into the soil, stimulating tree growth.

Oxigen is growing only proven crops such as maize, which have a global market value and performance history. Agarwood also grows well beneath the canopy of the trees, as does tea.

Agroforestry is a new and different type of investment, which can deliver fixed returns. Clients can buy land in ten-acre blocks on a plantation. From Oxigen, backed up by harvest profits, the owner will receive an annual rental income of between eight and 15 per cent, paid every six months.

Green benefits
There is also a green aspect to agroforestry as it helps countries like Sri Lanka reduce the need to import to meet their own internal requirements.

All around the world, the rainforests are being lost to indiscriminate logging, and new trees are desperately needed to replace them. Commercial plantations such as those operated by Oxigen provide an answer. Many products claim to be environmentally friendly, but forestry and agroforestry provide an opportunity to participate in investments that are genuinely green – and good for the planet.

Contact: Oxigen Investments Plc 0800 021 33 44, www.oxigen-investments.com