Teak – short supply and huge demand

  • Strength & weather resistance: Teak (tectona grandis) is a tropical hardwood native to the Far East. Teak grows up to 40m tall and is renowned for its strength and durability. Our mature trees withstands even the most challenging weather conditions due to their high natural oil content. This gleaming brown and dark gold hardwood is familiar as indoor and outdoor furniture, decking & construction, all around the world.
  • Fast growing species: At just six months teak trees are already approximately 10 feet high. By year 2 they are well established as young durable trees starting to gain considerable canopy mass, and reach full maturity in 30 years.
  • High carbon sequestration: In line with its fast growth rates, teak also has one of the fastest carbon sequestration rates. Carbon is removed from the atmosphere and stored in the wood at very high levels. Project dependent this may give teak additional value on the future carbon markets as the world moves to a carbon-indexed economy.
  • Increasing demand: With international boycotts on harvesting natural teak through illegal forestry activities, the supply chain is being squeezed placing more demand on cultivated plantations. With global populations booming in the next 40 years, demand will only escalate.

Teak Quality and Grading System:

  • Teak prices are based on quality, diameter of logs and age. The shape of the tree trunk and the surface of the bark are crucial factors. The grading process is important to the long-term investment. The grading system takes extreme focus on the stem form, curves, defects, etc, there are 3 established grades of classification:
    • Grade A – straight-formed stem, clear on both sides, no knots
    • Grade B – small overgrowth without bulges, clear on one face, minimal sap
    • Grace C – small defects, various color, perfect for flooring and decking
  • The teak trees will be left to mature and increase in both volume and quality. At any point during the 10 years of the investment the trees can be sold and felled.
    It is advised to wait the full 10 years for maximum return on investment, however the investment can be liquidated at any point.
  • Three months should be allow between submitting an expression to sale and realisation of capital.
  • In that time a local timber company will be notified, they will survey and quote for the standing trees, if the quote is acceptable the trees will be felled and sold on your behalf.
  • Should the trees be held in a SIPP the trees must be sold before harvest while still standing to avoid SIPP moveable property restrictions.