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| Sunday, 26 May 2002 |
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Business |  |
| News Business Features Editorial
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Smart
investment plan for a greener world
Smart Wood Cash-Flow (Private) Limited, a private limited company engaged in planting and cultivating Mahogany forestry, started operations recently. The company will initially use a 25-acre portion of one hundred acres land called Maharaja Estate at Madawala Ulpatha in Matale District and hopes to expand this project. According to company officials, soil tests done by the crop science section of the University of Peradeniya had found that the land is suitable for Mahogany cultivation. Density will be 8000 to 10,000 trees of which 80 per cent will be sold and the balance 20 per cent will be reserved for replacements as and when necessary. The company will be responsible for the maintenance and management of the plantations which include fertilising, weeding, pruning of the plantation from planting to harvest at maturity which is 18 years. The company will invite the public to invest in this project. To educate the public in this connection, a convention is planned to be held shortly at the BMICH, Colombo. The Minister of Environmental and National Resources and the Minister of Mass Media are expected for the convention. "This is an ideal investment plan for people's needs such as children's higher studies and marriage. The company will sell Mahogany saplings at Rs. 10,000 each to the investors and an additional sum of Rs. 1500 per tree will be levied as charges for land preparation and planting. We will charge Rs. 250 per tree per year as maintenance fees during the growth cycle and the balance at maturity," a news release from the company said. Smart Wood will replace free of cost damaged, withered or dead trees from the additional plantation maintained by the company in the same land. On maturity, investors are free to sell the trees either to the company or to a third party after paying the maintenance. After paying the maintenance charges to the company for the concerned period, even before trees become mature, investors are free to uproot, sell or remove the trees without damaging the rest of the plantation. The company proposes to deposit all capital investments with leading banks and request to issue a bank guarantee in favour of the prospective investors against cash collateral. If the investor withdraws the bank guarantee, they will cease all their rights and claim for Mahogany trees and the Certificate of Investment will be cancelled and the company will become the owner of the trees. The investors are free to sell their trees after one year to a third party for any amount. Studies have shown that the demand and price for Mahogany had been on the increase by several folds in the recent past and it is predicted that this trend will not change in the foreseeable future. Mahogany trees can be grown only in some parts of the world including Sri Lanka and is valued for its texture which is not found in any other timber. Mahogany wood is classified under 'Luxury Class 1' in the timber classification in Sri Lanka and is known for its decorative qualities, colour, lustre and capacity for taking high polish and high workability. Mahogany also has special mechanical characteristics, which includes relative hardness, slight shrinking and resistance to beetle attacks. "Modern technique and local and international expertise will be utilised to ensure a high survival rate, better growth and quality Mahogany trees. We also propose to insure the plantation with a leading company," M. Munawwar Haniffa, a Director of the company said. |
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