Presentation on theme: "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."— Presentation transcript:
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.
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE What is the Project? A unique initiative designed to: –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
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Project Overview –Customers purchase a guaranteed number of Teak trees at final harvest –PMG plants, maintains, and harvests trees on customers behalf –Customer receives harvest proceeds…project expansion achieved… everyone benefits, including the environment Project expansion achieved through sale of Teak Trees Project objectives –Reduce deforestation of tropical rainforests by developing Teak tree plantations to satisfy growing global market demand for teak wood –End destructive environmental impact of historical practices: Reduce need for harsh, destructive stripping of indigenous trees Establish Teak Tree plantations on land previously cut and slashed for cattle grazing to restore/contribute to the rich, lush tropical canopy Reduce or reverse the environmental impact of the callous destruction of tropical rainforests
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Project Methodology – End Cut and slash PMG acquires previously Cut and Slashed cattle pastures in the pristine rainforests of beautiful Costa Rica
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Project Methodology - Planting Choice Teak Seedlings are cultivated, selected and planted at the optimal planting time (spring-summer)
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Project Methodology – Growth Cycle PMGs expert team of Foresters ensures perfect care and maintenance over the 15 year growth cycle After 4 Years After 1 YearAfter 4 Years
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Project Methodology - Management PMG manages all aspects of Project through final harvest and ultimate sale of customers timber to Teak wholesalers
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE What you are buying 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 customers 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 customers behalf at best available wholesale prices (or deliver to the customer at customers request) The Purchase Price is the only out of pocket cost to customers… a 6% fee is also deducted from customers 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.
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Tree Pricing 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) ,7501,2005 Parcels 42,000 12,500 5,000 $2,500 Purchase Price Full Parcel No. of Trees 2081/4 Parcel 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
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Securing Your Purchase Purchases secured by Timber Deed Back GPS Coordinates Front Documentation Includes: –Number of trees purchased / guaranteed at final harvest –Assignment to customer of complete and unencumbered ownership of trees purchased –Location of trees (via GPS coordinates)
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Valuing Your Purchase Value per Parcel One Parcel (240 trees) of Teak Trees will yield approximately 215 Cubic Meters of commercial wood at final harvest A conservative average plantation teak wholesale price estimate per cubic meter is (~424 board feet) is $1,060.00, or $2.50 per board foot Therefore…the approximate harvest value of a full Teak Parcel is $228,000 at TODAYS wholesale prices: ($1,060 x 215 ~ $228,000) Notes (1)Source International Tropical Timber Organization (www.itto.or.jp)www.itto.or.jp (2)Price refers to plantation sawn wood, and includes small sizes ITTO (1) reported teak log prices as of October, 2005
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Return Example: Full Parcel of New Seedlings Return Example: Full Parcel of New Seedlings Asset Value / Returns When you buy one of our Teak Parcels… you are actually paying only a fraction of the assets value at maturity based upon TODAYs wholesale prices! $228,000 Current harvest / wholesale value of a full Parcel (240 trees) (42,000) Purchase Price Growth appreciation at todays prices (Growth Value) $186, % Total Return Multiple of cost 5 Xs $355,000 FUTURE harvest / wholesale value w/ conservative price increase (3.0%) (42,000) Todays Purchase Price Growth appreciation $313, % Total Return Multiple of cost 8 Xs This means the value of your initial tree purchase will increase 5 times faster than its cost simply by growing… we call this Growth Value When historical inflation trends are added to Growth Value … the return on your Teak purchase soars to over 700% - or 8 times over your purchase price
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Teak Price Trends The wholesale price of Teak has increased an average of over 5.5% per year since 1972 Chart Notes (1) Source International Tropical Timber Organization (www.itto.or.jp), FAO (www.fao.org), and PMG analysiswww.fao.org (2) Drop in deforested teak price is related to political situation in Myanmar and international laws against deforestation (3) Plantation prices have increased steadily in the last five years and projected long term annual growth is 5.5% to 7% (1) Natural Deforested Teak Plantation Teak FAO ITTO (2) (3)
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Teak Investment Returns If historical price trends continue…the value of your Pacific Teak purchase will far exceed the appreciation of conventional investments Assuming a conservative 3% annual teak timber price increase, the investment in one parcel of Pacific Teak is projected produce an average annual return of 14.8% Notes: 1. Current teak timber price ($/M3)1, Average annual timber price growth 3% 3. Processing and management fees 6% Investment projection
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Teak vs. Conventional Investments When you compare anticipated appreciation in value to conventional investment alternatives…Teak blows away the competition Pacific Teak 14.8% Compounded annual return – Last 32 years 8,374% Over 83 Times Purchase Price and if history repeats… 8 Times better than the US Stock Market 7.4% 8.0% 3.1% 5.0% 6.1% 8.8% Total Return % after 32 yrs 1,628% 476% 1,255% 1,040% 4,000% 6,000% 8,000%10,000% U. K. Real Estate Gold U. S. T~Bills Bonds Nikkei (Japan) FTSE (U.K.) U.S. Stock Market (DJ) 702% 270% 2,000%
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Driving Force How are these returns possible? Ever-increasing demand Limited supply
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Teak Supply Teak supplies are limited by three factors: 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 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 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
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Teak Demand Demand for Teak has never been higher due to its strength, hardness and durability Teak woods high oil content provides natural resistance to insects, fungus, fire, water, and acids Teak is an essential timber in ship/yacht building, joinery, flooring, carving, cabinetwork, paneling, turnery, tanks/vats and fixtures Demand and new applications for Teak are ever increasing, supplies are not… This dynamic assures ever-increasing prices for Teakwood!
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Risk Assessment With such high returns…what are the risks? Possible risks: –Agricultural –Physical and environmental –Governmental…Costa Rica?? –Management –Time…what of future markets? At Pacific Teak we do our best to mitigate risks to ensure your asset is safe and secure
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Agricultural Risks –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
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Physical / Environmental Risks –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 –Unforeseen destruction / catastrophe??
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Governmental Risk 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.
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Management Risk 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 assets 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
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Management Risk Bios of Board members available upon request PMG Management Board Ron Fleming Chairman of the Board Lewis Waugh Non Executive Director Corporate finance planning Fernando Gutierrez, Esq. PMG President and CEO John Schau, Esq. General Counsel, Attorney at Law Todd Dockum Non Executive Director Corporate audit / asset preservation Giuseppe Uslenghi Non Executive Director Strategy / Business development
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Management Risk –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 customers Timber Deed. He also verifies and holds Timber Deeds issued under PMGs Life Cycle Protection Guarantee PMG is highly committed and motivated to perform … as PMGs contractual obligations are met, Trees held in Trust revert back to PMG
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Time…Market Risk 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 Ricas established plantations
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Time / Market Risk Your purchase price provides leverage of 5 to 1 (current harvest value vs. cost) providing outstanding risk protection w/ normal inflation $228,000 w/ Zero inflation ZERO! $228,000 ($114,000) $114, % 2 Xs …Our program would still deliver a substantial return even with a 50% market drop For example…What would happen in the highly unlikely event that the future value of Teak (relative to other goods and services) declines by 50%?... –Todays wholesale yield value of one parcel –Apply inflation rate (same as last 15 years) –Future wholesale value $228, % $355,000 –Less: 50% drop in market value Harvest proceeds Total return (vs. $42,000 cost) Multiple of cost ($177,500) $177, % 4 Xs How price leverage hedges against time/market risk:
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Getting Started PMG has assembled a highest specialized team of experts and programs to provide a highly unique opportunity So if your financial goals include: –Highly lucrative, long-term investment programs –The security of fully guaranteed asset ownership AND… –The opportunity to help protect the worlds rainforests Get involved with this exciting initiative. Contact Pacific Teak today…or visit our website at
AHEADLASTFIRSTBACK SLIDE NAVIGATION END SHOW CLICK TO ADVANCE Summary Slide Table of Contents: Click on any link to return to a slide What is the Project? Project Methodology What you are buying Tree Pricing Securing Your Purchase Valuing Your Purchase Asset Value / Returns Teak Price Trends Teak Investment Returns Teak vs. Conventional Investments Driving Force Teak Supply Teak Demand Risk Assessment Management Risk Time…Market Risk Getting Started