“Trees are like stocks, do you want one stock or more? Diversification is key.” Interview with Bruno Mariani, CEO and founder of Symbiosis Investimentos
Climate Pioneers No. 11: Bruno Mariani reveals how he went from investment banking to forest restoration and how the two are not unlike.
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Symbiosis Investimentos is a Brazilian timber operation that orchestrates everything from raising capital, to selecting species and managing forests. In this interview, CEO and founder Bruno Mariani elaborates how his company aims to set a new standard for the wood industry.
Why did you start a timber company?
Bruno Mariani: Pastures and eucalyptus plantations for pulp production have eaten the Atlantic forest in Brazil. More than 90% of the original surface is devastated. In 2008 I started thinking about large- scale restoration of the forest. As a former investment banker I knew human beings are economical beings and donations to restoration organizations will not be enough. We would need huge amounts of money to restore these large surfaces. A company was the right tool to make the vision happen and control the costs.
What happened next?
Bruno Mariani: I analysed the successful pulp and paper industry in Brazil sourcing uniquely from eucalyptus monocultures. But trees are like stocks, do you want one stock or a balanced portfolio? Diversification is key. I saw a big opportunity in producing wood from endemic trees for construction, architecture and design purposes. But there was one big problem: we had no data on local species at that time. Brazilian universities only researched pine and eucalypt. So on the basis of estimates I calculated a real rate of return of 12% and went to investors with a proposal of a pilot research project to produce data on local species. We started a test ground on 1’000 hectares in Bahia. This region is excellent for silviculture: high temperatures, a lot of sun and rain. In the next 7-8 years we collected data to confirm our calculations. We tested 56 species and narrowed the list down to 22 species after 5 years. We started to collaborate with universities and NGOs such as the World Resource Institutes to research and publish data of tree growth, costs of land and wood prices and quality. A whole ecosystem around local species was born.
What are the plans for the future of Symbiosis Investimentos?
Bruno Mariani: We can now estimate the real rate of return between 12-20% and are ready to expand. We’re slowly building up the surface from 1'000 to 10'000 of hectares of rich forests, and then will go to 100’000 hectares in the next 15 years. Territory for expansion is no issue, since Brazil has huge areas of degraded land to plant forests. The wood quality is excellent as has been proved by the federal universities of St. Paulo and Bahia. We’ll be selling the wood in Europe, US and China. But most of all we’ll continue to restore the forests and ecosystems. 40% of our total surface is reserved for restoration of native forest (the law in Brazil is 20%). Every river bank on the property has to be planted with native trees, not for wood production, biodiversity is the objective there. So in total 40% of the surface is restoration, 60% is production, which covers the cost for restoration. The fauna can benefit not only on the conservation areas but on 100% of the area. We’ve been monitoring the impact on the fauna over the years, and the positive impact measured was amazing. The CO2 sequestration has also been measured, and is now a relevant part of our cash flow. Monoculture plantations are just a huge risk for diseases, mimicking the natural way makes much more sense, and there is plenty of research to prove it! We have learned how to do it the right way over the past 10 years, now we are starting to scale.
What is one current challenge you are working on?
Bruno Mariani: We are looking to raise $25 million from long-term investors such as forest companies in the US and Europe, who are fine to get their money back in 20 years or sell the equity on the secondary market (we think of going public in 10 years). The challenge is: for impact investment programs we are too big and for pension funds we are too small.
Note: This conversation originally took place in October 2019, we revised the interview with Bruno Mariani for this number. The images in this post are from this World Resource Institute article used with permission from the author Bruno Calixto.
Symbiosis Investimentos Profile
The company has five key activities to secure commercial viability and native species for the Atlantic forest:
Facts & Figures
Location: Atlantic Forest (Google maps)
Surface: 81’897 hectares of planted production forests
Carbon: 6’718 tons of CO2 fixed annually with plantations.
Plantation: 1’302’806 planted trees of 55 different species