forest talk
Fletcher Building invests in wood sector FLETCHER BUILDING HAS CONFIRMED TWO STRATEGIC investments in the wood sector. It will proceed with building a new wood panels plant at its current Laminex site in Taupo with a capital cost of some $275 million. The investment involves building a new wood panel production and processing line to serve the New Zealand market and export markets. The new process will supersede the current particleboard production line by producing cost-competitive products that have diverse applications in furniture, joinery and the broader construction sector. All appropriate consents for this project have been granted and initial civil works will commence in early 2023. The project is expected to take around two-and-a-half years to complete, with FY26 expected to be the first year of operations. After a ramp-up period, the investment is expected to generate mid-cycle EBIT of approximately $40 million and return on funds employed at or above 15%. In addition, Fletcher Building has agreed to acquire Waipapa Pine and Renewable Wood Fuels (together, “Waipapa”) for a some $97 million (including land and buildings but excluding earn out). Waipapa produces a range of sawn timber products, including
industrial and structural grades, and includes a renewable fuels business. It is geographically advantaged by being in Kerikeri (sawmill) and Whangarei (timber treatment plant), close to the supply of high-quality logs. Fletcher Building intends to continue to expand production capability to strengthen Waipapa’s ability to support the market. Waipapa forecasts revenue of $50 million and EBIT of $14.5 million for the 12 months ended 31 December 2022. It is expected to generate mid-cycle EBIT earnings of over $20 million and ROFE greater than 15% within two years of Fletcher Building ownership. The acquisition, conditional on Overseas Investment Office approval, will be completed in the final quarter of FY23. Fletcher Building’s Chief Executive, Ross Taylor, says: “Together, these investments represent our first major expansion steps in the wood products sector and nicely complement our already strong positions in Steel and Concrete. Wood products is a highly attractive sector with significant growth opportunities, giving both these investments a favourable long-term position. In addition, increased utilisation of wood resources fits within New Zealand’s broader sustainability goals through carbon storage and contributing to our international climate change targets.” NZL
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Government drags its feet on Māori foresters ONE IN FOUR HECTARES OF farmland operated by Māori is now in forestry, making forest interests one of the most significant economic and environmental issues for Tangata Whenua. A group of Māori forestry specialists met recently in Rotorua to develop the forestry practice which will be key to unlocking more than $16 billion in value for the Māori economy. The group, brought together by Te Taumata (Māori Forestry Landowners) and funded exclusively by Māori forestry interests, is working to establish a best-practice model for permanent transitional forest management. Te Taumata Chair, Chris Karamea Insley, says, despite promising to act in partnership with Māori in a hui led by the late Sir Dr Toby Curtis on the development of the best practice model, the Government 10 NZ LOGGER | February 2023
has been dragging its feet. Mr Insley says despite reaching an agreement with Ministers Stuart Nash and James Shaw at the specially convened hui in Wellington in June last year to establish and fund a technical working group in partnership, the Government has since stonewalled any attempts to make progress. “In the end, Māori have decided this is far too important an issue to play political games, and we have convened and funded our own group to undertake this work for the benefit of Māori,” he says. “As a result of colonialism, confiscations and the land made available in treaty settlements, Māori also own some of the poorest land in the country – with 20% covered in bush and scrub, compared to 8% on the average New Zealand farm,” he adds.
“However, this land is more suitable for the needs of transitional forestry, which generally targets property in Land Use Class 6 and above. It is estimated that Māori have between 700,000 and 1,200,000 ha of land suitable for transitional forestry. “We owe it to the late Sir Dr Toby Curtis and indeed our mokopuna to take action for the good of Māori and the benefit of all Aotearoa. We look forward to this technical working group being the first stage of an indigenous-led movement for self-determined climate action.” NZL
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