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

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news