“We want to change certain beliefs and by being determined we have shown that this can happen. The market has reacted swiftly because a forest is a great investment which unfortunately has not been conveniently available for the broader public until now. There are those who want to invest in forests, and we have opportunities in Lithuania, Latvia, however the process gets often delayed or interrupted by various bad practices and simply a history of continued bad customer experience in forestry market, which is one of the most important factors in the final decision”, comments the CEO of Foros, Justas Kaveckas.
Digital forest management solution
The creators of the platform say that setting transparency as a strategic goal helps to develop and grow the product – the green investment platform Foros because it resonates well with forest owner needs. The company also operates in Lithuania under a brand name Forest Auction, which is already a member of the Clear Wave initiative.
“We are changing the forestry industry by making it more effective, accessible and understandable for everyone. Our company represents the interests of forest owners and strives to get the best possible prices in the market. Making these transparent, the results came fast: we already see that more and more people are discovering forests as an investment”, says J. Kaveckas.
“There are companies that claim they help the forest owner, however when one starts to dig deeper, it is not hard to discover that their interests lie with forest buying intermediaries who are hiding behind the founders of these companies. The idea of an auction started from the instance when Foros co-owner Tadas Palaima got a call from a forest owner who asked to get the best possible price in the market. When we started getting price offers, it became obvious what kind of a situation is in the market and how forest owners are ‘mugged’, abusing the fact that forest owners do not know the real forest value or do not have the time to understand all bits and pieces of forest price valuation”, says J. Kaveckas.
Three cases of misleading behaviour
“There are instances when a forest buying intermediary calls the person who has some forestland, tells that they are on holidays abroad and that they would very much want to buy their forestland, then offers an extremely high price to raise expectations sky high – all with the intention to confuse the forest owner” shares experiences the CEO of Foros, Justas Kaveckas. Afterwards the forest owner will reject other honest forest buyers’ offers. What happens is “the first love for the highest price”. Over time these honest forest buyers will discontinue having conversations, thinking that the forest owner is overly arrogant and “detached from reality”.
Later the “back-from-holidays” forest buyer intermediary visits the forestland and – unexpectedly for the forest owner – harshly criticizes the forest value. New buyers do not come forward and the forest owner sells for this new, much lower price. This is a certain forestland buying “black technology”.
Another occasional cases are when a forestland auction has already started, the intermediary calls the owner and asks to discontinue the auction, that is against the rules, tempting to sell to them at a slightly higher than the initial auction price. Such action might be just the beginning of trying to fool the owner, thus it is not recommended to get lured by such temptations.
On the other hand, it can happen that the offered price is simply too small. This happens quite often in such an active forestry market. “Finally, there can be cases when the forest owner is offered a price of a young forest for a mature forest”, says J. Kaveckas.
Therefore the forest platform specialists recommend to consider the offered price in a composed manner, assess it realistically. There may be all kinds of offers but not all of them will become a reality. Forest price depends on species of trees, their real condition, environmental forest logging restrictions, and many other factors. To evaluate the forest market price one needs an expert view and advanced systems for estimating the forest value.
J. Kaveckas says there are situations whens people are searching for help because they have “almost sold” the forest a few times cheaper than the market price – even in such situations the forest platform specialists will search for a solution, if one is possible, and will try to help the forest owner get the real value of their forestland.
Abandoned versus well managed forest value
Forest management experts explain that it is important to understand that if the forest is abandoned, it may be difficult to expect good results and a return on investment in the short or long term. In an abandoned forest not only the timber growth volume is lower, but also there may be diseases, timber theft cases, forest roads may get damaged when not monitored, also an unmanaged forest undergrowth may increase wildfire consequences.
“Perhaps many of the Lithuanian residents whilst mushroom picking or camping in a forest have noticed abandoned forestlands, where tree branches are so tightly knitted together that not even a deer or a human would be able to set their foot in – in such cases wildfire consequences would be horrible to imagine. Such a viewpoint, however, is commonplace and is one of many examples that illustrate cases where the forest owner does not understand how to manage a forest or relies on someone who does not have the required competences”, Justas Kaveckas discusses abandoned forests.
J. Kaveckas says that Foros team and the business idea is unique because it connects a digital, transparent platform with a timely, efficient and professional customer service, in cases when forest investment advice is the most sought for.
Taking care of forests – becomes simple
Forest platform Foros creates IT solutions which make forest management and green investments simple and accessible for every Lithuanian resident. Once you are connected to the platform, you can find out the current forest market price, and when the time comes, choose how to manage it, what kind of actions to perform, and also to order a forest value growth plan.
“One of our main goals is to make sure that the forest owner – platform user – would get a fair price for their forest”, says Justas Kaveckas. Due to this reason, and the striving for more transparency and positive changes in the forestry market Foros has joined the Clear Wave initiative. “By taking this step we want to draw the attention of Lithuanian people and encourage them to choose companies that adhere to high ethics and transparency standards”, says one of the creators of the platform.
“We congratulate Foros on joining the community of transparent and ethical companies, and hope that together we will be able to change some old-fashioned beliefs, myths and remaining bad practices”, says Ieva Lapeikiene, the head of the transparent business initiative Clear Wave.
