Natural-Habitats
organic products grown in a sustainable habitat

FAQ

What is risk of the political climate in Ecuador?
Ecuador is already for many years a democracy and is politically a stable country. The current government is in place already for many years and has the wide support its people. Ecuador also has a strong legal system where ownership is fully respected.

How much is the return of investment influenced by the euro versus dollar fluctuation?
Indeed the euro and US dollar currencies fluctuate against each other. The investment in land and trees and all other costs are in US dollars. The return on investment in euros is therefore impacted by the fluctuation between the euro and the US dollar. This is the reason why we display the euro and US dollar currencies on our home page.

What are the forecasts of profit and return on investment based on?
Profit forecasts are based on production volumes that come from decades of experience in this field. This may vary due to climate circumstances. The local operating companies carry costs. These are made transparent in the financial overviews. The most important influencer is the (commodity) price of palm oil or teak. This is the reason why we put the price index of palm oil on our home page.

How does the sales process of palm fruits and palm oil work?
Each hectare with mature oil palm trees produces between 10 and 28 tons of palm fruits per year. Small farmers might produce 10 tons per hectare, large scale plantations using a lot of fertilizer and pesticides produce as much as 28 tons. Palm fruit comes in bunches of 20-35 kilograms of small seeds. These bunches are sold to the oil mill (in Spanish “extratora”). There, they are cooked and oil is pressed out. Eventually about 20% of the end product is crude palm oil. This has a reddish colour. This oil can be sold on the market, either to large users like Unilever or Procter & Gamble, or to wholesalers who will sell it on. Another option is to refine the oil or even create finished consumer products, like margarine.

What are the risks of sicknesses and fire?
Agro-products are products of nature, so there is always a risk of sickness and fire. Oil palm trees in particular are susceptible to too much water. This is a matter of managing the plantations well by depleting the water via canals. Teak trees are very strong and the biggest danger here is fire (because of the dry period). However, teak trees of 4 years age or more are known for withstanding fires very well.
One should keep in mind that the native environment of a tree or plant is always the best environment, eg. a teak tree, coming from Northern India, is used to at least 6 months drought per year.

Are the plantations certified?
All plantations of Natural Habitats Group, including the partnering farmers, are checked against the highest levels of sustainability. This means: transparent financial reporting, fair cost levels, social support of local communities, planting on degraded or grass land (no cutting of primary forest), use of natural resources like mules and oxen, and use of organic fertilizers, herbicides and pesticides.
Every plantation is certified by Ecocert, that is an external and independent organization.

What are the financial risks?
The financial risks are indeed there. The return on investment is relatively high, therefore the risks are high as well. The investment is also guaranteed by at least the value of land by putting up these in a trust as collateral. Remember: even in bad economic times people have to eat (palm oil!), or will build houses (teak wood!), so there is always a market!

What are the tax implications of an investment in Natural Habitats Group?
This heavily depends on the country where you live, where the investment is made from and your personal circumstances. We advise you to consult your tax advisor.

What is the impact of the palm oil price on the investment?
The impact of the palm oil price on the investment is high. This is explained in detail in the economic section.

What is the impact of the local climate and climate change?
“El Nino” has its origin in Ecuador. This phenomenon happens every 10 to 12 years and has a big impact on the world’s climate. For Ecuador it means more rainfall which is not necessarily bad for the trees. The current reports on climate change don’t predict a large impact on the weather in Ecuador for the coming decades.
La Nina is another climate phenomenon. This one happens more often, every 2 to 3 years, and causes significantly more rain in South America.

What does IRR mean?
The internal rate of return (IRR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or simply the rate of return (ROR). In the context of savings and loans the IRR is also called the effective interest rate. The higher the rate, the better a project financially is.

What does sustainable or sustainability mean?
There is no conclusive definition of sustainability so we have given great attention to define it. The word sustainability is sometimes used interchangeably with a long-term focus or durability. At Natural Habitats Group we believe both these descriptions are partially true, though sustainability is much more than that. At Natural Habitats Group we perceive sustainability as a combination of organic and fair trade business practices. Both these terms are explained in more detail below.

What does organic mean?
Organic refers to the production and processing methods, which have to be 100% natural. In other words during the entire production process we will not use any chemical products like for instance chemical fertilizers, chemical pesticides or chemical bleach products. We do of course use fertilizer, though these have to be 100% natural. For instance, before the oil pressing process the palm nuts are stripped from their fruit bunch. These empty bunches are put back on the land and serve as a natural fertilizer for the palm trees. Our pure organic approach to production results in 100% natural products without any trace of chemicals that might harm your health.

What does fair trade mean?
Fair trade refers to the honest and fair treatment of employees, local business partners and other stakeholders. Natural Habitats Group cooperates with dozens of partnering farmers who produce palm fruits for us. We pay the partnering farmers the market price plus a premium. Our employees are all paid minimum wage or more. Moreover, Natural Habitats Group invests in social services, health care, day-care facilities and other social projects.