Comparing Australasia to Latin America forestry investments
Bob Flynn, Director International Timber with RISI spoke at both events and looked at the two leading South American forestry countries, Brazil and Chile, and the impact both have on competition in the market place for forest products and for investment capital. Brazil and Chile dominate the forest industry in Latin America, accounting for 54 % and 17% of the total planted forest resource in the region. In 2010, Brazil and Chile accounted for 67% of wood products exports, 44% of paper exports and 90% of pulp exports from Latin America. Combined, both South American countries have more pine plantations than New Zealand or Australia, and growth rates are higher. An interesting trend is the amount of forests in both Brazil and Chile that have been certified. Both countries have more than double the area of FSC-certified plantations as New Zealand or Australia. Brazil has more FSC certified forest than the rest of Latin America combined. In addition, Chile has 1.9 million ha of PEFC certified forest with Brazil having 1.3 million ha. For investment, foreign ownership of plantation forests in Latin America has not changed in the last few years, and amounts to only 14% of total plantation area (compared to over 50% in Australia/NZ). In RISI’s 2012 Global Tree Farm Economics Review, they examined 104 case studies of possible investments, representing 30 species in 35 countries. Both New Zealand (3rd in Timberland Investment Attractiveness ranking) and Australia (4th) tended to score much higher than either Brazil (8th) or Chile (6th) in international benchmark ratings, and have been more attractive for international timberland investors as well. This trend is picked up in the institutional ownership figures from 2011. Despite attractive growth rates and relatively high potential returns in Latin America, ownership of timberlands in New Zealand and Australia by institutional investors is 1.5 times greater than all of Latin America and this is expected to continue in 2012. Detailed analyses of some of the global investment trends and future outlook for investors and forestry companies in this part of the world was given by key local and international presenters at this latest Forestry Finance series. Delegates from Auckland and Sydney will be able shortly to download all presentations, where presenter approval has been given, from the event website. | ||
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