Friday, 1 February 2013

Paulownia Tree farming Business

Paulownia tree farming business
Paulownia Plantation
1.The location
The investment is located in Bulgaria in the city of Ruse. The country 
is a EU member since 2007. Ruse is a key commercial port on the Danube river and allows easy and cheap transport of goods by boat to the heart of Europe.
2.The land.
Most Forestry Investments work on a structure Land Lease contract,
however this Paulownia Investment is one of the few in the business that sell the land itself as FREEHOLD. This gives more security to the Investor with the benefit of potential land value increases being considered for asset appreciation
3.The trees.
The trees planted are Paulownia Tomentosa. They grow very well in the
Bulgarian climate. The plantation management company work with forecast data - expected growth, speed of growth and volume of harvested timber from a tree. The Paulownia tree species was imported into Bulgaria about 20 years ago. Similar trees planted 10 - 15 years ago are really huge. A tree like that has more than 2.5 - 3 cubic meters of timber and they have been planted as decorative trees. The forecasts are to get 1 cubic meter raw timber from a tree. Past performance from a similar Paulownia plantation (8 years of age) harvest exceeded 1 cubic meter per tree.
4.The timber and its applications
Paulownia timber
*It is a hard wood - like oak and walnut. It is ideal for furniture
*It has better insulation qualities than any other wood and it does not
rot. That makes it ideal for wooden house manufacturers and parquet floor manufacturers.
*It grows tall and straight and is ideal for straight beams for building
*because of the size of its leaves the tree produces several times more oxygen than most plants and absorbs more carbon-dioxide.
5.Planting and growing the plantation
Tree planting takes place in early spring before the leaves come out. By
the end of the first year most of the trees reach 2.5 - 3 meters high. But what is most important is the roots to go as deep as possible. The deeper the roots get - the faster the tree grows.
Pruning trees from the bottom in the beginning of the second year and by the end of it they are nearly as high again as the rest that have not been cut. And it is because the roots are as deep as the rest. The first year is extremely important to water the plants everyday - in summer twice a day!
Pruning is very important to get high and straight trees. From the 
fourth year the trees need only to get thicker.
6.Security of plantations
Surrounding the plantations with fences and provide a land guard. The 
ground between the trees is regularly cleared from grass to prevent fire
7.Company registration
There are two lawyers that deal with the company registrations and 
prepare all necessary paperwork.
*Registration in Bulgaria: The lawyer fills in all necessary application papers for the company registration. As these forms go directly into 
the Bulgarian company registrar they need to be completed in Bulgarian. 
A translator translates them all to the client before he signs them. Then they are deposited with the registrar. A bank account is opened forthe new company and all payments the client needs to complete will go 
through it.
*Registration when the client does not come to Bulgaria: The lawyer
fills in all necessary application papers for the company registration. All forms are emailed to the client and he has to print them out and go to the nearest Bulgarian embassy in the investors Country of Residence and sign them there. All expenses at the embassy are chargeable to the investor.
Then the investor sends the forms to the Plantation Management team by
mail. Once the forms arrive the Bulgarian lawyers they are deposited with the registrar and the company account is opened. In this case there are additional Power of attorneys to let the management company represent the investor before the registrar and deposit the papers on the investors behalf and register the company bank account.
8.Land title
Once the company is registered and the money is paid the land title is
transferred to the investors new company. This is done with a local Notary. The title deed is written by the notary and both the seller and the buyer need to sign it in front of the notary. The notary signs it as well and then he deposits it in court where the title is transferred to the buyer. It takes from 2 days to 2 weeks sometimes. If the client (as the owner of the company) cannot be present he can be represented using power of attorney to buy his land on his behalf and transfer the title to the newly formed company.
9.Payment options
Option 1 - The whole amount is paid by the client when he signs the
contracts and the papers for the company. When paying in this way the seller will allow a discretionary discount on investment. Details available by request.
Option 2 - With deposit and installments - 30 % deposit is paid at 
signing the contract. The rest is divided into 35 equal monthly 
installments due the 1st of every month. The legal transfer of the titlewill be done after the last installment is paid! Many investors prefer 
this option because they do not pay all the money at once. The investor
can sign the contract and get things started without visiting Bulgaria at the start, Investors can plan their visit to a time that suites them best and see their plantation already planted and grown.
Option 3 - Only with installments - as option 2 but without the 30%
deposit. The seller does not offer this option all the time! It is 
available only from June to December for plots that will be planted nextyear March - April! This allows the clients account to accumulate at 
least part of the money necessary for planting!
10.Power of attorney
Two types of power of attorney:
*necessary for bank accounts
*necessary for registering the company and transferring the land title

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