Investor Presentaiton
GBM
October 12, 2021
MARKET DYNAMICS: KEY PLAYERS AND FIGURES
Teak supply is restricted to approx. 6.9 million hectares
(19% of the world's total). There is an estimated 36 million
hectares (ha.) of teak across the globe. Teak from natural
forests (81%) faces either logging (cutting down) bans from
local governments to counter deforestation or, in the case
of Myanmar, embargos from the United States and other
developed nations. The balance was estimated at a range
of 4.3-6.9 million ha., according to the ACIAR 2015 Study.
Experts have pointed that mom & pop plantations are hard
to quantify and question some west African plantations
replant the hectares they harvest, which make us take the
6.9 million ha. as an updated figure.
Relative quality of teak plantations: clonal seeds as an
edge. Naturally sourced teak, especially Myanmar's, was
highly esteemed in the market due to its long-standing track
record. Teak farms need to establish a name for themselves
while managing the trade-off between letting trees grow for
more years and the time value of money. The use of clonal
seeds has emerged as a solution. Clonal seeds are genetically
selected (not modified) and yield trees that grow faster, taller,
thicker, and straighter, thus, commanding higher prices.
Global Teak Supply by Origin
-figures in million hectares (ha)
* Source: ACIAR 2015 Study
** 1 ha. = 10,000 sq. mt.
Share of Plantation Teak by Region
Plantation, 6.9
4%
8%
Natural Forests, 29
30%
Source: ACIAR 2015 Study
21%
37%
India
Indonesia
Asia, others
Africa
LatAm
Ethically sourced teak and the need for certification.
Teak is part of the wood furniture value chain, whose end
market tends to be developed markets. These end markets'
regulations and overall awareness regarding the importance
of buying sustainably sourced wood have led to the rise of
third-party certifications. Only a small fraction of the total
6.9 million ha. of teak available is certified, which provides
an edge to companies like Proteak.
Cork
Cork cambium
Living phloem
Vascular cambium
Sapwood
Heartwood
TEAK: AFTER ALL, MONEY DOES GROW ON TREES. | 10View entire presentation