Paulownia Investment

Robinia Invest has researched the possibilities of growing Paulownia in Germany for some time now and the time has come to offer an investment in Paulownia to our clients.
The Paulownia (or Kiri tree) is a remarkable tree, fast growing and a hardwood, it can be used for many different purposes. Ranging from use in furniture to surf boards, Paulownia timber is becoming quite a succes story worldwide.

Until recently, Paulownia could only thrive in warmer climates, but intensive research over the last few years has resulted in the development of a few clones that can also thrive in the European climate.

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Your Paulownia Investment after 12 years:

1. You will be leasing the land, not owning it. Projected return comes from sale of timber only.
2. You will be purchasing the land (freehold). Projected return comes from sale of timber and land.
   If you invest in 2 hectares you can pay the costs for Care & Maintenance in 4 yearly rates of           € 3,500. Your total investment is then € 54,000.

• In the table above we have taken the current price of € 430 for Paulownia Grade A, and € 324 for Paulownia Grade C, sawn and dried wood that is 12 years old. We have calculated that 60% of the timber will be grade A and 40% will be Grade C.
• In the table above we have calculated an annual price increase for timber of 6%.
• We have calculated a volume per hectare of 200 m³. Since we estimate that 100 trees per hectare will not have grown sufficiently, we only calculate 500 trees that can be harvested.
  So 500 trees x 0.4 m³ per tree, yields 200 m³ of timber.
• As with our Robinia investments, we have calculated 20% harvesting, drying and processing costs.
• All hectares will be irrigated to supply enough water throughout the summer season, when Paulownia grows the fastest.

Picture of Paulownia plantation

The German climate has one big advantage over the warmer climates in say Central America or Australia: it has real seasons!
The big benefit of having real seasons, with temperature changes, is that the produced timber is more colourful and therefore more appealing for the timber market. Naturally, Paulownia grown in Germany will not grow as fast as in warmer climates. This is benefitial for the quality of the timber though.

When Paulownia grows very fast, the quality of the timber is lower than when it grows slower. Slower growing Paulownia produces denser wood, which is stronger than that of faster growing Paulownia. In the timber trade this is measured as follows:

Grade C:   4 Growth rings per inch, with 2 defects
Grade A:   8 Growth rings per inch, with 0 defects

Class A is the most valuable wood. Naturally, fast growing Paulownia (as in the tropics) will only have a few growth rings per inch and the timber will be of less value than that of slower growing Paulownia (as in Germany).

Negative scenario for the Paulownia investment

We will plant the special Paulownia clones, which are especially developed to be able to withstand extreme cold weather, up to -20°. In the east of Germany is hardly gets colder than -15°.