Pan Pac gathers support after Government announcement on OIO approval

Pan Pac currently owns around 6000ha of land in the Hawke's Bay region and leases around 29,000ha primarily from local iwi. Photo / File

Napier MP Stuart Nash and the Hawke's Bay Regional Council are defending a Government decision to give Japanese-owned Pan Pac Forest Products pre-approval to bypass the Overseas Investment Office and buy Hawke's Bay land for forestry.

Associate Finance Minister David Clark and Land Information Minister Eugenie Sage signed off on the consent back in September.

The decision allows Pan Pac to make 25 transactions involving 20,000ha of land and is valid until 2022. The largest single transaction would potentially be 10,000ha, with the company mainly looking at purchasing around its current sites in Hawke's Bay and Otago.

Nash, formerly Labour's forestry spokesman, said concerns about conversion to forestry have been overstated.

"Farming is not in competition with forestry and many farmers and iwi interests are actually integrating tree planting into existing projects which include a range of activities, like farming, horticulture and pastoral use."

Hawke's Bay Regional Council chief executive James Palmer also backed the announcement saying it allowed for the company to continue building the local economy.

"Pan Pac has made major investments in its Whirinaki mill in recent years and it is important that it is able to make long-term plans for future wood supply," Palmer said.

Hawke's Bay Forestry Group CEO Keith Dolman said the announcement was great to hear as he felt that it gave the company a level playing field with other potential land buyers and help build the region's economy which it has been doing for decades already.

"The standing consent is most certainly a good thing for Hawke's Bay.

"Pan Pac is good for the economy, good for the environment and a major employer and market opportunity for anyone investing locally in wood growing."

Dolman said the track record of its work and investment in the region and country shows its worth.

"It is a vital cog in the regional economy, contributing 5 per cent of the GDP for Hawke's Bay and a major buyer of wood from farm shelterbelts, private woodlots and larger corporate forests.

Stuart Nash backed the move and said that some concerns about conversion to forestry have been overstated. Photo / File

"It has a long track record of investing in New Zealand and are not about stripping our resources for short-term gain."

The deal is for the next three years as the Government seeks foreign forestry money to help meet its tree planting targets.

Hawke's Bay Federated Farmers president Jim Galloway was against the announcement saying there was an unfair bias for forestry investors buying up farmland and transferring it to forestry.

Land Information Minister and Green MP Eugenie Sage defended the decision, saying Pan Pac had been in New Zealand since the 1970s and has been a large exporter of quality timber and needed to secure its wood supply.

The pre-approval was made despite the Green Party having strongly protested land sales to foreigners and Forestry Minister Shane Jones saying he was sympathetic to rural concerns that converting productive farm land to forestry could cost jobs.

Pan Pac managing director Doug Ducker said the company had previously experienced some seller resistance due to delays in finalising deals. Photo / File

Pan Pac managing director Doug Ducker said the company had previously experienced some seller resistance due to delays in finalising deals.

The company currently owns around 6000ha of land in the Hawke's Bay region and leases around 29,000ha primarily from local iwi.

"The Standing Consent takes this condition away and so enables a seller to look at our bid on an equitable basis saving 6-12 months of backlogging the deal."

But he does confirm that it does not mean they will be skipping the process all together.

"It does not mean we are 'free' of the OIO – our consent requires us to meet stringent tests and carries a requirement to advise and validate our applications with OIO following a sale settlement."

Since the announcement Ducker said the company has already had numerous offers of investment.