2012 SOUTHERN FOREST ECONOMICS
WORKSHOP
TIMOS INVESTMENTS IN BRAZIL:
CURRENT STATUS AND PROSPECTS FOR THE
FUTURE
Bruno Kanieski da Silva
Master student at University of Sao Paulo / Brazil
Silvana Nobre
Owner of Atrium Forest Consulting / Brazil
Luiz C. E. Rodriguez
Professor at University of Sao Paulo / Brazil
John C. Welker
Senior Vice President/Director of Technical and Data Services at American Forest Management
/ USA
Christopher N. Singleton
Appraiser at American Forest Management / USA
Outline
1. Brazil
i. Climate and vegetation
ii.Social and economic aspects
2. Timber productions
3. Timberland investment management
organizations (TIMOs)
4. Future perspectives
1. BRAZIL
nde
26 states
8,514,876 km²
i. Climate and vegetation
i. Climate and vegetation
ii. Social and economic aspects
Population 2010: 190,755,799 habitants
Habitants (millions)
2000/2010: 12%
Time (years)
ii. Social and economic aspects
GROSS DOMESTIC PRODUCTION 2011: 4.1 trillions
Reais (trillions)
2010-2011= 7.5 %
Time (years)
ii. Social and economic aspects
2. TIMBER PRODUCTION
Timber Production¹
Eucalypts
Pine
41
37
30
25
22
22
18
18
18
15
South Africa
Australia
Indonesia
Brazil
US South
Cubic meter / hectare / year
Chile
Planted area (hectare)
Eucalyptus: planted area in 2010¹
States
x 100000
Planted area (hectare)
Eucalyptus: planted area – hectare¹
16
14
12
10
8
6
4
2
0
2005
2006
Sao Paulo
2007
2008
Minas Gerais
2009
Bahia
2010
Time (years)
Planted area (hectare)
Pine: planted area in 2010¹
States
Planted area (hectare)
x 100000
Pine: planted area in 2010¹
8
7
6
5
4
3
2
1
0
2005
Parana
2006
2007
Santa Catarina
2008
Rio Grande do Sul
2009
Sao Paulo
2010
Million
Total planted area¹
7
6
Hectare
5
4
3
2
1
0
2005
Pines
1,831,485
Eucalyptus 3,462,719
Total
5,294,204
2006
1,886,286
3,745,794
5,632,080
2007
1,874,656
3,969,648
5,844,304
2008
1,832,320
4,325,430
6,157,750
2009
1,794,720
4,515,730
6,310,450
2010
1,756,359
4,754,334
6,510,693
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)
Where are the main timberland owners in Brazil?

The south region was the pioneer of tree plantation;
 75 % of the tree plantation are
located in the south
 Minas Gerais, Sao Paulo, Parana, Bahia, Santa
Catarina, Rio Grande do Sul and Mato Grosso do
Sul have 88 % of the total;
 Most timberland owners are vertically
integrated companies or directly related to
them.
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)
R$ 2,3 billons in 2010²
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)

2001 – First international TIMO aquisition:


State of Parana – Global Forest Partners (GFP)
R$ 1,9 billons in 2008

100% Americans TIMOs

Investments in either plantation or convertible
native forest

Investment of $ 1 billon anticipated, 2008 - 2018
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)
Numbers of TIMOs per State
4
3
2
1
0
SC
MG
RS
PR
BA
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)
Timberland Investment Groups
Global Forest Partners
State
Area (hectares)
RS,PR,SC,BA
113.100
Brookfield
SC,MG
31.700
RMK
RS,MG
21.500
Resource Management Service
SC,PR
13.100
The Forest Company
MG
6.000
Four winds Capital Management
MT
4.000
Hancock Timber Resource Group
PR
3.890
3. TIMBERLAND INVESTMENT MANAGEMENT
ORGANIZATIONS (TIMOs)
Land Price – US $/ Acre5
12000
10000
8000
6000
4000
Bahia
Minas Gerais
2000
Parana
Santa Catarina
0
2005
2009
2010
4. FUTURE PERSPECTIVES
JP Morgan Brazil Risk³
1600
1400
1200
1000
800
600
400
200
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Time (years)
4. FUTURE PERSPECTIVES
Timber industry growth rates (%)4
160
140
120
100
80
60
40
Timber
20
Pulp and Paper
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Time (years)
4. FUTURE PERSPECTIVES
Percent increase in total planted area, 2005-2010¹
Amapa
Bahia
Espirito Santo
Goias
Maranhao
Mato Grosso
Mato Grosso do Sul
Minas Gerais
Para
Parana
Piaiu
Rio Grande do Sul
Santa Catarina
Sao Paulo
Tocantins
Other
Total
-500
MA: 150 %
MS: 200 %
TO: 2,150%
0
500
1000
1500
2000
2500
FUTURE PESPECTIVES

Where can we go?
Why Brazil ?
4. FUTURE PERSPECTIVES

Law against purchase of land in Brazil;

New productivity estimations;

Improvement programs (dry regions);

New forestry projects for energy;

Low land price;

New areas, new analysis, new risk.
REFERENCES
1 - Brazilian Associatio of Tree Plantation – ABRAF –
2010;
2 - Institute of Economic Research – 2010;
3 - Statistic and Geograph Institute - 2010;
4- Agrianual – Agricultural Prices Report – 2010.
Bruno Kanieski da Silva
brunokanieski@gmail.com