I too have looked at the survival rates of the trees and frankly aren't that concerned. Whilst you correctly pointed out that earlier plantations had low survival rates - since 2004, survival rates have been at 70% or above albiet well below PDS projections. In fact the weighted average survival rate for the plantations not including 2009 is 74% with improving trends.
I know you have concerns about this rate dropping with age, but this is not necessarily correct given that the 2000 project still has survival rates exceeding 70%.
Early project survival rates, tree growth and yield, have been massively effected by :insect damage, issues with host species (initially using African Mahogany etc) and weed control.
TFS have improved their plantation management techniques to reduce the above issues - including changing plantation designs, new host trees, implementing drip irrigation etc so I think we can safely say they are getting better at what they do.
The results of the early plantations are sure to disappoint but I believe they will prove the model - in that Indian Sandalwood can be successfully be grown in a planation and with better planation techniques in the later projects the returns from the investment can only improve.
Cheers NZsly
TFC Price at posting:
87.3¢ Sentiment: Buy Disclosure: Held
