Monday, January 29, 2007

Investors can harvest big returns from wood

Touchwood Forestry Co Ltd, which claims to be Asia's most successful operator of private forests, aims to list its Thai operations on the Stock Exchange of Thailand (SET) in the fourth quarter.
Steve Griffin, the group accountant of Touchwood Group, said its reforestation business had offered individual investors the chance to be part of a lucrative investment since 2004. The company has 400 clients investing in its first three agarwood plantations in Prachin Buri province.
Around 60% of its clients are Thais while the rest are investors from Sri Lanka and the Middle East who have done business with Touchwood for years.
Nevertheless, the name of Touchwood Forestry was unfamiliar to many Thai people so it was difficult for them to invest a significant amount of money in the company, said Mr Griffin.
''Therefore, to become a SET-listed company and to be strictly monitored by the Securities and Exchange Commission could help us convince local investors about our credibility and improve our sales opportunities as well,'' he said.
Touchwood Forestry is a part of the Hong-Kong-based Touchwood Group. Touchwood Investment Co is another unit that manages reforestation of mahogany and vanilla trees in Sri Lanka and is listed on the Colombo Stock Exchange.
Touchwood Forestry holds Board of Investment privileges to plant agarwood and sandalwood in Thailand for export. The BoI incentives offer an eight-year corporate tax holiday for the 1,900-rai agarwood plantation.
According to chief executive Pierre Maloney, the company plans to purchase 10 land plots in Prachin Buri totalling 1,900 rai. The land would be owned by Touchwood Forestry, of which 51% of the shares belong to Thai shareholders.
Currently, the company has around 1,000 rai in hand for its first four agarwood plantations.
Each investor is allocated plots ranging from 25 square metres to 2.5 rai to grow agarwood trees, which take six years to mature. Touchwood will then cut them and sell them in overseas markets, returning revenue from sales to the investors.
Returns on the investment in Thailand would be 18-22%, the company said.

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