Business Strategy and Competitive Advantages
The iPlantForest Group aims to be the largest reforestation company to recover degraded areas in Brazil. iPlantForest permanently invests in research and development of seedling production techniques, fast planting and organization for wood certification and constantly updates its computerized management system to obtain the highest levels of control and satisfaction of its customers and employees. Revenues from wood exploitation, when this is the objective, or even from the exploitation of reforested areas, when agroforestry or other forest exploitation systems are planted, allow the business of recovering degraded areas with reforestation to be a self-sustaining business. We focus on cash generation to generate value for our investors and allow reinvestment throughout the project, based on pillars such as creativity and innovation, adjacent businesses and disruptive industry.
The iPlantForest Group has its own management system, created the fastest and most efficient seedling planting machine, the Forest.Bot (Patent Pending), and is looking for innovative alternatives for the recovery of degraded areas with forest planting or afforestation.
CREATIVITY AND INNOVATION
Challenge old practices by seeking greater efficiency and assets that are more competitive.
The iPlantForest Group does not settle for repeating age-old forest production and management practices (for example, forestry). It also does not accept the fact that planting forests, instead of monoculture, is a much more complex and expensive task. From the creation of new equipment, systems and methods for producing seedlings in the nursery, planting forests (native and exotic species), efficient management of these forests, always thinking outside the box, we can compete with advantages with the illegal timber industry, helping to preserve native forests and providing a safer and more competitive alternative for our client.
The main action to succeed in this initiative is the tireless search for the new, for what has not been tried, for the different, for the unusual, carefully evaluating millenary processes and seeking the optimization of each small task, always facing the fear of making mistakes, the fear of look different, resulting in faster and more efficient processes, bigger, better and faster results in the production of seedlings, and wood production similar to that obtained in the most successful silvicultural enterprises of today.
Investing in research and challenging our employees and scientists is a constant in our company’s innovation process.
Focus on the diversification of forest species, ensuring the permanent and consistent exploitation of bio products and wood.
The iPlantForest Group invests in the mechanization of forest planting (it created the Forest.Bot machine (Patent Pending)), and not just monoculture, to allow the installation of true forest systems from which we will be able to extract permanently and consistently for an indefinite period, bio products for the chemical, pharmaceutical and cosmetic industries, among others, thus guaranteeing an income that adds value to the recovered Legal Reserve areas and Permanent Preservation Areas, further stimulating the decisions of rural landowners to reforest their environmental liabilities. In addition to the gains from the exploitation of bio products, we also created a strategy for logging with cuts in 8 years, 10 years, 12 years and 18 years, which further enhances the curve of financial returns per hectare, making the entire enterprise even more attractive to landowners and streamlining the average return on investment curve.
Creating solutions to problems not faced until today
The timber industry has been supported by the same age-old solutions to ensure relatively well-balanced returns since its foundation. We are not denying the sector’s financial potential, with regard to both wood derivatives and the products resulting from its transformation. However, we decided to face a bigger and more complex problem, which is to recover degraded areas, establishing partnerships with landowners to carry out this recovery, at the same time help to fight climate change, zero CO2 emissions, comply or try to comply with the Paris Agreement and the challenges of the climate, in short, an agenda that is much more linked to the solution of problems that afflict the entire existence of life on earth.
With these ideas in mind, we decided, just to finish the enormity of the task, to invest in software solutions and machines that would allow us to face the problem and overcome the difficulties presented. In this sense, we created a new management system that grows every day, and whose purpose is to organize, monitor and guide the company towards the monumental task we are facing. After all, the information generated by all the innovations in the nursery and in forestry needs to be compiled, read and analyzed, to obtain new solutions to old problems, and to guarantee that a planted forest can bear fruit, that we can reinvest in new forests, creating environmentally balanced and correct solutions and allowing the conscious and permanent exploitation of these areas.
We work with living forests, with biodiversity, with regeneration and above all with innovation and courage.
We create and continue to challenge our creativity in the sense of breaking with old practices and taking risks in the construction of new mechanical and software solutions, tirelessly.
Lowest production costs on the market and 100% interconnected operations
Thanks to the concentrated investments of the iPlantForest Group in the development of distributed management systems in the cloud, in the development of techniques for the production of seedlings, dormancy breaking and in the research of clones of native species, and of the efforts concentrated in the creation of revolutionary methods of planting and More recently, from the construction of 4 different versions of the Forest.Bot forest planting machine (native and exotic species), we managed to reach the mark of the lowest cost per seedling planted in the market.
In contrast to the forestry development market, which has a specific focus on silviculture, primarily planting eucalyptus and pine, the iPlantForest Group dedicated itself to planting forests with native varieties by region and exotic ones, in such a way that liquidity events are comparable to the liquidity events of the markets above mentioned. Our liquidity events begin in the third year, with some even more premature, such as the sale of the Forest Replacement Credit (CRF – click here to find out more), through the exploitation of bio products taken from the native species that make up the plantation mosaics, in addition to the exploitation of wood with cuts that started in the 8th year, and continue with 10 years, 12 years and final cutting in the 18th year, generating revenues that vary, in the most conservative analysis, around BRL 197,000 per hectare.
Proximity to export areas
The iPlantForest project was started in the state of Roraima, which is close to the port of the capital of the former British Guiana, which is the closest port to the Panama Canal from a Brazilian city. From British Guiana, the exported raw material arrives at the Panama Canal in 4 days, which significantly reduces the cost of transport in the export of wood and bio products to all markets in the world.
Proximity to several ports in the region, which are within a radius of 600 to 1200 kilometers, makes our products even more competitive, even being able to compete with the illegal timber market, which we sincerely believe will not have the strength that has today (2020) in the years to come.
The company’s projects are for expansion throughout the Legal Amazon region, that is, the Brazilian Amazon, and in all these places we will take the same techniques that have made us so attractive to investors who have a concrete need to reduce CO2 emissions, those who have problems with environmental liabilities that need to be resolved, those who like to invest in the medium and long term in sustainable and environmentally correct products, and for anyone who is concerned with promoting ideas that help save the world while generating wealth.
Respect for clean energy production
All the electrical energy used in the project is generated in our Solar plant. We invest in solar plants to produce clean energy and reduce costs.
We think about the rural producer and nature
The project as a whole has a strong socioeconomic and environmental appeal, as it solves the problem of deforestation, reforesting areas with environmental liabilities, and does this with native and exotic forests, something that is much more difficult to implement than planting monoculture tree species. .
TECHNOLOGIES THAT MAKE IT EASY AND CONSTANT TRAINING
The iPlantForest Group has invested since its founding in 2016 in cutting-edge technologies to simplify and standardize all day-to-day operations of the company. Every day we are challenged to create, improve and systematize all our tasks. We are creating a real factory for planting forests, with identification and systematization of everything that needs to be done, from the production of seedlings to the cutting and exploitation of bio products from our forests, which will allow us to inaugurate industrial structures for planting forests anywhere in the world. Brazil or the World, with the same quality standard that we print in our first branch, in Boa Vista, Roraima.
Our team, both administrative and field, are periodically recycled and trained for new technologies, and for everything we are doing, seeking a higher quality of processes, more safety for our employees, and a higher level of professionalism, found only in very large companies with many years of existence.
DIVERSIFICATION OF PRODUCTS AND GENERATION OF SOLID WEALTH
The production of wood and all its wood derivatives at lower costs allows us to compete, even with the illegal wood market that still exists in the Legal Amazon. We obviously believe that in the near future, the sale of illegal wood and bio piracy in the Amazon will fall to more acceptable levels, for the market and for the protection of the native forest; however, today’s reality is that we compete with the illegal market.
Some recipes put us in a position of competitive advantage, also the high value of the exotic wood we cultivate, and the possibility of exploiting the bio products extracted from the planted forest from an early age, and for countless years.
Among the products that we will commercialize, we can mention: antioxidant and antitumor bio actives, essential oils, bio insecticide, bio herbicide, antimicrobial, anti-fungicide, sedatives, anxiolytics, antianginal, antiseptic, emollient, exciting, tonic, vulnerary, among others, in addition, of course , wood products such as stakes, fences, platforms, partitions, logs, panels, logs, sawn wood, sawn and dry wood, among other products, which will begin to be sold after planting, as some bio products begin to be extracted right in the first year of planting, and the thinning of the forest for the sale of wood will be carried out from the 8th year onwards.
Soon after completing the forest planting, the company issues and can sell Forest Replacement Credits (CRF). For each hectare of exotic seedlings planted, we can emit 150 CRF, and for each hectare of native seedlings planted, we emit 200 CRF. The current minimum value of the CRF is BRL 60 per unit.
Therefore, each planted hectare yields an average of BRL 8,000 per hectare right after planting and issuance of forest replacement credits. This first income helps the company cover the first costs of planting its forests, and generates solid cash to continue the project. The proceeds from the sale of bio products and wood below will help the company to grow and reinvest in more forests. The challenge of planting enough trees to combat climate change requires a permanent and very strong income, and this income is perfectly supported by the activities that we integrate, permanently and constantly over the years of existence of the forests.
Regardless of operating in a market where the sale of illegal wood would stifle the sale of softwood (eucalyptus, pine, etc.), in the case of hardwood (african mahogany, ipe, cedar, etc.), not so much, because it is high market value, and produced with modern planting techniques, which greatly reduce all costs of the crop.
We formatted a robust business, thanks to investments in new technologies, management systems, artificial intelligence, process automation, Forest.Bot (Patent Pending) planting machine, other equipment that we have been building over the years, new work methods, and all investments in innovation that are the hallmark of our companies, and of our presence in the market for over 38 years.
DIVERSIFIED PRODUCT CATALOG
The iPlantForest Group is the first initiative in the world to carry out the planting of forests, not monoculture, with native and exotic species, using selected native species for the exploitation of bio products from their planting, which works on an industrial scale with this planting. Normally, reforestation projects with this specific focus are projects implemented in very small areas, almost experimental. Real forest planting, creating mosaics combined by several species are rare and so complex that they hardly leave the sphere of isolated experiments.
The invention of the forest planting machine (Forest.Bot, Patent Pending), which is already in its fourth version, tested, adjusted and approved, and its construction by specialists with extensive experience in forest planting, places us in a privileged and unique situation to be able to execute our project and make our dream come true.
For this reason, we have a varied catalog of products from different species, both native and exotic, which guarantees us a solid position in the hardwood timber industry. Among the main products, we can mention bio products extracted from the forest base and wood, ranging from wood for fences to sawn and dry wood for furniture and decoration.
Remembering that the extraction of wood in our planted forests will always be through sustainable forest management, and will remove for years, slowly and in a way that does not harm the planted forest, only the exotic trees, and this management will not cause any negative impact or degrading in the recovered forest. On the contrary, a native forest undergoes self-management processes, and in our case, we will reproduce these natural movements of the forest, without damaging it, and without harming the environment.
The most important structural basis for the creation of the iPlantForest Group and what defines us is the fact that we formed this group of companies to combat one of the most complicated and difficult problems of today. The recovery of the environmental liabilities of farms that may even be embargoed, bringing a self-sustainable economic alternative, with clear environmental gains, and allowing the reforestation of these areas to be a spring that boosts gains for the landowner, and not a hindrance, a problem . Depending on the profile of the landowner, we help with this highly profitable and long-lasting project, to keep him and his family settled in the countryside, without having to migrate to urban centers. The exploitation of bio products is an increasingly important source of wealth and provides consistent and lasting gains.
The “forest to eat” project brings security to our forests and jobs and income to the people who live around our forests. The idea came about as an alternative to protect our forests from fire. Training, funding the necessary investments for the installation of agroforestry within our forest, and offering an economic alternative for those who live in the interior and have few job options, and do not have the resources to implement an agroforestry. Our company pays all agroforestry implementation costs and provides technical assistance, with training and support, to help speed up agroforestry production within our forests. This initiative has helped us to protect our forests from fire, has improved soil conditions in the places where it has been implemented, and has helped poorer people to settle down and earn a solid income.
We signed a partnership with the Brazilian Army and offered agricultural inputs to support the operation hosted in the state of Roraima, at no cost to the Army. The vegetables from our agroforestry are produced with our resources, to help produce food for those who cannot afford to buy food. We believe that if everyone makes a small sacrifice, together we can build a better world.
Regarding the production of our wood, we are concerned with being in line with the prerequisites of the FSC, the most important certification body for wood in the world, and in order to maintain the level of demand required by them, we have developed methods and a sophisticated system that allows you to track all the trees from seedling to cutting, and in the case of trees that will never be cut, to know exactly where they are, registering their GPS position and all the information necessary for their handling from planting.
We sponsor amateur sports in the state of Roraima, serving athletes in Jiu-Jitsu, Parachuting, Motocross, Motorcycle racing, among other sports. Our athletes are true champions in their modalities and people we are very proud of, and we are honored to be able to support.
EXPERIENCED TEAM WITH FOCUS ON QUALITY AND INNOVATION
The iPlantForest Group brings together professionals from different areas with decades of experience in the main sectors where we operate, with emphasis on innovation in process management, technology, artificial intelligence, construction of new agricultural machines, covering the entire sectors where we operate. We are an AgTech, an agricultural technology company and we are constantly creating new standards and methods to gain scale in reforestation and forestation projects, which naturally translates into more value for our investors and shareholders.
Despite being a privately held corporation, we have the commitment of a publicly traded company and act as such, promoting transparency, better governance and clear results for our investors and shareholders.
We have concentrated efforts on improving governance practices that bring even more transparency to all the group’s actions, with emphasis on:
Implementation of the highest levels of Corporate Governance;
Incorporation of a new Code of Conduct widely disseminated among its investors, shareholders, employees, suppliers and customers;
We are in the process of creating committees for: Sustainability, Strategy, Management and Auditing);
By 2024, the Board of Directors will be reformulated to open vacancies for Independent Directors, following the standards of the Brazilian Institute of Corporate Governance.
FINANCIAL ADMINISTRATION FOCUSED ON MAXIMUM LIQUIDITY
The group’s financial management is 100% guided by policies and guidelines focused on mitigating liquidity risks. As a direct consequence, we maintain a level of cash and cash equivalents that we are convinced is sufficient to cover our short-term obligations related to debt, reducing the risks of debt renegotiation and rollover and the need to access the debt markets under conditions of crisis, such as the one we are experiencing today with the coronavirus. Our indebtedness is kept at low levels in the regular course of business, with additional debt limited to finance growth projects, taking into account debt service and cash flow generation from each project.