Problems Create Opportunity

by | Dec 23, 2001 | Archives

Business is solving problems. When you see something wrong don't run. Look at how to profit from it instead. Take the problem of rainforest destruction as an example.

Dear International Friend,

We have shared numerous messages about the potential of investing in wood, water and clean air.

Plus we have shared ideas on how to turn misfortune intoopportunity. Now these two forces come together in Ecuador becauseof recent Ecuador legislation that limits rain forest harvesting,Harvesting timber in Ecuador has always been a profitable business forthose few who have the capital to do it with the proper equipment and whowere not concerned with environmental issues. On average, a mature tree canbe purchased from a land owner for $28 (or poached at no cost) and soldwithin Ecuador for up to $ 1,100.

This enormous profit potential has been one of our environmental problems.New Governmental provisions, however limits such harvesting, allowing only”Big Trees” * to be cut over a two year period in any one area and then nomore harvesting in that area for 15 years. The result will be a specific,regulated, enforced program to achieve “sustainable harvesting” in Ecuadorfor the first time.

This creates a new business opportunity for those who have the necessarycapital. Pursuant to the new regulations, it is now possible to takeadvantage of the inherent profitability in the timber harvesting business,in an environmentally positive way.

The new governmental regulations are expected to also result in a declinein lumber supply, hence an increase in lumber prices for theenvironmentally friendly harvester.

There are normally only6-7 “harvestable” big trees per hectare. (2.47 acres)

One of the businesses Merri and I are looking at is a timbering Partnershipthat aims to achieve positive environmental results in three ways. First,it will participate in the government program for sustainable harvesting byremoving only Big Trees (which are also old trees, whose future life spanis limited), thereby making room for smaller trees to grow more easily.Next, through the taxes it pays to the government on trees cut and theoutright monetary grants it makes, the Partnership will enable thegovernment to increase the resources used to enforce the new regulations,thereby reducing illegal cutting. Lastly, the Partnership will set aside 5%of its revenue, to be contributed to the Ecuador Forest PreservationFoundation and used to purchase and protect forest in the Oriente area ofEcuador.

This partnership was started by two of my friends Kjetil Haugan (Norwegian)kjetil@accessinter.netand Robert Montgomery (USA) and they are now looking for other partners tojoin them. They have written an executive summary explaining thepartnership which projects a return of $88,400 on an investment of$25,000. You can view the entire summary by emailing them.

Kjetil and Robert will speak at our upcoming course in Quito January 25through 27 and we are arranging a follow-up tour to the area currentlybeing harvested after the course. I hope to see you there!