Teak rising from tainted reputation of the 80s and 90s as investment fund-driven teak projects emerge in Central Latin America; industry consultant asks, could it become new hardwood of choice?

ROTORUA, New Zealand , August 19, 2011 (press release) – The tropical hardwood species of teak has been used commercially for more than 1,000 years in countries like Thailand but has only recently been recognised as a mainstream commercial species.

Teak grows naturally in few tropical countries including Myanmar and India, with a little in Thailand. Myanmar and India are the source of (still) very large, very high quality natural teak logs. Teak has also been grown in plantations in India and Indonesia for more than 100 years.

Teak has been grown in several West African countries for decades, the result of British and French colonial foresters, and British government sponsored projects. It has more recently been planted in East Africa, but mostly in Central-Latin America.

Some dodgy retail investment projects in India and Central America tainted the species in the 1980s and 1990s, and some of this still carries over today, However, there are now a number of bona fide investment fund- driven projects, including a number in Brazil (the largest at 100,000 ac), Mexico (one with a 50,000 ac target), Guatemala, Costa Rica and Panama. Ecuador also has a plantation resource.

Teak has some very favorable properties including being very wind, insect and fungal resistant, and producing an attractive wood very resistant to rotting. It is however, sensitive to good sites with periods of dry weather to set the maximum heartwood which is the key to value.

There are only a few main "primary" teak processing countries including India, Vietnam, Indonesia and China, although export markets for outdoor and indoor teak furniture exist in all continents.

The secret for successful institutional teak investment is to choose a manager who understands soils, climate, silviculture and, importantly market nuances, including a range of mysterious log measurement systems designed to maximize buyer benefits.

Teak will not totally replace the large volume native hardwood log market, but is likely to form an important part replacement into the future.

For more information on this and other timberland topics, contact jan@dana.co.nz.

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