Touchwood pioneers in Agro-forestry

Sara PATHIRANA

Touchwood Investments PLC are pioneers in the Agro-forestry industry in Sri Lanka and is one of those companies that thrive on profiting with the aim of environmentally providing a much needed boost in sustaining nature in the process. Management of forestry has been recognized as one of the most stable and gainful investments by investment firms and people throughout the world. Investing in trees has become the safest investment option in the world today.

Daily News Business had an exclusive interview with Touchwood’s Group Chairman and Founder, Roscoe Maloney and Chief Operating Officer,

Jeffry Ebert who contributed with their insight.

Q: How has your journey been so far, since your inception in 1999?

A: Since our inception as a registered company in 1999, we have established business models that are self-expanding and we have come a long way for our 13 years. We are a 100% asset-backed company with 44 plantations being managed in 4 countries. We initially commenced on a start-up capital of Rs. 500,000 and purchased a 30 acre land in Ayagama. Since 2007 we have had a returns flow of our harvests with our proven business model.

I had the nationalistic idea of commencing with the jak tree but through research and revision, mahogany seemed to be the suitable candidate for this venture, as mahogany can be harvested in 15 years. I realized the potential for commercial value in planting trees, where a higher returns rate can be acquired and sustained as an unwavering investment. Especially with deforestation that is being experienced today, I felt that this issue needed to be addressed and if I could make a small change, then this was an ideal place to start.

We serve over 25,000 clients worldwide and we strive to deliver a productive future in Agro-forestry and we are also the only quoted, public company and got listed on the Colombo Stock Exchange (CSE) in 2002 and ISO certified Agro-forestry Company in the whole of South Asia. Currently, from our financial aspect, we have acquired a ratio of 4:1, where our assets are four times more than our liabilities.

We have 37 plantations in six districts islandwide with nearly 300 employees on a contract basis that eventually increases during the harvest period. During such periods, employment opportunities take fold and people in surrounding areas get the chance to work and we in turn, get to contribute towards the livelihood of those people as well.

Q: Why should people invest in managed forestry?

A: Our priorities are straightforward and simple; we follow the triple bottomed line of the 3 P’s - People, Planet, and Profit. For the past 40 years, the value of trees has gone up and every year a tree’s value increases by 20%. When comparing to other investment options out there, macro-economic factors does not affect the growth of a tree, as this is an un-correlated investment.

All our plantations are fully ensured against natural disasters. Once a tree has been planted, it will continue to grow and increase in value until the harvest period.

As a result, forestry is not affected by changes in the financial or political influences. So, a stable returns rate would be ensured with the management of forestry where the investor can diversify their portfolio, which in turn is a unique aspect.

We also follow mitigation risk-factors where we take measures of segmenting the plantations, especially in Thailand, in order to help avoid accidents such as fires from spreading and pest attacks. We also focus on contributing to the people in the areas where our plantations are located, where the villagers and farmers there can benefit by obtaining work and we make sure that our staff gains an income with higher than minimum amounts.

With 25,000 global clients, an investor can confidently and physically see his investment’s performance (asset-backed investment). Our clients have the luxury of visiting the location on inspection tours. We generate annual tree and plot reports and each and every tree is audited and clients can request for required details to be provided for them. We maintain this 100% transparency.

Q: How would you describe your business model?

A: Our business model has a 360 degree effect, where we cultivate, harvest, process and manufacture and with our local presence now we have the opportunity to distribute the end product.

We acquire and subdivide land through expert advice and consultations with external contractors with specialist knowledge, then establish the perfect fit for each individual’s investment needs through a wide variety of perennial crops, short-term cash crops and indigenous plants. This practice enables us to provide returns ranging from short-term to long-term plans.

Our plantation management meets or exceeds the global standards for forest management as our incessant process reviewing in conforming to universal best practices. With our harvest process, we employ the latest technology applied by well-trained and experienced staff. Combining of technology and know-how gives us the opportunity to produce an array of high-grade products that meet international marketing standards.

Finally, where distributing returns is concerned, our timber products are sold in bulk through a network of buyers located in 30 countries throughout the world.

This expansive reach, as well as our innovative strategy for generating returns, enables us to sell the investor’s harvest at or above the current market value.

With our value-addition procedures, a harvest such as sandalwood and bamboo is productively utilized. We have also endeavoured to establish Sri Lanka’s very first flooring manufacturing plant using bamboo, through this venture.

We are pioneers in the cultivation of Sandalwood with 10 years of research and expertise. We also cultivate vanilla, bamboo, cash crops such as maize, green gram and sesame seeds, which are primary sources of generating a monthly income, and Agarwood which is grown in Thailand and is the most valuable resinous wood in the world. Investing in agro-forestry is a profitable, proven, non-volatile and socially responsible entity.

Q: What are your future plans?

A: We have a total of nearly 4000 acres with nearly 100,000 trees in Sri Lanka and a total of 400,000 trees in our sister company in Thailand.

We are in the process of expanding to Cambodia, where we have acquired more than 24,000 acres of land. Further expansion in terms of tourism, especially with today’s boom in the respective industry, we are foreseeing to develop and maintain plantation bungalows in places of scenery, where tourists and visitors can come to relax and enjoy the beautiful locations.

This will also generate an additional means of revenue. Inter cropping with existing plantations is another side we are looking into, through expert researcher’s advice.

This means we can optimize on the available space in between the trees such as planting anthurium genus flowers and other species that would be compatible and feasible enough to grow in those spaces. Touchwood Investments major goal is to make way into the Global 1000 in the next ten years!