Exports from Amazonia

By Carole Buia

His workday sometimes finds John Forgach draped in mosquito netting, paddling the backwaters of the Amazon in a dugout canoe. He's on the hunt--for a new investment. Forgach, 52, spent decades making money the old-fashioned way, as an investment banker in places like Geneva and New York City. Now he is back in his native Brazil to show that preserving the environment and indigenous cultures can be profitable. As CEO of a Sao Paulo-based private company called A2R Environmental Funds, Forgach raises money from institutions like the Swiss government and the World Bank Group and invests mainly in sustainable agriculture and food processing in Latin America, including the Amazon. If you've bought organic raspberries under General Mills' Cascadian Farm label or ordered hearts of palm in a European restaurant during the past year, you've probably done business with A2R.

Forgach's signature deal--the result of one of his jungle-scouting expeditions--was the 1999 purchase of a $1.5 million majority stake in Muana Alimentos, located on the remote Amazon island of Marajo. Muana cultivates acaizeiro palms and packages and sells the palms' hearts (prized for gourmet salads) and their purple acai fruit (used in Howler's organic Rainforest Sorbet). In an industry in which exploitation of the environment and workers is the norm, Muana stood out by refusing to employ children. It paid its workers and suppliers at least 28% above the $78-a-month minimum wage. And it harvested the hearts and fruit of the acaizeiro in a way that sustained the plants and their surroundings. But the company was drowning in debt, headed for bankruptcy. Forgach restructured the debt and scaled down a top-heavy management team. Today, with bank loans paid off, Muana Alimentos is the second largest supplier of organic palm hearts in Brazil and profitably exports its product to Europe.

Forgach did the Muana deal for Sao Paulo's Banco Axial as part of an assignment to find undervalued companies that were helping preserve the environment. In June 2000 he bought out the bank's "green" investment division and partnered with a Boston-based investment firm, GMO Renewable Resources, whose capital comes mainly from private institutions. Together, they launched A2R and continued to work on both the business health of Muana and the well-being of its workers. "If you want to help the environment and reduce the risk for investors," says Forgach, "you must alleviate poverty in the region by educating the workers and generating local wealth." Muana turned over portions of its land to residents who had never before held land titles. A company-created nonprofit group worked with the Brazilian government to bring in doctors to vaccinate Muanenses for diseases like yellow fever, and donated a boat to take children to and from school. Last month the nonprofit group opened the Amazon's first computer school.

Born in Brazil and educated at Harvard, Forgach was an investment banker and an oil trader in the U.S. and Europe. He also bred Latin American macaws--a pursuit that grew into a Swiss organization that protects endangered tropical birds. In 1995 he returned to Brazil and founded an organization that returns illegally confiscated animals, like macaws and yellow-throated crocodiles, to their natural habitats. While in search of a private forest preserve to relocate a pack of primates, Forgach learned that many preserves in the Amazon were going bankrupt because of poor management. That took him to Banco Axial. "I went from thinking like an environmental romantic to an environmental pragmatic," says Forgach.

Altogether, A2R has invested about $100 million in its first year of operation, and expects to invest $400 million more by 2006. The A2R fund that invested in the Muana hearts-of-palm operation aims to generate a 20% annual return over its 10-year life span. Most of its portfolio is in organic foods, now a global industry with $20 billion in annual sales. "When I began A2R, I never imagined the impact it would have on people," says Forgach. "My office is filled with photos of smiling kids." And so far, his investors are smiling too.

To learn more about Forgach or investing in the Amazon, visit our website at time.com/global