Latex Plantation

[vexape]

Hi,

My wife (Thai, 22) and I (British, 24) are looking into buying a latex plantation in Bueng Kan (where our Thai family live and farm latex).

They've found us a 960 tree piece of land. The trees are eight years old and untapped. There is also a small house on the land.

We've been to visit (thankfully we took the 4x4!). It looks great. The land, and surrounding land is owned by members of the same family. This particular path is owned by a member that has decided to sell to fund a new business venture in Bangkok.

The land is Sor Por Kor. But has been 'inherited' three times previously by the new owner signing the paper as a cousin or sibling of the previous owner. The title deed (chanote) is due to be issued mid-2013. Just to clarify, my wife will be the SOLE owner of the property once the chanote is issued.

Our plan is to give this land to my wifes sister and husband (who currently farm latex in the south).

We'll be in for 1.8m after we've refurbished the house with mains electric, pickup, tools etc. The trees on our families farm (eight miles from this proposed farm) are kicking out 1.63KG each per month at the moment (I've measured). So we'd be looking at roughly 1,500KG a month total for ours.

Just looking for some shared wisdom. Anyone else in Bueng Kan? Etc etc. We live in Chiang Mai but will be back to Bueng Kan over the next fortnight to complete the purchase.

Any tips, pointers, advice is more than welcome.

Cheers, Tom.

[Mosha]

Ask in the stickied rubber topic

[loong]

Your plan is to give this land to your wife's sister and husband??

Why not put it in your wife's name?

You will not have an income from the land if you give it away.

[Mosha]

I wouldn't be an absentee farmer for all the Som Tam in Thailand

[jamescollister]

OP if the trees have not been tapped yet how would you know how much rubber they will produce and I will tell you now that you will not get 1,500 kilos a month from 15 rai. If that were the case I would have a private jet.

Second thing is if the trees are 8 years old and have not been tapped by the family, there is something wrong with the trees.

You will be giving a big wad of money to the family, who will still own the land and you will never see a penny back.

You want to do rubber in Thailand, you need to be here, preferable with a gun, or you are just throwing your money away. Jim

[glennb6]

Ahem... I/wife live and have a yang farm in buengkan. Would be able to do a little lookaround if you need. Let me know.

glennb6

[email protected]

[vexape]

Your plan is to give this land to your wife's sister and husband??

Why not put it in your wife's name?

You will not have an income from the land if you give it away.

As mentioned in the opening post. My wife will be the sole owner.

[jamescollister]

Your plan is to give this land to your wife's sister and husband??

Why not put it in your wife's name?

You will not have an income from the land if you give it away.

As mentioned in the opening post. My wife will be the sole owner.

Tread carefully, what you are told may not be what is real.

Sor Por Gor. 4-01 (S.P.G. 4-01) is an allotment of land from the land reformative committee. Under no circumstance may this land be bought or sold. It confers the right to occupy only and be transferred only by inheritance. It seems that the land may be used for agriculture only.

Your wife may get a charnote, but she will need to be a daughter or grand daughter to be sure. Someone else could claim the land by desent.

It's a lot of money spent on a gamble. Jim

[vexape]

OP if the trees have not been tapped yet how would you know how much rubber they will produce and I will tell you now that you will not get 1,500 kilos a month from 15 rai. If that were the case I would have a private jet.

Second thing is if the trees are 8 years old and have not been tapped by the family, there is something wrong with the trees.

You will be giving a big wad of money to the family, who will still own the land and you will never see a penny back.

You want to do rubber in Thailand, you need to be here, preferable with a gun, or you are just throwing your money away. Jim

Hi James,

Thanks for your input. I was basing my estimate on our families farm, who have trees of the that are seven years old and were opened in Nov12. They average out at 1.6KG per tree per month (1.6 x 960 = 1,536). What are you getting per tree and where is your farm? Would be keen to know? I assume you've made these calculations?

The farms in Bueng Kan, at least the ones we've visited do not cut until the trees are 6-8 years old. This farm has also been on that market (at a higher price) for a while. And they thought they would be more valuable uncut. What kind of problems would you be able to diagnose from uncut healthy looking trees?

I am in Thailand. And my family will be working the farm. They currently have a larger farm than I do, and they have no need for a gun. Why would I need one?

Regards.

[loong]

Your plan is to give this land to your wife's sister and husband??

Why not put it in your wife's name?

You will not have an income from the land if you give it away.

As mentioned in the opening post. My wife will be the sole owner.

Yes, you said that your wife will be the sole owner and in the next paragraph you say...

Our plan is to give this land to my wifes sister and husband (who currently farm latex in the south).

Maybe you meant that your wife's sister and husband will manage the plantation for you?

[Mark1971]

OP,

I assume that your Brother / Sister in law are going to tap the trees & manage the plantation, while you & your wife take a % of the income.

Here are a number of things you should carefully consider before you invest.

How stable / reliable / honest are your wife's family?

This whole investment relies on them be 100% reliable & honest, over a period of many, many years.

What is your planned return on invested capital?

Could you achieve a similar return with a less risky investment?

(Many Blue Chip UK Stocks pay a 6-8% dividend).

What type of tree clone is planted?

Some of the modern clones RRIT 251, RRIM 3001, JVP80 give a much higher latex yield than the traditional RRIM 600 clones.

How well have the trees been cared for?

Has fertiliser been applied?

Has a nitrogen fixing legumeous cover crop been planted?

What access is there to the land?

If you have to access via someone else's land, what would happen if you are refused access in the future?

Is there a source of water in the dry season?

You refer to liquid latex, when calculating potential income make sure you factor in that liquid latex has a 34% dry rubber content, the other 66% is water. When referring to cost / kg it is normally the dry rubber content which is being quoted.

Good luck.

[Mosha]

OP we are tapping 800 trees in Ranomg, and (when it's dry lol) we average 27 mats a nights, each mat being about 1.1 kg

Trees are 251 clones

[David006]

...some thoughts .

..guess this was the wifes idea?

..who informed you about the Chanote being issued?..."free beer tomorrow"? Still waiting for a paved road past our farm "promised" by head man 7 years ago...

...Sounds like you should ask someone other than "interested" parties to evaluate the trees...

..the ROI in rubber is certainly better than many investments but as Jim says, being an absentee gentleman farmer makes it a high risk investment..not to mention the ulcers..

However all the due diligence/research in the world will certainly help but it ain't for the faint of heart.

That said many Farangs are doing it and enjoying it and you should not let us know alls stop you if that is what YOU really want to do....will never know if I would have done it if TV and the like info was available when .......it is a nice life style for sure...

Think if I was your age the last thing I would be thinking about was getting into farming in Thailand...555

[Mosha]

I remember 1 post on the farming forum. A guys wife had an arrangement with family members to turn out mats on 1 for them 2 for us basis. The income wasn't what they were expecting Then his wife caught them at it. The family had reversed the cut. My wifes nephews even steal rubber from their grandmother!

[Gary A]

What is the average of the split between the owner and the tapper? I have heard that the owner keeps 60 percent and the tapper 40 percent. I have also heard of those percentages being reversed. With the owner getting 40 percent.

[Mosha]

Gary, we give the tapper 40%, some give 50-50 but my other half would expect them to pay for the fertilizer if she went 50-50

[jamescollister]

OP if the trees have not been tapped yet how would you know how much rubber they will produce and I will tell you now that you will not get 1,500 kilos a month from 15 rai. If that were the case I would have a private jet.

Second thing is if the trees are 8 years old and have not been tapped by the family, there is something wrong with the trees.

You will be giving a big wad of money to the family, who will still own the land and you will never see a penny back.

You want to do rubber in Thailand, you need to be here, preferable with a gun, or you are just throwing your money away. Jim

Hi James,

Thanks for your input. I was basing my estimate on our families farm, who have trees of the that are seven years old and were opened in Nov12. They average out at 1.6KG per tree per month (1.6 x 960 = 1,536). What are you getting per tree and where is your farm? Would be keen to know? I assume you've made these calculations?

The farms in Bueng Kan, at least the ones we've visited do not cut until the trees are 6-8 years old. This farm has also been on that market (at a higher price) for a while. And they thought they would be more valuable uncut. What kind of problems would you be able to diagnose from uncut healthy looking trees?

I am in Thailand. And my family will be working the farm. They currently have a larger farm than I do, and they have no need for a gun. Why would I need one?

Regards.

Sorry mate, anyone tells you they get X amount per tree per tap is gilding the Lilly. Trees are not machines, some will be good others bad and it takes years before they get to top output. Most Thai plantations will not give up enough latex to make sheet in the first year.

Only real method of calculating is on a yearly/seasonal basis.

Ask to see the sales dockets from when they sell rubber. Have a look at the branch height, if all the branches are over 3 meters from the ground, that at least says someone was caring for them. If the trees have a lot of limbs under 3 meters no ones looked after them.

My general experience, no one sells good rubber trees, good trees are a income for life and you don't even have to do the work yourself. Thais are not stupid and this in itself says something. If they could get a better price they would take it, but the land title is no good.

Thais sell land all the time and the change is made by the village head or sub Governor, been that way for years, but the lands office will still have the original occupier as the tenant, this type of land can not be sold because it was never owned in the first place, someone was given the right to farm it, not own it.

When if the charnot titles are issued in your area and there is even a slight dispute over who is using the land, they will walk away and tell you to settle it in a court.

If money is no problem to you go for it, but if you are hoping to make a nice littler over the years, think twice and get the real facts, maybe spend a few Baht and see a land lawyer. Jim

[vexape]

Your plan is to give this land to your wife's sister and husband??

Why not put it in your wife's name?

You will not have an income from the land if you give it away.

As mentioned in the opening post. My wife will be the sole owner.

Yes, you said that your wife will be the sole owner and in the next paragraph you say...

Our plan is to give this land to my wifes sister and husband (who currently farm latex in the south).

Maybe you meant that your wife's sister and husband will manage the plantation for you?

Correct, apologies, I worded it badly.

[vexape]

OP,

I assume that your Brother / Sister in law are going to tap the trees & manage the plantation, while you & your wife take a % of the income.

Here are a number of things you should carefully consider before you invest.

How stable / reliable / honest are your wife's family?

This whole investment relies on them be 100% reliable & honest, over a period of many, many years.

What is your planned return on invested capital?

Could you achieve a similar return with a less risky investment?

(Many Blue Chip UK Stocks pay a 6-8% dividend).

What type of tree clone is planted?

Some of the modern clones RRIT 251, RRIM 3001, JVP80 give a much higher latex yield than the traditional RRIM 600 clones.

How well have the trees been cared for?

Has fertiliser been applied?

Has a nitrogen fixing legumeous cover crop been planted?

What access is there to the land?

If you have to access via someone else's land, what would happen if you are refused access in the future?

Is there a source of water in the dry season?

You refer to liquid latex, when calculating potential income make sure you factor in that liquid latex has a 34% dry rubber content, the other 66% is water. When referring to cost / kg it is normally the dry rubber content which is being quoted.

Good luck.

Thanks Mark,

Some good pointers there, will make sure I find out.

Thanks again.

[vexape]

...some thoughts .

..guess this was the wifes idea?

..who informed you about the Chanote being issued?..."free beer tomorrow"? Still waiting for a paved road past our farm "promised" by head man 7 years ago...

...Sounds like you should ask someone other than "interested" parties to evaluate the trees...

..the ROI in rubber is certainly better than many investments but as Jim says, being an absentee gentleman farmer makes it a high risk investment..not to mention the ulcers..

However all the due diligence/research in the world will certainly help but it ain't for the faint of heart.

That said many Farangs are doing it and enjoying it and you should not let us know alls stop you if that is what YOU really want to do....will never know if I would have done it if TV and the like info was available when .......it is a nice life style for sure...

Think if I was your age the last thing I would be thinking about was getting into farming in Thailand...555

Hi, Originally my idea once I visited our families existing farm nearby. Chanote info is from the villagers. Our families farm was converted to Chanote two months ago and they said they are 'working their way around' to the area of the new farm in 2013. But I appreciate this is Thailand and this may be 'extended' for a longer period.

It's certainly one of those if you don't try you'll never know things. I already have investments and property in the UK and Europe.

I'm hoping to break even in 50-60 months (investment of 1.77m THB). Does that sound crazy to you?

Cheers for the pointers, Tom.

[vexape]

OP if the trees have not been tapped yet how would you know how much rubber they will produce and I will tell you now that you will not get 1,500 kilos a month from 15 rai. If that were the case I would have a private jet.

Second thing is if the trees are 8 years old and have not been tapped by the family, there is something wrong with the trees.

You will be giving a big wad of money to the family, who will still own the land and you will never see a penny back.

You want to do rubber in Thailand, you need to be here, preferable with a gun, or you are just throwing your money away. Jim

Hi James,

Thanks for your input. I was basing my estimate on our families farm, who have trees of the that are seven years old and were opened in Nov12. They average out at 1.6KG per tree per month (1.6 x 960 = 1,536). What are you getting per tree and where is your farm? Would be keen to know? I assume you've made these calculations?

The farms in Bueng Kan, at least the ones we've visited do not cut until the trees are 6-8 years old. This farm has also been on that market (at a higher price) for a while. And they thought they would be more valuable uncut. What kind of problems would you be able to diagnose from uncut healthy looking trees?

I am in Thailand. And my family will be working the farm. They currently have a larger farm than I do, and they have no need for a gun. Why would I need one?

Regards.

Sorry mate, anyone tells you they get X amount per tree per tap is gilding the Lilly. Trees are not machines, some will be good others bad and it takes years before they get to top output. Most Thai plantations will not give up enough latex to make sheet in the first year.

Only real method of calculating is on a yearly/seasonal basis.

Ask to see the sales dockets from when they sell rubber. Have a look at the branch height, if all the branches are over 3 meters from the ground, that at least says someone was caring for them. If the trees have a lot of limbs under 3 meters no ones looked after them.

My general experience, no one sells good rubber trees, good trees are a income for life and you don't even have to do the work yourself. Thais are not stupid and this in itself says something. If they could get a better price they would take it, but the land title is no good.

Thais sell land all the time and the change is made by the village head or sub Governor, been that way for years, but the lands office will still have the original occupier as the tenant, this type of land can not be sold because it was never owned in the first place, someone was given the right to farm it, not own it.

When if the charnot titles are issued in your area and there is even a slight dispute over who is using the land, they will walk away and tell you to settle it in a court.

If money is no problem to you go for it, but if you are hoping to make a nice littler over the years, think twice and get the real facts, maybe spend a few Baht and see a land lawyer. Jim

Hi Jim,

I made those calculations myself based on the families sales receipts. It amazes me that none of them have ever calculated the performance of the trees in this way... Surely having a average production figure per tree is a basic for any farm to keep track of performance?

Where is your farm? What kind of production (of liquid latex) do you get?

Fully aware of the risks. And I'm under no illusion that until we have the chanote in our hands with my wifes name on... we're at the mercy of Thailand.

We'll be selling liquid latex, as do most of the farms around us (including our family). Sheet production is something I am looking at for the future, but I've not researched it enough to comment at this stage.

Land lawyers don't like discussing acquiring this type of land. For obvious reasons. Have spoken to one though in Bangkok. Who said, it's a risk, but it's not impossible.

Cheers, Tom.

[Mosha]

Bear in mind you will be lucky to get 150 tapping days a year Trees shut down for 2 months for the annual leaf change. Allow for 2 very wet months, so that's 120 days gone out of 365. Most tap 2 then rest 1. So if say you get 30 kg/day out of your 960 trees and at a current price for mats at 82 Baht. work it out. Bear in mind the family will want at least 40% of the cut.

[vexape]

Bear in mind you will be lucky to get 150 tapping days a year Trees shut down for 2 months for the annual leaf change. Allow for 2 very wet months, so that's 120 days gone out of 365. Most tap 2 then rest 1. So if say you get 30 kg/day out of your 960 trees and at a current price for mats at 82 Baht. work it out. Bear in mind the family will want at least 40% of the cut.

Sure, I've factored in the two months of no farming at all. And have based the working days on what our family currently operate. We'll be selling raw latex as opposed to matts though. That's something to keep in mind for the future of this mini empire. And yes. All of my sums are based only in my 60% of the gross.

Thanks, Tom.

[Mark1971]

A very rough ROI calculation assuming a 50/50 split with the tappers, RRIM 600 trees in average condition, no additional ongoing investment by you. (Fertiliser / maintenance paid for by the tappers, pickup running costs are paid for by the tappers, you don't build a sheet factory).

960 trees @ 5Kg DRC / Year = 4800 Kg / Year

4800 Kg @ 50 Baht / Kg = 240,000 Baht / Year

50 / 50 split with the tappers =120,000 Baht / Year

ROI = 6.6%

15 Years before you recover your initial investment.

[jamescollister]

Hi Tom, if you Google my name or youtube, with rubber, Issan, Thailand you will find loads of Vids etc that I have posted.

We are down in the Emerald Triangle, Lao/Cambodia border. Jim

[Mark1971]

OP,

My knowledge on this subject is purely second hand & from research.

There are many members here who have real hands on experience, which is invaluable.

The wife & MIL purchased 200 Rai in Chiang Rai last year, so I have been extensively researching the details before my BIL plants the trees.

We are in the UK until I retire in 10 years, so there is no need for me to rush.

Land title is not Chanote, but the wife & MIL said that's the way it is in their village & the land was priced appropriately.

The wife owns the land, so if she is happy with the price & title deeds so am I.

As with any investment in Thailand, in the very worst case we would just walk away from it.

What is the price / Kg your family are getting for the liquid latex?

(I have never seen the price of rubber, sold in this manner).

The type of tree & how they have been looked after are very important, RRIT251 should give 1.7x the amount of latex a RRIM 600 tree will.

It would be interesting to see your ROI calculations, after you clarify these inputs.

[Mosha]

I was talking to a guy last week, and they sell liquid. From what he said he wasn't making much out of it. That said his wife isn't the sharpest tool in the box, and she spends a fortune on different foods etc. He's had enough of it and has told her to sell.

[jamescollister]

I am a liquid latex buyer, if I can get any, locals are happy to do cup as collecting liquid is work, We pay 20 Baht a kilo below the sheet price, DRC. So say 90 Baht for RSS we buy 70 Baht, cup would be around 55 Baht dry weight, When prices are higher the margin is greater.

Think the OP is actually talking cup rubber not latex. Jim

[glennb6]

Ahem, eh Tom, if you are selling liquid latex I may well be interested in buying from you as I'm in Buengkan.

Let me know

glennb6

[David006]

...some thoughts .

..guess this was the wifes idea?

..who informed you about the Chanote being issued?..."free beer tomorrow"? Still waiting for a paved road past our farm "promised" by head man 7 years ago...

...Sounds like you should ask someone other than "interested" parties to evaluate the trees...

..the ROI in rubber is certainly better than many investments but as Jim says, being an absentee gentleman farmer makes it a high risk investment..not to mention the ulcers..

However all the due diligence/research in the world will certainly help but it ain't for the faint of heart.

That said many Farangs are doing it and enjoying it and you should not let us know alls stop you if that is what YOU really want to do....will never know if I would have done it if TV and the like info was available when .......it is a nice life style for sure...

Think if I was your age the last thing I would be thinking about was getting into farming in Thailand...555

Hi, Originally my idea once I visited our families existing farm nearby. Chanote info is from the villagers. Our families farm was converted to Chanote two months ago and they said they are 'working their way around' to the area of the new farm in 2013. But I appreciate this is Thailand and this may be 'extended' for a longer period.

It's certainly one of those if you don't try you'll never know things. I already have investments and property in the UK and Europe.

I'm hoping to break even in 50-60 months (investment of 1.77m THB). Does that sound crazy to you?

Cheers for the pointers, Tom.

Hmm sounds like you are on the ball.....5 years should get you out from under..think our first 25 rai ( about 1milbt.)...took about 4 at 30-50bt kilo cup so it's not beyond the realms so to speak. Just keep your expectations realistic and I am sure you will be fine....Unfortunately it is a fact that "they" being some families or ....assume that you are infinitely rich and that any "extras" they can gain will not be missed and they will not be held accountable......since you know nothing ,foreigner yadda yadda...etc...sad but true....something we have to live with...good luck

d

Edited July 28, 2012 by David006