Whanganui District Council banks close to $13 million in forestry sale

Whanganui District Council began planting on its four forestry blocks in 1979.

The Whanganui District Council has banked close to $13 million with the sale of four forestry blocks finally getting approval from the Overseas Investment Office (OIO).

The forests, Te Ara To Waka, Tauwhare, McNabs and Siceleys, have been purchased by Summit Forests New Zealand Ltd which is a subsidiary of Japanese multi-national Sumitomo Corporation.

The $13 million sale includes the land and tree crops.

The Whanganui council owned 95 per cent of the portfolio with Ruapehu and South Taranaki district councils sharing the rest.

Its share of the money will be put towards paying off debt for the city's new wastewater treatment plant.

The blocks were bought by the councils as an investment in 1978 and planting began a year later.

"The forestry portfolio has been an interesting story which has unfolded over the last 40 or so years with past and present mayors and councillors across our region who have been passionate about the entry into the forestry business in the Whanganui District," council chief executive Kym Fell said.

Radiata pine was planted in anticipation of increased demand for wood within 20 or 30 years and to demonstrate the viability of pine as a crop for the erosion-prone, steep sandy soils found in the district.

"The venture has met its objectives by pioneering big forestry in our region and proved that growing pine was viable in our district," Fell said.

As part of consultation for the council's Long Term Plan in 2015 the community indicated general support for selling council-owned forests.

There was a wait of more than 18 months and several delays in the OIO process after a sale and purchase agreement was signed in December 2016.

Summit Forests has over 42,000ha under management, mainly in Northland, but was looking to establish business activity in the Whanganui region.

"A focus for the company will be to gain certification under the Forest Stewardship Council (FSC) which requires a high standard of environmental and social responsibility when managing forests," Summit Forests general manager Henare Walker said.

"This will be welcome news for domestic processing as there is a strong demand for FSC certified wood in the area."