Big Lands Brazil

Eucalyptus

The core and primary business activity of Big Lands Brazil is Eucalyptus plantation investments. We work in a consulting, management, project acquisition, project setup and post-project setup management for our clients.

Client Investment Strategy

Big Lands Brazil has created a fund strategy for accredited investors (or equivalent), companies, and funds seeking long-term, consistent returns based on a conservative business plan in the surging market of Brazil. This investment is designed as a trusted option to gain access to the emerging market of Brazil in a safe manner, truly unique in the marketplace. The investment is not designed to be creative in taking on unnecessary risk. Eucalyptus, one of the world’s fastest growing tree species, is cultivated in Brazil to excel in the warm and wet climate. Soil preparation and maintenance is less than other industrial plantation setups such as Palm. With wide-ranging applications including paper, particleboard, furniture production and emerging technologies to adapt Eucalyptus for renewable energy generation, we project a market expansion of 500% over the next 15 years. The UK alone will require over 30 million tons of biomass per year in the near future as a renewable energy source. Longer term projections show Eucalyptus as an ideal source for third generation cellulose ethanol production. The BLB "Short-Rotation Eucalyptus Reforestation Investment" meets investor needs as follow:

The Big lands Brazil Strategy for our clients:

• The investor owns all land in full either individually or through a corporate structure.
• Land is purchased below market value in areas with strong expected appreciation.
• The end product Eucalyptus is targeted to have sale agreements before investment is made.
• The market for the end product has room to expand 500% over the next 20 years, securing sales
• The 1st rotation projected ROI is 14% (lump sum compounded annually), subsequent rotations have similar returns based on reduced initial planting costs.
• The product’s end-use for clean energy purposes enhances sustainable or environmentally responsible aspects of any investment portfolio.
• The project replants trees in the Amazon region originally deforested for cattle farms.
• The investor has several exit options, including reforesting the land with native forest (creating a private reserve), selling to reclaim equity, or repurposing the land for a new project.

Big Lands Brazil has worked hard to design this investment to be more competitive than the competition. The land we source for our clients has a lower price tag, the planting costs are less because we have strong relationships on the ground. We anticipate that on a large scale plantation US$1500 dollars per acre planted is a reasonable price that an investor will pay the first year. Please contact for more details.

Our Current property and project Offering:

• Short-Rotation Eucalyptus Reforestation Investment Properties (PDF)

Please contact us for more details.

Eucalyptus S.W.O.T Analysis

Strengths

• Excellent ROI
• Working to reforest pastures
• Carbon sequestration higher than native forest
• Multiple market end users
• Guaranteed future market
• Relative low setup costs
• Easy to administrate
• Low risk for all involved
• Certification Schemes (FSC) to solidify Market Position

Weaknesses

• Medium-term ROI for investor (6-8 years)

Opportunities

• Unlimited marketing potential
• Unlimited market growth potential

Threats

• Potential for other schemes to supplant this tree as a more versatile, faster growing tree or to introduce genetically engineered (GE) varieties nearer to end-use markets such as Southeast US

Past Negative Constraints to Privately Owned Eucalyptus Plantations?

Until the past decade, a majority of farmed Eucalyptus wood fueled the charcoal and wood pulp industries in Brazil. The large wood pulp mills held their own plantations as a hedge against price fluctuation.

Since 2006, prices have doubled, yet supply has not met demand due to the emergence of Eucalyptus in biomass and wood paneling particle board.

Privately held plantations and cattle farms are now seeing increased interest from foreign investors to reap the benefits of this surging market demand.

Why not other trees?

There are other trees such as Teak that are grown in Brazil on large scale operations. Teak is a hardwood, so there is no reason to use this type of wood in biomass, though any tree can be burned to create electricity. These trees however have not been tried and tested to the extent that Eucalyptus has in the market place. Our target is zero risk and our goal is to work in high volumes. Other trees do not have the guarantee that Eucalyptus has proven.

Supply & Demand

The current price of Eucalyptus is R$80 to R$100 per m3. Wood chips sell for approximately €130 per ton in Europe.

Wood Pulp

Represents the most widespread industrial application of Eucalyptus wood. The tree’s white fiber makes it less expensive to process and ideal for the wood pulp industry. A new pulp mill is planned within the region that we target.

Charcoal

The market for charcoal from Eucalyptus is primarily for the steal industry. 40% of the Brazilian Eucalyptus planted is designated for this market.

Biomass

Biomass is the new growth market for fast-growing trees. A typical electric generation plant will consume 3 million tons of bio-mass annually.

Wood Products

Several new MDF and wood products facilities are opening in Brazil, including a new facility, which processes 180,000 tons of Eucalyptus per year in the specific region that we target.

About Eucalyptus

Timber barons introduced Eucalyptus to Brazil in 1910 to replenish native forests and sustain the charcoal industry. The species thrives in the Brazilian climate, and today approximately 5 million hectares are planted. The wood is highly appreciated by the charcoal and pulp and paper industries.

Brazil is now the world’s top producer and exporter of eucalyptus wood and pulp. Its uses by local industry are myriad—Eucalyptus wood is in heavy demand from the iron, pulp and paper industries. A positive secondary effect of the species’ popularity and adaptability is the preservation of native forests.

Brazilian eucalyptus plantations achieve world record-setting growth rates, typically growing more than 35 cubic meters per hectare per year. When well-managed, the plantations are sustainable and endlessly replantable. Commercial harvesting occurs after five to seven years, but year-on-year growth is constantly improving due to governmental development efforts and research funding.

The plantations are generally owned and operated for national and international industry by timber asset companies or cellulose producers such as Fibria and Suzano. In the 1990’s, Brazil exported approximately US$1 billion, and by 2005, US$3.5 billion. This trade surplus has drawn large to the agricultural sector.

The European Investment Bank and the World Bank have given full public support for foreign investment in Brazil’s pulp and paper industry and cellulose processing plants. Private industry in Brazil has invested US$12 billion so far in pulp and paper since 1993 and has recently pledged to invest an extra US$14 billion within the sector over the next decade. The forest products industry accounts for 3% of all global trade, accounting for over US$200 billion per year. The recent presence of many foreign TIMOs is a reassurance of the economic potential of the forestry activity. Overall, Brazil is expected to produce 55% of the world's Eucalyptus round-wood by the end of 2011.

Eucalyptus is a diverse genus of flowering trees (and a few shrubs) in the myrtle family, Myrtaceae. Members of the genus dominate the tree flora of Australia. There are more than 700 species of Eucalyptus, mostly native to Australia. The species of Eucalyptus are cultivated throughout the tropics and subtropics including the Americas, Europe, Africa, the Mediterranean Basin, the Middle East, China and the Indian Subcontinent. Eucalyptus has attracted attention from global development researchers and environmentalists. It is a fast-growing source of wood, its oil can be used for cleaning and functions as a natural insecticide. Two note worthy species are Eucalyptus grandis and Eucalyptus urophylla, which were both developed and chosen for the specific climate of Brazil. These species exhibit some of the highest growth rates known globally, providing an attractive return on investment for wood-related products. Eucalyptus is considered the world’s top quality pulping species due to its high fiber yields. It is also used in a number of industries, from fence posts and charcoal to cellulose extraction for bio-fuels. Fast growth also makes eucalyptus suitable as windbreaks and to reduce erosion. In the Big Lands Brazil-targeted areas of Brazil, the E. grandis and E. urophyllahybrid E. urograndis is the preferred cloned varietal, best suited for warding off the regional pests while maintaining an exceptional mean annual increment (MAI) over 35 cubic meters per hectare per year. The Eucalyptus hybrid urograndis prefers full sun and good soil drainage. The Amazon sun is ideal for this species as is the soil. The region is tectonically and geomorphologically stable with two main types of soil, Latossolosand Podzolicos, making up 73% of the total Brazilian Amazon. This soil is the same class found in the Eucalypts’ native land, Australia, and is known for it’s good drainage -a key ingredient to healthy growth rates.