Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATED: Small NZ forest owners targeted

UPDATE: Australian, Chinese-backed company targets small NZ forest owners

(Updates with added comment)

By Paul McBeth

Aug. 21 (BusinessDesk) - United Forestry Group, backed by Australian timber marketer Pentarch and China's Xiangyu Group, is targeting small forest owners in New Zealand in a bid to cash in on a looming 'wall of wood' it estimates will generate $30 billion over the next two decades.

The Wellington-based company wants to consolidate the country's 14,000 small forests, which account for just over a third of New Zealand's plantations, and use its forestry management skills and supply chain to achieve a more efficient network and boost returns for the owners, it said in a statement. Acting managing director Malcolm McComb told a briefing in Wellington the company aims to build a 30,000 hectare plantation, and is initially eyeing trees ready for harvest in the next 10 years.

United Forestry, which counts Pentarch and Xiangyu joint venture Superpen as a cornerstone investor with 60 percent, is offering to buy small forests outright, or buy a combination of land and trees. It will also offer advice on harvesting and marketing mature forests.

Forest owners will also have the ability to take cash and shares in the company, and McComb said the company hopes to grow the number of New Zealand investors by doing so.

"We are taking a whole new approach to this emerging problem, and are committing major resources to be in a position to buy forests outright, control shipping services and consolidate forest output through the country to give the participating small forest owners a strong hand to play with," he said. "We will have the financial strength, expertise and presence in the local and Asia markets to offer them a much more comprehensive range of options."

New Zealand sold $4.04 billion of logs, wood and wood articles to overseas markets in the year ended July 31, up 20 percent from a year earlier, making it the country's third-biggest export commodity. Global log prices have come off the boil in recent months after surging through 2013 on strong demand from China.

United Forestry's move comes as a spike in plantation activity between 1992 and 1998 nears maturity, which will ramp up supply in a bid to meet demand coming from increasingly wealthy Asian nations.

McComb said that small forest owners face higher costs, and "there is a real risk that export earnings from forestry and the return to investors will be very disappointing."

The company will focus its efforts on forest owners in the south of the North Island and north of the South Island, he said.

While it hasn't signed up any owners, McComb said it has "got a few forest owners ready to commit in a foundation group."

Superpen partners Pentarch and Xiangyu have made funding commitments, and McComb said the company would be open to other investment partners further down the track.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news