FRA Claims Timbergrow Limited Purchase Could Be Good for Sustainability
Seattle, WA, August 03, 2011 -- A Malaysian forestry firm has bought a large portion of forest land in New Zealand, which could boost sustainable forestry in the region, according to Forestry Research Associates (FRA).
The New Zealand Overseas Investment Office has allowed Timbergrow Limited, the Malaysian-owned firm that also owns Ernslaw One, to buy an additional 10,367 hectares of land on the East Coast of the country.
The firms will take control of the land in the West Ho forest and the Merriwa Forest in Hawke’s Bay.
FRA, a research and analysis consultancy, supports the purchase despite some opposition to the fact that the Tiong Family, which owns Timbergrow, is now the region’s largest forest owner, with a total of 41,000 hectares.
FRA’s analysis partner, Peter Collins, said, “Although some are concerned about the large amount of forest land the family now owns, they operate to sustainable forestry standards and are planning to take on an additional 30-40 workers from the local area.” When operated sustainably, the new forest land acquired recently will have an annual harvest of around 250,000 cubic metres.
The news of the deal comes as the amount of timber exported rises in response to greater demand from India and China. Matt Todd, the company’s chief executive, said, “We think the sustainable harvest in this region is between 3.4 million and four million tonnes a year.”
FRA also supports the family’s plan to process the wood in New Zealand in the long-term despite the fact that processing costs overseas tend to be much cheaper, particularly as the use of timber increases in emerging markets in Asia. Storage reportedly used to be an issue, but Mr Todd explained that they now have premises in Matawhero, which could be extended if it was needed.
FRA supports cross-border investment in sustainable forestry through firms like Greenwood Management and Elevation Resources, which manage sustainable forestry projects in emerging economies that also generate healthy returns on investment.
A Malaysian forestry firm has bought a large portion of forest land in New Zealand, which could boost sustainable forestry in the region, according to Forestry Research Associates (FRA).