Commercial Forest Plantations in Colombia
Colombia has different types of technologically improved forest plantations which can be developed in a sustainable manner over more than 14 million hectares suitable for growing.
Why invest in the Forest Plantation sector in Colombia?
Sector’s growth potential in Colombia.
- Colombia has more than 14.1 million hectares that are either highly or moderately suitable for sustainable commercial forest farming; these areas are mainly located in the departments of Antioquia (16%), Meta (10%), Córdoba (8%), Santander (7%), and Magdalena (7%).
- Additionally, 26.4% of the land is located in ZOMAC areas (Areas Most Affected by Armed Conflict), which offer tax benefits to new investors.
Source: UPRA (Rural Agricultural Planning Unit) - https://sipra.upra.gov.co/
The country's commitment to sustainability.
- By signing the Paris Agreement, Colombia has pledged to reduce greenhouse gas (GHG) emissions by 20% from the 2030 business-as-usual scenario. Furthermore, Colombian companies and producers hold 73 FSC forest management and chain of custody certifications.
Source: DNP (National Planning Department) - https://www.ods.gov.co/es/objetivos/accion-por-el-clima
Great potential in Colombia’s local market.
- In addition to the international demand, Colombia currently faces a negative trade balance in timber and wood products, which implies a deficit in the supply due to growing demand and also presents an opportunity to invest in new forest plantations to meet the growing domestic demand for timber and wood products. Also, Colombia has potential for the carbon credit market.
The are several regulations in the forest plantation sector to promote sectoral development.
- Colombia has implemented standards and benefits to strengthen the sector and generate opportunities for growth. To this end, the country has legislation in place to specifically define the activities that are exempt from income tax, including the use of new forest plantations such as guadua bamboo, rubber, and cashew, as well as to promote research, development, and investment in the production and use of non-conventional energy sources. As another incentive, there is a customs duty exemption for import of machinery, equipment, materials, and supplies for new investment projects in non-conventional energy sources.
Investment opportunities in the forest plantation sector:
- Expansion of the cultivated forest area in the country into the 14.1 million available hectares with potential for growing commercial forest plantations.
- In order to offset the effects of global warming from industrial activities, Colombia has implemented new mechanisms to drive investments in environmental projects that will reduce GHG emissions, through the carbon credit market.
- Manufacturing plants to produce lumber and primary processed wood products to be used in construction, architectural carpentry factories, and for home and office furniture.
- Agricultural products & Food production
- Healthcare services and life sciences
- Hospitality and tourism infrastructure
- Information technology and creative industries
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- Private equity and venture capital
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