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eu 001Eucalypts take a voluntary pruning when a drought is about to break.
Image credit: Southern Cape Corridors

Anticipating that a drought is about to break on the land, there is a genus of trees, 800 species strong at last count, who will drop their branches. They ‘take a voluntary pruning’ – just like those lizards who lose their tails when stressed or threatened. ‘Forecasting’ their inability to maintain the full tree in good productive health, they reduce their size by dropping branches. These are the eucalypts, the so-called widow-makers, because if you happen to be that unlucky chap or lady walking under the tree when it drops its bough … well, that’s the end of you!

The maligning of these trees does not end there however, having evolved their life-cycles on the flood-plains and riverbanks of Australia’s great rivers, eucalypts are hydrophilic or water-loving trees. If transported and grown outside of their endemic ranges in large enough concentrations, eucalypts will seek out ground water and drink it all up at a rate of many, many litres per tree per day.  Governments around the world have introduced a ‘water tax’ on exotic or non-indigenous species of trees like eucalypts. Fortunately, these Wallabies are excellent tax-payers no matter whose country they find themselves in, and believe me they are international travellers of note. Consider the hectares of land they cover on continents foreign to them:

Continent Hectares (ha) of eucalypt planted forest
Africa 2 million
Asia 11 million
Europe -
North & Central America 500 000
Oceania 40 000
South America 7 million

Source: http://www.fao.org/docrep/004/Y2316E/y2316e0b.htm

eu 002South Africa has 600 000ha of eucalyptus plantations. 
Image credit: Southern Cape Corridors

NOTES

(source: http://www.eucalyptus.com.br)

These numbers beg the question: why, if they are an annually taxable commodity from seedling to maturity, would an investor make a business out of Eucalypts? Here are a couple of the good reasons I could find:

  1. Eucalyptus Oil retails for around R1 450 per litre.
  2. Certain species of eucalyptus, red river gum for example (E.camaldulensis), sells for between R7 500 and R10 000 per cubic metre.
  3. Bags of woodchips and small logs are used for firewood and sell for an average price of R15 per 10kg bag.
  4. Leaves and bark of the trees make excellent mulch and can sell for R20 per dm³.
  5. Sawdust, used in mouldings and briquettes, sells for R20 per bag of 10kgs.

Almost every gram of biomass produced by the Eucalypt can be monetised! An immediate response to this is: yes, but how long does one have to wait for the tree to grow to maturity? Despite being a hardwood, at about 900kg/m³, most eucalypt species can be felled for their timber in 8 to 10 years. Other hardwoods, beech trees, for example, require at least 20 years before being logged.

An adult tree of 40m could generate the following volumes:

  • Oil – 5ℓ at R1 450/ℓ = R7 250 (through its life)
  • Timber – 5-8 m³ at R 8 500/m³ = R50 000
  • Woodchips – 50kgs = R75
  • Sawdust – 50kgs = R100
  • Leaves and bark – 50kgs (through its life) = R300

eu 003Almost every gram of biomass produced by the eucalypt can be monetised. 
Image credit: Southern Cape Corridors

One mature red river eucalypt can generate a conservative, theoretical gross income of very close to R60 000 profit before interest and tax! Yesterday’s widow-makers have grown into today’s rain-makers.


 

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