Yes you can invest in bamboo through UK registered trustees and bamboo bonds.
Why invest in bamboo?
Bamboo has been used as a building material for thousands of years. It is strong, versatile and is one of the fastest growing plants on the planet. This makes bamboo an excellent sustainable crop and a truly viable alternative to trees and other plants as the raw material for a number of products.
Bamboo can be harvested for timber, pulp and bio-mass within 3 to 5 years (although shoots can be harvested for food within the year), and annual harvests continue for around 15 years. Bamboo cultivation has a low ecological impact and yields can be up to 25 times higher than with trees.
Bamboo produces 20 times more timber per hectare than any other timber.
With the information above you may be wondering why bamboo isn’t used as an alternative to conventional timber. Well, increasingly it is. Its high yields, strength and versatility make it a perfect crop and returns on bamboo investments can be attractive. Rapid growth means annual harvests, which in turn means annual returns for investors. So with multiple income streams from food, construction and bio-mass, on local and global markets, bamboo investments are worth looking into for good economic reasons as well as being of interest to the ethical investor.
Bamboo is one of the fastest growing land-based plants in the world. It can be commercially harvested for pulp, biomass and timber from 3 to 5 years of age.
As well as having the potential of being of great environmental benefit, bamboo may also be of great social benefit. Modern supply chain thinking dictates that value adding should be carried out near the source of the raw material, improving rural economies. This has been illustrated in China during the 1990s. Innovation was required in response to dwindling timber resources. Previously bamboo processing factories would deal with whole culms and were swamped with waste and residue. By processing the bamboo into separate sections, with simple machinery, near the source and directing them into different supply chains, efficiency was improved across the industry and, maybe more importantly, the rural, near-source economies benefitted greatly.
People invest in bamboo for the following reasons
- A fantastic return on your investment that is SIPP qualified and bonds are managed from within UK based trusts;
- When you invest in bamboo you really do own something tangible;
- Full legal title to the bamboo trees;
- Multiple exit markets, sprouts for food and main poles for construction, pulp, textiles;
- Sustainable investment and environmentally ethical;
- Bamboo is one of the fastest growing, sustainable and versatile plants on earth.
- Removes over 500 tonnes of C02 per hectare of bamboo every 15 years;
- As illegal deforestation becomes harder to complete timber prices will continue to rise. Bamboo helps slow down deforestation rates.
- No need for pesticides and fertilizers during the growing process. If you have ever lived with bamboo you will know how fast growing and resilient it is.
- Grown in Central and South America in countries like Nicaragua, Panama and Brazil where climate conditions are perfect, rivers are available for transport to major ports and the workforce is skilled at its production.
Bamboo the new timber
The emergence of bamboo as a useful alternative to wood coincides with heightened demand for timber; considering everything else, the future for the bamboo market looks very positive. The global bamboo market is vibrant and well-established. The last 15-20 years have seen explosive growth as new commercial applications for bamboo have become established. Products such as flooring, laminated furniture, building panels and high quality yarn and fabrics (to name but a few) are increasingly fabricated from bamboo. Bamboo fibre actually makes incredibly soft baby blankets.
How investing in bamboo works
"The world market for bamboo is currently valued at US$10 billion, and is set to reach around US$20 billion by 2015" – Ministry of Agriculture, India
Bamboo is a native plant of Asia and typically bamboo investments will be in the Asian bamboo agro-forestry sector. A typical investment will start from around £4,000 per 25 clumps. A bamboo clump is the name for the clump of young shoots that is planted at the beginning of its life cycle. Unlike trees, bamboo has the potential to reach its full height and girth within one growing season. Growth during this first season is vertical with no side shoots whatsoever. It is in subsequent seasons that bamboo culms (the stem) generate branches from the nodes.
Having invested in your clumps and completed all of the relevant paperwork (remember, you should be accorded a cooling off period after your initial agreement) your bamboo investment will be managed by a plantation management company with whom you will have a contract.
- Bamboo shoots will be harvested after the second year which is when you should start receiving annual returns on your investment;
- The bamboo culms are left to mature until around the fourth year when they are harvested and sold to industry for timber or bio-mass. It is now that returns should start to improve dramatically;
- Your bamboo clumps will continue to be productive for around 15 years and ideally this will be the fixed term of your investment;
- Shoots are sold for a low price. Your 25 clumps will generate around £10 in shoots per clump per year. However from year four when the poles are first harvested up until year 15 and the end of the fixed term your 25 clumps should produce around 4,000 poles, with your bamboo investment generating revenue of around £14,000.
Regular harvesting is necessary and a health benefit to the bamboo. Studies have shown that harvesting the bamboo poles leads to vigorous re-growth and an increase in the amount of biomass the next year. It is the investment that keeps giving.
There are a number of companies out there that offer bamboo investments and you should aim for one that is held by UK based trustees. These are essentially bonds you are buying and are SIPP approved with fixed incomes that often increase year on year as the plant grows. Total returns on bamboo bonds can be up to 500%, but as always, do your research and read the fine print. It is always a good idea to seek professional independent advice before making an investment.
- Forestry investment
- Ethical forestry investment
- Global forestry investments
- Renewable energy investment
- Teak investment
- Timber investment
Investment in bamboo is very popular but it is not known as a green investment; these include, trading in emissions, carbon, solar and renewable energies.