The Plant & Trade Co.

Climate-KIC Education

The Plant & Trade Co. Business Plan

4 September 2012

The Team:Mario ReyesCheryl BoneLisa CouetJerry SzustakowskiManon Tonnard

Address:The Plant & Trade Co.Business IncubatorImperial College LondonSouth Kensington CampusLondon, SW7 2AZUnited Kingdom

Tel +44 (0)7960479227E-mail [email protected],

[email protected], [email protected], [email protected], [email protected]

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Confidential & Copyrights © 2012 – Request permission to share or copy from the author

CONTENTS

0. Executive Summary.....................................................................................................31. Products and Services..................................................................................................42. Start-up team..............................................................................................................63. Marketing.....................................................................................................................74. Business system and organisation.............................................................................105. Realisation schedule..................................................................................................116. Risks..........................................................................................................................127. Finance......................................................................................................................138. Climate Impact..........................................................................................................15

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0. Executive Summary

Customer NeedIndustrial demand of bamboo currently greatly outstrips supply, yet numerous bamboo plantations in Guatemala have been abandoned. Much of that demand comes from the U.S.A., which is half a world away from where most of the commercial bamboo production is done today. In addition, Guatemala is no longer able to meet the textile obligations of its Free Commerce Agreement with the U.S.A.

Purposed SolutionThe Plant & Trade Co. (a.k.a. P&T) will provide a cost-efficient solution to processing bamboo and bridging the gap between the suppliers and buyers in the marketplace. P&T will source raw bamboo materials from farmers in Guatemala and sustainably process this into natural fibres at a purposed plant located near the plantations. The fibres are then sold to manufacturers based in Central America. These manufacturers provide textiles to consumers in Central and North America.

P&T’s managing director, Mario Salan, has an existing network of farmers and manufacturers in the region and expertise in the processing of bamboo, which will allow this solution to be implemented quickly and efficiently. Finally, P&T will address the environmental and social issues mentioned above by creating jobs for the indigenous people through increasing the demand for local bamboo production.

InnovationP&T will create a relatively new market in Guatemala by bridging the gap between suppliers and buyers. It will also utilise existing Free Commerce Agreement between the U.S.A and Central America to become a reliable alternative to cotton. The processing model P&T will employ is sustainable, as it overcomes chemical processing by leveraging mechanical processing techniques. This brings the added benefit of obtaining organic certification. P&T will foster strong partnerships with the farmers through developing monetary ecosystem incentives through CO2 sequestration payments.

Partners and CustomersThe key partners for P&T are the bamboo famers and land owners in Guatemala. The major advantage of this partnership is increasing and consolidating local production to bridge the gap between supply and demand with our customers, textiles manufacturers in Guatemala.

Finance Bamboo plantations have a potential to produce 20 tons per year of natural viscose bamboo fibre. To be conservative, it is possible to introduce 400 hectares of sustainable bamboo plantations in the first phase of a fibre production project, generating up to 6,000 tons of fibre per year with a revenue of €4,241,360 per year.

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1. Products and Services Customer Need

The global market for bamboo goods now exceeds $10bn per year and is expected to reach $15-20bn by much of that demand comes from the U.S.A. (Carp, 2011), which is half a world away from where most of the commercial bamboo production is done today.

Fifteen years ago the Guatemalan government provided bamboo seeds and plantation materials to farmers and landowners to start up plantations in order to reduce deforestation. However, the market was never introduced to the region. As a consequence many of these plantations have been abandoned or very little effort has been devoted to their maintenance.

In addition, the Ministry of Economy of Guatemala highlighted in their 2011 textile industry analysis re-port that Guatemala is no longer able to meet the cotton obligations of its Free Commerce Agreement with the U.S.A. This is due to the instability in cotton supply created by the exhaustion of cotton crop-ping fields and increased sourcing costs (ICTSD, 2010). Bamboo offers a very cost-effective and reliable alternative to cotton, requiring little or no changes to the existing equipment and processes of fabric manufacturers.

Environmental & Social NeedDue to the lack of alternative sources of income, a majority of Guatemala’s population are dependent on harvesting rainforests for their livelihoods. From 2000 to 2010 the deforestation rate in Guatemala was 1.4% with a forest cover of 34% (FAO, 2010). Land-use changes, including deforestation in tropical areas, account for 17% of total greenhouse gas emissions (IPCC, 2007).

Purposed SolutionThe Plant & Trade Co. (a.k.a. P&T) will provide a cost-efficient solution to processing bamboo and bridging the gap between the suppliers and buyers in the marketplace. One of the largest manufacturing demands for bamboo comes in the form of bamboo fibres to be used in the production of textiles. P&T will source raw bamboo materials from farmers in Guatemala and sustainably process this into natural fibres at a purposed plant located near the plantations. The fibres are then sold to manufacturers based in Central America. These manufacturers provide textiles to consumers in Central and North America. Below outlines the value chain of the purposed solution.

Farmers The Plant & Trade Co. Customers

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P&T’s managing director, Mario Salan, has an existing network of farmers and manufacturers in the region and expertise in the processing of bamboo, which will allow this solution to be implemented quickly and efficiently. The cost of raw bamboo materials will also remain stable, as when demand grows farmers will be driven back to the abandoned plantations, thus increasing supply and maintaining stable prices.

Finally, P&T will address the environmental and social issues mentioned above by creating jobs for the indigenous people through increasing the demand for local bamboo production. Bamboo also has the ability to sequestrate large amounts of CO2 from the atmosphere and lock it into its fibres, even after the processing of raw materials has occurred.

InnovationMarket Innovation1. P&T will create a relatively new market in Guatemala by bridging the gap between suppliers and

buyers. 2. It will also utilise existing Free Commerce Agreement between the U.S.A and Central America to

become a reliable alternative to cotton. As bamboo is a woody, perennial plant it features fibres similar to cotton in terms of length and strength, yet it requires no fertilisation and quickly re-grows.

Business Model Innovation3. The processing model P&T will employ is sustainable, as it overcomes chemical processing by lever-

aging mechanical processing techniques. This brings the added benefit of obtaining organic certifica-tion.

4. P&T will foster strong partnerships with the farmers through developing monetary ecosystem incentives. P&T will act as a network to gather the farmers’ CO2 uptake done through bamboo CO2 sequestration and arrange the certificate allocation and sales on the Voluntary Carbon Market for a share in the profits. P&T will also develop the partnerships by offering free advice and guidance in sustainable, yet high yield, production techniques to the farmers.

Value Proposition Given the existing strong network of P&T, and the in-depth knowledge and experience in bamboo cultiv-ation, production and distribution, the market share in Guatemala can be quickly established and grown. This puts P&T in a strong position and helps protect its place against new entrants.

The unique business model takes a multipronged approach to overcoming obstacles and scaling the business. This includes the sustainable processing techniques, the unique approach to maintaining ro-bust relationships with the farmers and the customer segments being targeted.

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2. Start-up team The team consists of four different nationalities and cultural backgrounds with five diverse skills and professional experiences in ten different countries. These characteristics complement one another and manifest themselves in different and clear roles. During the forming process, the team has experienced the challenges implied by this diversity and identified its strengths and weaknesses. Thus, they established and shaped their common vision with the pursuit to succeed.

Mario Salan Reyes (founder) comes from Guatemala and is an environmental consultant who manages sustainable bamboo plantations. He is currently completing his PhD in land management at TU-Munich. Mario manages a farm of bamboo called Santa-Cecilia in West Guatemala. Thereby, his network is very extensive.

Cheryl Bone (co-founder) comes from the U.S.A. and is a management consultant with 10 years of experience in investment banking and sustainability consulting. She will begin a Masters this year in Business and the Environment at Imperial College. She was worked with Accenture and the World Economic Forum in developing sustainable consumption and production models and has also developed market entry strategies for several top tier investment banks.

Lisa Couet (co-founder) comes from France and is an environmental scientist specialising in biodiversity and tropical environments. She is currently completing her Masters in Environmental and Ecological Sciences specialized in biodiversity and tropical environment conservation at the University Pierre & Marie Curie and at Dschang University in Cameroon. The last 6 months, she assessed the opportunities and constraints in establishing a REDD+ programme in the Mbalmayo reserve in Cameroon.

Jerry Szustakowski (co-founder) is a German physicist specialised in renewable energy technologies and has field experience in South America. He is currently completing his Masters at École Polytechnique and ParisTech. He holds a certificate in international competence and has worked as a fundraiser in the United Kingdom.

Manon Tonnard (co-founder) comes from France and is an environmental scientist specialised in oceanography with an in depth knowledge of the carbon cycle and in the climate change. She is currently completing her Masters at the University Pierre & Marie Curie. She has previously worked as a horticultural agent.

The key skill missing in the start-up team is a mechanical engineer to oversee the plant implementation.

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3. Marketing

Market Size and Target MarketThe global market for bamboo goods now exceeds $10bn per year and is expected to reach $15-20bn by 2018. The global market for natural fibre composites reached a total value of US$2.1 bn in 2010 and the demand for natural fibres and resins will continue to grow rapidly, according to the U.S.A. based market research company Lucintel. The textile sector in Guatemala forms one of the largest sources of income to the local population due to the high demands for exportation, with 88% of exports being purchased by the U.S.A. The market for bamboo fibres in the production of textiles is not yet clear, as this will form a completely new proposition within the textile segment of Central America. However, the trade agreements (e.g. The U.S.A., Dominican Republic and Central America Free Commerce Agreement (FCA)) between the U.S.A. and Central America are provided below, highlighting Guatemala’s allocation of 20%, or US$1.6bn, of the trade quota and the corresponding shortfall against that allocation over the past 8 years. Without substituting any existing supply of cotton or any other material, the gap between the trade agreement and actual delivery was approximately €600,000,000 (Stetson, 2012) in 2011, which corresponds to approximately 100,000 tons of new fibre materials.

Bamboo plantations have a potential to produce 20 tons per year of natural viscose bamboo fibre. To be conservative, it is possible to introduce 400 hectares of sustainable bamboo plantations in the first phase of a fibre production project, generating up to 6,000 tons of fibre per year with a revenue of €4,432,320.00 per year.

The gap in the exported textile market above does not have any competitors in Guatemala and the existing suppliers of alternatives (e.g. cotton) is falling due to the inability to produce the required output. This is due to soil requirements of cotton and the monocropping technique employed, which rapidly depletes the soil and consequently effects supplies. Bamboo does not require fertilisers and can continually grow and re-grow for a period of 50 years. The international mission of Taiwan in Guatemala reported in 2011 an inventory of 14,000 hectares of bamboo plantations, capable of prodcuing 139,650 tons of vegetable natural fibres.

Customers and PartnersTarget Customers

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VESTEX (National Association of Textiles Industry) reported in 2010 that there are 50 manufactures in Guatemala of yarn with an output of 61,235 metric tons. These manufacturers would be our primary customers. In fact, in the first few years of production at maximum capacity for one factory, only one average-sized contract would be needed with a single manufacturer.

Segment Company Address Contact

WAR

P

IRIS 17 Ave. 49-55 Zona 12, Guatemala Uri Benchoam Marroquín

IMPERIALTEX Lotificación Los Tanques Lote 55 San Jose Villa Nueva, Guatemala Roberto Zaid Zaid

AMERICA TEXTIL 43 Calle 19-66 Zona 12, Guatemala Marco Tulio Bautista

INDUSTRIA TEXTIL DE LOS ALTOS

Km. 218 Carretera al Pacifico Cantel Quetzalte-nango, Guatemala Patricio Andrade Falla

GREEN TEXTILES Km. 37 Carretera a San Vicente Pacaya Interior SW, Guatemala Young Shin Jeong

Spin

ning

and

w

eavi

ng

ROYTEX Km. 30.5 Carretera Al Pacífico Interior Parques del Lago Amatitlán, Guatemala Saúl Mishan

EXPORTADORA COT-TONTEX

Km. 56.5 Carretera Panamericana Aldea Buena Vista Chimaltenango, Guatemala Fernando Michel

Dyei

ng HILCOSA Km. 30.5 Carretera a Antigua San Lucas Sacatepé-quez, Guatemala Roberto Filitz

Target PartnersVESTEX also identified 260 companies supplying raw materials in Guatemala, however the region has an installed capacity to process up to 400,000 tons of fibres in a year. The gap in the potential versus actual production is due to a number of reasons, including the lack of policies and infrastructure to understand the productive clusters and then set industry standards in technology and innovation. The high cost of energy and the security problems (as the illegal traffic of goods) also substantially effects the industry. In order to react to the international economic crisis and the competitive pressures of Asiatic countries, Guatemala and Central America are generating strategies focussed on overcoming these obstacles. That is why P&T have focused on establishing strong partnerships with the farmers, offering education and advice on plantation management and crop cultivation. P&T also offers the ability to register and take advantage of the financial rewards that can be found by sequestering CO2 from bamboo production and then obtaining and selling the carbon credit certificates. The farmers are our key partners and they are a central part of the company’s strategy.

PricingThe average price of raw bamboo poles is approximately $60 - $180 per ton. The current price of viscous bamboo fibre is € 704-800 per metric ton (FOB1) and in order to compete wit the market a similar pricing strategy will be adopted by P&T. The FCA states that there is a need for investment in the local production of fibres to increase competitiveness of local producers. However, the National Ministry of Economy is encouraging the investment in new and innovative industries by exempting the investments from tax obligations over a period of 10 years (Congreso de la República de Guatemala,

1 Freight On Board, Incoterms.

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1989) The cost of raw bamboo materials will also remain stable, as when demand grows farmers will be driven back to the abandoned plantations, thus increasing supply and maintaining stable prices.

CompetitorsIn the last two years, Guatemala decreases its participation in the U.S.A. market from 2.3% to 1.3% due to the lack of raw materials (fibres). At the moment the installed capacity of the textile industry is oper-ating at 50% of efficiency; therefore, the supply of raw materials in order to use all the capacity is needed. In their last survey of 2011, VESTEX pointed out that all the manufacturers are still receiving supplying requests from the local and the international market, with an opportunity of 100,000 metric tons for the next 10 years.

Historical exportations of textiles to the U.S.A. Main competitors of Guatemala in the U.S.A. marketTextile exportations to the USA market

However, domestic and foreign investors tapping into the Central America’s potential must understand the challenges and appreciate that each country’s market is distinctive and will require a unique approach (Hélène Coulbault, Communiqué de presse 2007, PricewaterhouseCoopers France).

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4. Business system and organisation

Business System

The Plant & Trade Co. purchase the raw bamboo materials from the farmers and process this into fibre.

Processor

Plantation farmers are given the knowledge and skills to efficiently utilise their plantations and be sustainable.

Manufacturers of fabrics in Central and North America purchase this fibre to use for athletic clothing, to replace cotton and to meet the growing demand for ethical fibres.

ManufacturersBamboo Producers

Raw materials Fibres

The business model P&T employs in the figure above will provide free advice to farmers on how to

effectively and sustainably produce bamboo on the already existing plantation. These bamboo poles will

then be purchased by P&T, which will then process organic fibres and sell them to manufacturers of

textiles. The process for producing these fibres is called the Lyocell process. These company activities

can be summarised as consultancy and trade and will be managed in house, with little outsourcing

required.

The key partners for P&T are the bamboo famers and land owners. The major advantage of this

partnership is increasing and consolidating local production to bridge the gap between supply and

demand. The entrepreneurial approach to these partnerships will nurture the relationship by educating

the farmers in sustainable and high yield production techniques whilst at the same time enabling

farmers to receive profits from the carbon offsetting activity found in the CO2 sequestration of bamboo

production. By taking advantage of the large gap in meeting the demands of trade agreements with the

U.S.A. and utilising a new alternative, the bamboo fibres, in textile manufacturing P&T will have little

competition and an abundance of supply.

During the expansion phase, P&T will incorporate additional existing plantations as the demand for the

raw materials becomes apparent to the farmers. If this supply is saturated, farmers of unused land will

also be trained to cultivate bamboo. Once we have reached full capacity of the first processing plant the

next step will be to establish a second processing plant in another region of Guatemala which has a high

number of existing plantations. The corporate culture of P&T is one of relationship building and closed-

loop production. By initially focusing on quality over quantity and providing new opportunities to the

farmers, P&T is taking a grass roots approach to building the business.

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5. Realisation schedule The first step of the business plan begins in September 2012 and starts with the receiving of seed

funding that will be used to work out a Business Plan to prepare the venture capital application. The VC

funding will be used to build up the technologies needed to manufacture organic fibres derived from

bamboo. Then, from 2013 to 2014, the company will begin the approval concept phase with our key

partners it has established. At the same time, it will improve marketing strategies and set up contacts,

especially with manufacturers, to be able to receive additional funding and validate its technology.

Then, P&T can establish long-term contracts with its partners and clients. In 2015, the local expansion

phase will start, that is to say, the tackling of the Guatemalan market. At this stage of development, the

company can position itself on a private carbon market. Finally, in 2016, P&T will have enough funds to

create a real buffer zone around the rainforest by planting bamboo on new land. The figure underneath

demonstrates this realisation schedule. The dots represent milestones that have to be reached in order

to go on to the next phase represented by bars.

2012 2013 2014 2015 2016 2017

Seed funding

BP & technology set-up

VC funding

Key partnerships

Proof the concept

Marketing

Looking for Customers & Partners

Additional funding

Technology validation

Biocustomers contracts

Local expansion

Carbon market

Investment, new plantation & training farmers

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6. Risks Identifying risks:

The identified risks are those the company yields internally and those that are due to the environment

the company operates in.

The most important environment risk is the mimicry of the business model. Once P&T is on the market,

it will have to tighten established relationships with its partners. Consequently, another risk lies in

particularly this relationship. The company has to make sure, that farmers and producers stay with the

company and do not start working with competitors. Another environment risk is supply and demand

mismatch that can be due to poor weather conditions (that result in land sliding for example) as well as

legal issues with governments for example.

The most important company risks lie in the rather high investment costs and the reduced liquidity due

to the investments in the start up phase. This may result in shortcomings when facing unpredictable

problems. Moreover, the company will be dependent on an external staff who includes another start up

risk.

Risk mitigation:

In order to be able to cope with the risks aforementioned, some strategies have to be well worked out:

the marketing strategy will foster customer relationships to keep them to work with P&T. The supply

and demand mismatch will be prevented from happening by a bamboo stock that serves as buffer and

by carrying out a detailed market survey. For the company risks, it will be important to create an

enterprise that is able to work with other plants, products and strategies in order to cope with

competitors and market fluctuations. Liquidity problems can be addressed by including government

grants.

Sensitivity analysis:

Provided that only the most probable of the risks actually occur defines the best case scenario. That is

to say farmers would lose interest in working with P&T. In this case, the company will break even at the

end of year four, using a venture capital of 1 million Euros.

The worst case scenario would include all the risks mentioned, plus an uncertain number of unknown

and unpredictable factors. Here, the company will break even in year seven.

The base case scenario would lie in between and is defined by the three most probable risks: work with

the farmers and producers, supply and demand mismatch and liquidity. In this case, the company will

break even between year 4 and 5.

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7. Finance

The financial calculations are based on the goal to produce 500 tons of bamboo viscose fiber per month (6000

Ton/Year) and introduce it to the local market which consists of yarn and fabric producers. To be able to produce

500 tons of bamboo viscose, it will be necessary to invest into a processing plant in order to be able to implement

Lyocell2 green technologies. Moreover, the production will need 800 tons of bamboo poles, which can be provided

by 15 farmers gathering 400 ha of bamboo plantations. These 400 ha of bamboo sequestrate 24,800 tons of CO2

per year, generating up to 173,600.00€ in carbon credits. Besides, P&T is willing to allocate in the CO2 market the

sequestration made by plantations and will charge 10% of this revenue for the services to coordinate the inventory

and transaction of CO2.

For the first year, it is needed to start-up the processing plant which will require the allocation of investments from

particulars, local industry and government programs. Besides, it requires the assistance for existent plantations in

order to guarantee the provision of good quality bamboo raw materials. As the production must start at the

beginning of the second year, there is a need to allocate working capital resources (mininum for 3 months,

aproximately of €576,000.00) . The labour and operational expenses are based on the local labour market and

the cost of other materials and energy; besides the data have been compared with operational costs of other

manufacturers performing similar activities in Asia.

Finally, the calculations suggest gross annual revenues of €4,432,320.00, based on a market price for Bamboo

Viscose products of € 704-800/tons (FOB) (Refer to Table 1). The break-even is expeceted between year 4 and 5.

P&T will develop a strong network of investors, industrials, communities and government in order to make the

project feasible. Similar projects proved to work well and that is the basis to suggest the success of the project.

Besides, the decree 29-89 of Guatemalan “Law of promotion and development of export activities and drawback”

establishes that every new industry with environmental, technological and social benefit orientations benefit from

the exempt of taxing obligations for a period of 10 years.

2Lyocell is a manmade fiber derived from cellulose, better known in the United States under the brand name Tencel. Though it is related to rayon, another cellulosic fabric, lyocell is created by a solvent spinning technique, and the cellulose undergoes no significant chemical change. It is an extremely strong fabric with industrial uses such as in automotive filters, ropes, abrasive materials, bandages and protective suiting material. It is primarily found in the garment industry, particularly in women's clothing.

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Table 1: Profit and loss estimation

Pro Forma Profit & Loss Statementin € Year 0 Year 1 Year 2 Year 3 Year 4 Year 5RevenueSales -€ -€ 2,216,160.00€ 4,432,320.00€ 5,097,168.00€ 5,097,168.00€ Misc. income 20,000.00€ -€ -€ -€ 17,360.00€ 17,360.00€ Total income 20,000.00€ -€ 2,216,160.00€ 4,432,320.00€ 5,114,528.00€ 5,114,528.00€

ExpensesSet up of processing plant -€ 1,200,000.00€ -€ -€ -€ -€ Raw materials requirement from 15 farms -€ -€ 1,536,000.00€ 1,689,600.00€ 1,943,040.00€ 1,943,040.00€ Labour charges -€ 40,000.00€ 192,000.00€ 192,000.00€ 192,000.00€ 192,000.00€ Energy and manteinance -€ -€ 336,000.00€ 336,000.00€ 336,000.00€ 336,000.00€ Other expenses -€ 20,000.00€ 240,000.00€ 240,000.00€ 240,000.00€ 240,000.00€ Total year expenditure -€ 1,260,000.00€ 2,304,000.00€ 2,457,600.00€ 2,711,040.00€ 2,711,040.00€

Gross Profit (GP) 20,000.00€ (1,260,000.00)€ (87,840.00)€ 1,974,720.00€ 2,403,488.00€ 2,403,488.00€

Net ProfitCapital Payback -€ -€ 444,000.00€ 444,000.00€ 444,000.00€ 444,000.00€ Interest (mainly for loans) -€ -€ 84,000.00€ 52,920.00€ 21,840.00€ -€ Profit before taxation -€ -€ (615,840.00)€ 1,477,800.00€ 1,937,648.00€ 1,959,488.00€ Taxation 12% ( No IRS for 10 years) 2,400.00€ -€ 265,939.20€ 531,878.40€ 613,743.36€ 613,743.36€ Profit after interest and taxation (2,400.00)€ -€ (881,779.20)€ 945,921.60€ 1,323,904.64€ 1,345,744.64€ Dividends -€ -€ -€ 283,776.48€ 397,171.39€ 403,723.39€ Retained Profit (2,400.00)€ -€ (881,779.20)€ 662,145.12€ 926,733.25€ 942,021.25€

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8. Climate Impact

a. Global climate impact of the business

Impact of Bamboo plantation:

Bamboo has an important role to play in reducing pressure on forestry resources. Although

bamboo is a woody grass and not a tree, bamboo forests have comparable features and functions to

other types of forests regarding their function in the carbon cycle. Many scientific studies suggest

that extensively managed bamboo forest ecosystems have a carbon stock (soil biomass and above

ground biomass) of about 288.5 t C/ha. Bamboos have rapid growth rates, high annual re-growth

after harvesting and high biomass production. Bamboo culms of most species reach maturity after

approximately 4-7 years, after which they deteriorate rapidly, releasing carbon from the above-

ground biomass back into the atmosphere (Liese, 2009). In order for the bamboo system to continue

to be a net sink, carbon has to be stored in other forms, so that the total accumulation of carbon in a

solid state exceeds the carbon released to the atmosphere. Bamboo must be harvested within its

maturity cycle in order to guarantee a constant sequestration of CO2.

As a start, Plant&Trade is willing to use 400 Ha of Bamboo plantations, which will sequestrate

24,800 Ton of CO2 in a year (62t/Ha/year). The culms will be harvested every 3 or 4 years. As the

production is for fibres, the CO2 uptake will be long stored. Plant&Trade plans to extend its

production by developing new plantations which will stock further amounts of carbon.

Similar to other forestry projects, Bamboo has the quality to improve soil quality, prevent soil

erosion and regulate run-off consequently increasing the infiltration to the groundwater layers.

Furthermore, Bamboo stores water in the culms during the rainy season and then releasing the

water in the soil during the dry season.

Conservation of the biodiversity will be increased within the plantation by providing different

varieties of Bamboo plants. Plant&Trade has the will to improve the ecosystem services and

amenities by the plantation of native plants and flowering native plants.

Impact of Bamboo processing:

The Lyocell process that Plant&Trade used is the most environmentally-friendly manner to

process bamboo fibre. During production, 99.5% of the chemicals are captured in a closed-loop

container and are recyclable. Minimal amounts of the chemicals are released to the atmosphere,

waste water and products. And very low residual emissions are broken down into purification

plants adapted.

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b. Global social impact of the business

Short-term social impact:

With the implementation of P&T in Guatemala, farmers will enjoy a right to education. One

of the key points of our company is to share knowledge. Also, farmers will receive a free expertise to

improve the production of bamboo in a sustainable manner. All support materials needed for the

field work will be provided by P&T as an aid to management through new technologies such as

satellite tools or weather forecast.

Regarding the Lyocell processing, P&T decided to use the N- methylmorpholine-N-oxide

chemical which is well-known to be non-toxic and safer for humans compared to those used in the

chemical process (viscose).

Long-term social impact:

The final goal of P&T is to create a buffer zone around the rainforest by establishing new

plantations. Most of indigenous people are aware of the importance of the ecosystem services of the

rainforest but people get their revenue from the rainforest because they do not have any

alternatives. By creating bamboo plantations, people will be able to get revenue and then a

sustainable life. P&T will engage the farmers in the carbon trading scheme, which will give them an

other source of revenue, on top of their production.

Furthermore, P&T undertakes to repay a part of the revenues to support projects related to

protect the rainforest. On the basis that P&T is committed with the protection of natural

environments and the empowerment of local communities, P&T will support awareness campaigns

in order to create conscience on people and aware them on the benefits to take bamboo as an

alternative in order to reduce the pressure on natural forests.

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References

Carp, B. (2011, July). Sales of natural fibres for use in composites set to double by 2015. Intelligence Textiles , p. 2.

Congreso de la República de Guatemala. (1989). Decree 29-80 Law of promotion and development of export activities and drawback. Guatemala: Diario de Centroamérica.

FAO. (2010). Global Forest Resources Assesment. Rome: FAO Fiat Panis.

ICTSD. (2010). El sector textil y confección y el desarrollo sostenible en Guatemala.

Swiss Confederation: Federal Department of Economic Affairs.

IPCC. (2007). Intergovernmental panel on Climate Change. Retrieved September 4, 2012, from http://www.ipcc.ch/publications_and_data/ar4/wg3/en/ch9s9-6-1.html

Stetson, R. (2012). Market Reports/Tariffs, Textiles Guatemala. USA: Office of textiles an apparel.

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