CLICK TO ADVANCE END SHOW Use your mouse to click anywhere to advance to the next discussion point or slide The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.
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CLICK TO ADVANCECLICK TO ADVANCE END SHOW
Use your mouse to click anywhere to advance to the next discussion point or slide
The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs.
No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.
– Save one of the Earth's most precious natural habitats: the tropical rainforest
…while
– Providing individuals, businesses, and institutions the opportunity to build their financial futures
– PMG is a Costa Rican based management and development corporation founded by CEO Ron Fleming
The Pacific Teak Reforestation Project began in 1998 and is managed by the Pacific Management Group, Inc. (PMG)
– PMG has full and unencumbered authority to develop, market, and manage the all aspects of the Project and its assets …employees, equipment, land and trees
Trees guaranteed to grow…with complete life cycle management
• Customers purchase “Parcels” of planted Teak trees with a guaranteed (1) yield/number of trees at final harvest
• Typically, parcels of newly planted seedlings are made available…although older/mature trees are sometimes available for purchase
• PMG provides customer’s with:
– Complete planting, care and maintenance of trees purchased throughout the growth cycle (15 years for new seedlings)
– Cut and prep services (conversion to saleable logs) at final harvest
– Selling in wholesale Teak market …PMG will sell trees on customer’s behalf at best available wholesale prices (or deliver to the customer at customer’s request)
• The Purchase Price is the only out of pocket cost to customers… a 6% fee is also deducted from customer’s final timber sale proceeds to cover management and selling services provided by PMG over life of contract
(1) If for any reason the land set aside to grow the trees does not produce the contracted yield at final harvest, PMG will make up the difference from its private reserve of Teak trees.
Current cost of a full Parcel (240 trees at final harvest) is $42,000…Smaller increments are available, down to ten (10) trees at final harvest ($2,500)
170203,7501,2005 Parcels
42,000
12,500
5,000
$2,500
Purchase Price
175240Full Parcel
60
21
10
No. of Trees
2081/4 Parcel
23821 Trees
$25010 Trees
Price per Tree.Purchase Size
36%
33%
17%
5%
-
Discount
$1,900 Down
$215 per month for
5 Years
Financing is available on the purchase of ¼ parcel or greater …no credit check required
Return Example:Full Parcel of New SeedlingsReturn Example:Full Parcel of New Seedlings
Asset Value / ReturnsAsset Value / Returns
• When you buy one of our Teak “Parcels”… you are actually paying only a fraction of the asset’s value at maturity based upon TODAY’s wholesale prices!
$228,000Current harvest / wholesale value of a full Parcel (240 trees)
(42,000)Purchase PriceGrowth appreciation at today’s prices (“Growth Value”) $186,000
443%Total ReturnMultiple of cost 5 X’s
$355,000
FUTURE harvest / wholesale value w/ conservative price increase (3.0%)
(42,000)Today’s Purchase Price
Growth appreciation $313,000
745%Total ReturnMultiple of cost 8 X’s
• This means the value of your initial tree purchase will increase 5 times faster than its cost simply by growing… we call this “Growth Value”
• When historical inflation trends are added to “Growth Value” … the return on your Teak purchase soars to over 700% - or 8 times over your purchase price
• If historical price trends continue…the value of your Pacific Teak purchase will far exceed the appreciation of conventional investments
• Assuming a conservative 3% annual teak timber price increase, the investment in one parcel of Pacific Teak is projected produce an average annual return of 14.8%
2. Deforestation…has occurred in many regions suitable for growing…
“While forest area in developed countries has stabilized and is slightly increasing overall, deforestation has continued in developing countries.”
-- 2001 State of the World’s Forest report published by the United Nations
1. Environmental requirements severely limit suitable growing regions:• Teak only grows satisfactorily within 10-15 degrees of the equator
• Growing area must be at the proper elevation with distinct wet and dry seasons
• Only equatorial regions of Central / South America and Southeast Asia / Africa possess the desired temperature, humidity and rainfall characteristics needed
3. Pressure from the United Nations and key governments forcing new legislation to prohibit the cutting of indigenous Teak trees
…plantation Teak is the wave of the future, but supply will be limited
– Insects…no indigenous harmful pests. Only exposure is to roots within first year or so of planting. Problem easily avoided by proper preparation / insecticides
– Fungus/biological… no known cases in Costa Rica of mass fungus/biological destruction. If present fixed simply by spraying
– Growth… inferior growth can result from neglect, or inferior soil/climate conditions. At Pacific Teak we:
• Select farms with only grade 1 soil conditions situated in optimal growing regions
• Our expert team of on-site foresters oversee all phases of the growth and management process including annual maintenance and fertilization
High motivation for proper management… two thirds of all plantation trees belong to PMG
– Hurricane / Flood… hurricanes are extremely rare in the region… trees/farms receive sufficient rainfall nine months of the year… easy handled by topography and proper irrigation...
– Fire…forest fires highly unlikely in the rain forest… trees high oil content make them impervious to fire…if set or accidental…. would only expedite growth/fertilization
– Theft… logistically impossible• Workers live onsite and work the plantation daily• Foresters provide weekly/daily oversight and inspection• No hidden road access… mass / concealed theft not possible
PMG guarantees your trees…should any shortfall occur for any reason, PMG will take trees from its own, private stock to complete your order
• Stable government… a democratic republic for nearly 200 years
• Costa Rica possess the optimum conditions for growing Teak
“Although not indigenous to Costa Rica, this tiny country provides a uniquely perfect geographical, climatic, and geomorphologic condition for the production of high quality Teak, and with some of the fastest growth rates of Teak in the world being recorded in Costa Rica.” -
- Teakwood Commercialization 1998
• Progressive business environment… tax incentives and ownership laws/rights encourage plantation development…economy relies heavily on foreign investment, trade and tourism
Why is Costa Rica ideal?
• Radical shift in historical governmental process unlikely…– Widespread land ownership and voter participation in general elections …viewed as one
of brightest democratic success stories of the last century– Strategically important to the U.S. / regional stability, a member of the Central American
Free Trade Agreement (CAFTA) with U.S.)– No indigenous military… making change by coup unlikely.
• Ron Fleming, PMG Founder, Chairman of the Board– Successful business owner, manager for over 20 years– Highly experienced in the international Import – Export business– Has been operating in Costa Rica for over ten years
Highly professional team assembled to manage your asset’s growth:
• Strong operations team– Chief Executive Officer, corporate law expert with over 30 years of experience in
managing businesses in Costa Rica
– Chief Operation Officer with over 15 years experience in managing agriculture projects in Costa Rica
– Two full time foresters, highly educated and experienced in Teak
– Three plantation site managers, and a team of 7 full time and over 50 seasonal plantation employees
• Strategic Alliance with Team2Market (www.team2market.com) to assist and support all business strategy and development aspects of Pacific Teak
– Life Cycle Protection Guarantee… For each parcel purchased, PMG will plant, transfer and hold in Trust for the life of your purchase agreement one additional parcel of Teak trees. These trees are automatically transferred to the buyer by the Trustee in the event PMG fails to perform any of its contractual obligations.
What if PMG/management fails in its mission?
– Pacific Management Trust• U. S. administered Trust
• Trustee: John M. Schau, Esq., is a licensed attorney in California, U.S.A., and is conversant in Spanish. John has been instrumental in obtaining regulatory approvals for our operations in Costa Rica.
• John physically verifies the GPS coordinates of every customer’s Timber Deed. He also verifies and holds Timber Deeds issued under PMG’s Life Cycle Protection Guarantee
PMG is highly committed and motivated to perform … as PMG’s contractual obligations are met, Trees held in Trust revert back to PMG
• The hardest risk to manage… unforeseen market changes.
• Certain factors mitigate this risk:
– Because of its unique qualities, Teak has always been in high demand… now more than ever
But, the best hedge against time/market risk… Price leverage!
– Supply is becoming more limited• Worldwide legislative trend toward rainforest preservation and
prohibiting cutting of indigenous Teak and other tropical trees
• Recent push to establish plantations in indigenous regions of Southeast Asia and India will not enter the market for many years after Costa Rica’s established plantations