Gayan Kanchana
Touchwood Investment PLC pioneered the Managed Agro-Forestry concept in Sri Lanka and specializes in growing high value exotic tropical timbers as an alternative and sustainable source of investment.
Touchwood Investment has been in existence for 11 years and the success of this company and the bullet proof business model is based on People - Whom they empower, Planet - which they protect and Profit - Ensured for stakeholders.
The beauty of their business is; these vital three elements are intrinsic in their business model making them a Triple Bottom Line company.
Touchwood is a public quoted company with a global presence in eight countries whose founder Roscoe Maloney is now the group Chairman of the organization.
Furthermore Touchwood has emerged as one of Sri Lanka’s most valuable brands ranked within Sri Lanka’s Top 100 Brand Index in 2009 and 2008 compiled annually by Brand Finance (Lanka), a subsidiary of a global entity.
Group Vice Chairman Asitha Koralage continues to play a pivotal role charting the course of the company during this exponential growth phase.
Over the years Touchwood Group has developed an array of sustainable forestry products to suit different investment requirements of both institutional and retail investors.
With over 5,000 acres of private forestry plantations that are home to high value, exotic tropical timber, Touchwood’s client portfolio exceeds 25,000 investors worldwide.
Touchwood Investments PLC Chief Executive Officer Channa Abeygunawardene, Plantation Head Prageeth Herath and Sales and Marketing Manager Jeffry Ebert were interviewed by Daily News Business.
Sales and Marketing Manager Jeffry Ebert said in 1999 Touchwood was founded in Sri Lanka by Group Chairman, Roscoe Maloney investing only Rs 500,000.
With the purpose of combating the rapid deforestation of old-growth forests, Maloney’s father-in-law, is a furniture maker by trade, often complained about the rising cost and scarcity of timber and indeed it was this close to home concern that encouraged Maloney to think of an out of the box solution for not only timber supply but also unmanaged deforestation in Sri Lanka.
Maloney also realized the potential for timber and commercial value in planting trees and that could be sold for a high rate of return and offered as a stable investment.
Touchwood was listed in the Colombo Stock Exchange in 2002 that was one of the major milestones of the company. The company went on to establish plantations in Thailand and register its holding company in Hong Kong in 2004.
Ebert also said, “In the years that followed, our global expansion program has developed 44 plantations encompassing more than 5,000 acres, a reputable representations in over 30 countries and planting three million plants around the globe. Achieving our first ISO certification in 2006, the Touchwood brand has become a stable and respected member of the top 100 companies in the country.
“We are also currently experiencing steady sales growth in the UK and throughout Asia a momentum we intend to sustain. In the coming year, we are targeting for entry into Japan, Singapore and additional countries within Europe. Like our trees, we continue to grow.”
Our group holding company is located within the heart of Hong Kong’s central business district, with our regional head office situated on the edge of Bangkok’s historic Lumpini Park in Thailand,” he said.
“We pioneered the concept of managed forestry in Sri Lanka with over a decade of experience in forestry investments, and we continue to be the benchmark for the industry.
The biggest benefit in this concept is one could take advantage of the supply demand gap in timber. Today timber mainly comes from our precious rainforests but now since this a business venture.
It opens up opportunities for people to invest in managed forestry and take advantage of this scarcity whilst providing an alternative source of timber for global consumption.
Global research has shown timber to outperform most other investment classes in the world. The micro-economical conditions has very little impact on timber values or timber related industries such as changes in the political arena and the volatility in financial markets and policy changes every now and then.
An investment in Touchwood is 100 percent asset-backed, in other words every investor big or small receives a plot of land and trees that are numbered and registered at the Land Registry and transferred as a deed to the client as collateral.
As as agricultural based company we are prone to natural disasters hence we maintain 100 percent buffer stock and a one to three volume stock as a contingency plan for any replacement of trees due to any reasons, this is done in accordance to ISO 14001, furthermore as an added security our plantations are fully insured.”
Just as the Triple Bottom Line concept is intrinsic in the company’s business model, the Corporate Social Responsibility is a highlighting fact of our company.
“Most of our plantations are situated in rural villages (36 plantations locally) and we have employed the local populace in all our plantations enhancing the livelihoods of these villages, alleviating poverty and rural infrastructure development is not something that we do separately, it is something that happens automatically with every project and every investment, hence the monetary gains are supplemented by the community development that happens alongside with this investment,” Ebert said.
Touchwood Chief Executive Officer Channa Abeygunawardene said, “On June 15 last year the rights issue of Touchwood Investment PLC was concluded with a subscription of 149 percent assuring a solid future for the company. It was oversubscribed by 49 percent.
This step was a natural corollary to the growing demand for the agro-forestation model that Touchwood exemplifies. Keeping in mind the tremendous growth potential of the industry, Touchwood Investment PLC has charted a clear and cohesive strategy for expanding the scope of its business while enhancing shareholder wealth.
The oversubscription of 49 percent was a clear indication of the confidence and belief that the valued shareholders portray of the company and their mission.
“For 11 years we have strengthened our stand again and again in-spite of the financial turmoil globally and the recent financial crisis in local soil owing to the rock solid business model, with the successful conclusion of the rights issue we have consolidated the fact that the public and the company shares a common view,” he said.
Abeygunawardene said: “The funds raised by the rights issue is channelled towards expanding the acreage under cultivation by a significant amount and further to introduce new products to the market.”
Touchwood has already invested in research and development facilities in collaboration with the Sri Jayawardanapura University by setting up a fully equipped tissue culture laboratory to develop more efficient and environment friendly agriculture practices, which even today is a strength that Touchwood possesses.
With the rights issue, Touchwood is in a position to invest in opportunities for backward and forward integration.
The funds would be further invested to strengthen the brand image and improve efficiency to create stakeholder value now and in the future. I am truly thankful to all our shareholders in believing in what we do and placing their trust in our future just as they did for the past 11 years.
“With 11 years of experience in agro forestry investment, we have the knowledge and organizational strength to deliver products and opportunities that are both socially responsible and highly profitable,” he said.
Abeygunawardene said, “Our priorities are simple; people, planet, and profit. Working toward this triple bottom line, we have achieved the following milestones as a group.
25,000 clients worldwide, 44 plantations spread throughout four countries 5,000 acres of, high-value trees comprised of seven unique species 24,000 acres of land secured for future development in Cambodia, on-target returns delivered for the past two years and counting, global presence in over 30 countries throughout the world ISO 9001 and ISO 14001 certifications for excellence in quality and environmental management.
Abeygunawardene said: “Touchwood Group also entered in to the flooring market with the commencement of work on our purpose built flooring manufacturing plant in Sri Lanka. The flooring manufacturing operation will be carried out through its recently incorporated subsidiary,” T Wood Flooring.
Touchwood Ltd Hong Kong holds 51 percent stake in the company and the other 49 percent stake is held by Touchwood Investments PLC. The setting up of the timber manufacturing plant affirms the organization’s commitment to value add to its produce from its plantations, lending assurance to its investors on their returns and also enhance the revenue streams to the company.
T Wood flooring specialized in the manufacture and export of wooden flooring solutions using state-of-the-art equipment in its purpose built manufacturing plant currently under construction. T Wood Flooring will cater to the high-end European and American markets.
T Wood flooring will initially manufacture flooring using bamboo.
Bamboo flooring has seen an exponential growth in demand because it is environmentally friendly, and distinct appearance and other natural properties. Bamboo is an extremely fast growing renewable resource and fast becoming a material of choice for flooring as against hardwood flooring.
Bamboo has been used widely in the Far East for centuries. Touchwood Group has acquired the technical know-how to convert this versatile material in to flooring solutions to meet the demand for flooring in ultra-modern houses and buildings.
The pre-processed bamboo will be exported from Thailand to Sri Lanka where 90 percent of the value addition will take place before being exported worldwide. Touchwood Group also grows bamboo in its plantations in Thailand, which it sells as investments to its clients.
Creating the capability to value add to its produce is part of the five year strategic plan, the company has chartered out for itself. This initiative will place Sri Lanka on the world bamboo flooring market, competing with China,” he said.
Abeygunawardene also said: “We are proud to announce that our Sri Lankan office, Touchwood Investments PLC has been awarded with the “Certificate of Compliance” by the Institute of Chartered Accountants of Sri Lanka for the Annual Report Awards 2010 - at the ceremony held on December 7, 2010.
This award is granted by the Institute of Chartered Accountants of Sri Lanka every year. They evaluate and grant awards in key areas such as - CSR, Financials, presentation and compliance. This certificate emphasizes that all requirements are being met in order for us to achieve our goals and serve our investors with industry leading standards.
“For the year to come Touchwood Investments PLC has its goals set on the CSR awards to be handed out in the 2011 ceremony,” he said. Touchwood Plantation Head Prageeth Herath said, “In looking to the future, Touchwood remains committed to the colossal goal of increasing its agro-plantation acreage to 15,000 acres over the next five years.
Going forward, Touchwood is confident of its ability to redefine the investment industry in Sri Lanka by proving undoubtedly time and time again that agro plantation returns are a win-win solution for all investors, future generations and for Mother Earth.
Herath further commenting on the current opportunities in the agricultural sector said that Touchwood Investments PLC would be developing plantations of coconut and other cash crops to meet growing demand over the next five years for which land has already been acquired.
At Touchwood we use agro-forestation as a tool for bio- diversity conservation. Our core business concept primarily revolves around environmental conservation. Touchwood is essentially in the business of Agro forestation, a concept that is widely acclaimed as a means to bio-diversity conservation and an alternative to more traditional approaches to biodiversity conservation that focused on protecting natural habitats in parks and reserves while ignoring the possibilities found within certain agricultural habitats.
Land protection, water protection and air protection are key elements of focus in our daily operations. In an effort to encompass best practices that aim to create a scenario of zero negative impact on the environment we adopt a series of global standards modulated and implemented through an Environmental Management System (EMS).
These serve as the framework for the company’s sustainability efforts. Working hand in hand with day to day operations of each agro-forestry estate, the EMS manages the impacts of the company’s activities on the environment,” he said.
Herath said: “We also initiated a national project to plant trees in all places of worship around the country with the guidance of the Environment and Natural Resources Ministry. We have been involved by the leaders of the country in their endeavour to set an example to the general public on preserving trees. Our plantations are situated in rural areas where infrastructure is minimal and the quality of life is poor.
As we expand our presence in these areas, we have enmeshed ourselves with the communities by assisting them with roadways, bridges and other infrastructure facilities, including assistance to upgrade nearby schools and places of religious worship.
Our presence has also meant that direct and indirect employment opportunities are on the increase - and the resultant increase in income has had a cascading effect on the quality of life of the villagers and their children.
Herath also said President Mahinda Rajapaksa implemented a tree planting campaign of 1.1 million trees as part of his birthday and the beginning of his second tenure in office.
In accomplishing this extraordinary act of generosity to Mother Nature, Touchwood Investments PLC planted 200,000 trees to further the vision of the President to stand witness and to be a part of this lasting legacy towards a greener Sri Lanka.
A business encompassed with a vision to “Save the rain forests” Touchwood Investments PLC has taken the world by storm by establishing operations in eight different countries globally.
As a corporate social responsibility the company has taken their vision to 500 religious locations by growing in excess of 50,000 trees in collaboration of the Environmental Ministry with the view of encouraging the local populace of these areas to sustain our precious rainforests.
source - www.dailynews.lk
By Thushantha Jayatilaka
