Governance
In keeping with our commitment to establishing a preeminent centre of excellence for teak, we collaborate with third party partners in Europe and Colombia with proven expertise, who share our values and who hold a strong track-record in the industry. Our governance is tactically developed to use third party checks and balances in our financial and technical processes.
Due Diligence
Legal on land acquisition
Due to Colombia’s political history, ascertaining title can be a complex process, and land acquisition can carry with it inherent risk. Scellec Teca works with very experienced legal advisors in Colombia who have vast local expertise in this area, ensuring that our investors are protected from land-title associated risk, and facilitating a consistent pipeline of farmland and grassland for teak plantations. A legal report is produced as part of our due diligence process which confirms that all legal aspects pertaining to the land are in order.
Environmental
We retain environmental consultants for each project, whose purpose is to carry out an environmental assessment to identify any habitats in the area that need to be retained, and to ensure that everything we do is done to sustainable best practice standards. A full review of all flora and fauna on the land under consideration is carried out so that we can a) ensure that our environmental impact is minimised and b) ensure that any protected species are identified and a plan put in place to safeguard them in the event that we acquire the farm. An environmental report is produced which ensures that we are in compliance with the laws of the land and that we meet best practice standards.
Technical
We assess environmental variables such as soil type and quality, climate including rainfall and temperature, and geographic risk to understand their potential impact on planting, growth, productivity, and overall operations. We carry out very detailed soil analysis, taking soil samples every 150m and we are the only teak investment company to carry out in depth analysis of the soil layers every 45 hectares by digging one metre by one metre soil pits as directed by Ray Keogh in the Scellec Teca Technical Procedures Manual for best practice – underlining our commitment to creating a centre of excellence for teak.
Community
We carry out a structured assessment of the local community in which the land is located and produce a report outlining any risks, but also the availability of labour, and needs of the local community. This assessment results in a recommendation to proceed or not, and enables us to develop a focused community support plan for the local people from a very early stage, which addresses employment, conflict resolution mechanisms and communication channels between Scellec Teca and the communities.
Financial due diligence
Scellec Teca has developed a detailed comprehensive financial model to analyse each Teak plantation’s viability before purchase, it needs to demonstrate a minimum IRR is achievable based on relatively conservative assumptions.
