KEY POINTS:
Carter Holt Harvey's forests will be replanted as they are harvested by their new owners, ensuring ongoing wood supply for the pulp, paper and saw milling industries.
Graeme Hart this month completed the sale of four former Carter Holt companies, owning 200,000ha of forests, to funds managed by
Hancock Timber Resource Group (HTRG) in the largest forest sale in this country.
That was the bulk of the Carter Holt estate that hadn't already been sold or converted to dairying or lifestyle blocks before Mr Hart's Rank Group bought the forestry giant for $3.3 billion and took it private.
The investors in two funds set up by HTRG for this transaction -- one covering the Carter Holt forests in the North Island and one in the South Island -- include HTRG's Canadian owner Manulife, Australia's Perpetual and UniSuper and undisclosed investors, including some from Europe.
The sale raised a range of issues, including wood supply to whatever business Mr Hart is turning what is left of Carter Holt into, as well as harvesting and replanting strategies affecting hundreds of contractors.
It comes at a time when industry participants are wondering if forests coming on stream in Northland, once dubbed by Carter Holt as a "wall of wood" will be processed.
There are even questions over whether iconic central North Island forests will be replanted long-term, if the industry continues to encounter difficult export markets.
HTRG President Dan Christensen told NZPA that the forests purchased from Carter Holt were likely to be replanted when harvested.
The funds established to buy the Carter Holt forests are open ended, which means they have no set investment period.
The Carter Holt estate has a range of different types of ownership structures but 80 per cent have a perpetual element, which means they can be replanted.
"Anything we have a perpetual right on we intend to fully replant," Mr Christensen said.
"We are buying this as a forest. Most of the land suitable for dairying conversion has already been converted or reserved out."
First investment
The timber management organisation (Timo) made its first investment in New Zealand in 2004 and now oversees a total of 296,000ha of forests in this country, more than anyone else.
HTRG would not comment on whether it has any other acquisitions pending in New Zealand. Timos run each investment separately for groups of investors.
HTRG is not endorsing the theory that Timos will bring processors they have relationships with around the world to New Zealand.
"We are not a processor ourselves. We are a tree grower.
"But we do hope that the industry will continue to grow over time." HTRG will do anything it can to "help that along".
Northland was a case in point. Many forests there are maturing for the first time, providing an opportunity for the processing industry.
"We would like to use our resources to encourage the industry to continue to grow there so they can use up that resource as it matures.
"There is a considerable resource that can support a greater industry than currently exists," Mr Christensen said.
Industry speculation has it that Mr Hart is considering either establishing a large saw mill in Northland or buying an existing one and expanding it.
HTRG admitted to having organised an ongoing relationship with Mr Hart's processing businesses, but they don't know what he is planning.
Maori feedback
HTRG said it has generally had positive feedback from Maori trusts it had had contact with in the past.
There was generally an "alignment of interests" because trusts owning land had a stumpage share component to their participation so they benefited it tree owners increased the value of the resource.
Mr Kny said HTRG currently had no specific plans to change harvest strategy.
"One of the reasons why we were interested in acquiring these particular forests is that they have been well managed," Mr Christensen said.
One of the reasons HTRG was interested in New Zealand was that the science and technology here available to forest growers was world class, he said.
He believed that radiata pine would continue to be the main species grown in New Zealand.
- NZPA
