New Forests now manages more than 525,000 haFriday 20 Nov 2015 In regional Australia, forestry industry leader David Brand is playing a key role in rebuilding the shattered sector and bringing battered timber regions back to life. Through New Forests, the company he founded in 2005, he and his team manage more than 525,000ha of land, including 330,000ha of forests – 45,000ha in South Australia, 150,000ha in Tasmania, 55,000ha in Western Australia and 80,000ha in Victoria.David Brand emerged in a pivotal role in the industry when he started New Forests, seeing an opportunity to capitalise on a wave of overseas institutional capital seeking to provide a good, long-term home for high-returning hard assets such as forestry and agriculture. Since then he has quietly built the company from AU$50 million under management in its first year to more than AU$2.75 billion under management and a place as one of the world’s 10 largest forestry investment companies. Along the way he has navigated the downfall of the management investment scheme sector and the global financial crisis to develop Australia’s largest forestry investment manager. New Forests has played an important role in redeveloping distressed assets sold as a result of the forestry disasters stemming from failed managed investment scheme investments, including Gunns and Great Southern. Mr Brand said institutional investment funds managed by New Forests have recapitalised the industry, while lifting productivity, cutting costs, improving competitiveness, developing markets and boosting its potential to invest in commercial opportunities. “We were fortunate after the GFC that there was a large shift into hard assets such as timber, agriculture, property and infrastructure with trillions of dollars shifting into those types of investment vehicles,” Mr Brand said. He correctly foresaw the shift when much of the forestry industry was owned by state governments and managed investment scheme operations to today when 60 per cent is owned by institutional investors. He expects it will reach 75-80 per cent within another five years. “The benefit of that transition is the industry has been recapitalised and through a longer term focus, operates on the basis of economic fundamentals,” he said. “We’ve been fortunate in being the only major Australian-based investor in the forestry sector and we’ve developed the scale required to be successful.” Rebranding a splintered industry Mr Brand said New Forests had produced a return on investment in the low to mid-teens each year and he suggested the firm may look at other processing opportunities through Timberlink Australia, a leading national timber business established by New Forests in 2013, if the markets are right. Timberlink has high-quality sawmills that manufacture plantation pine products at Tarpeena in the South-East and Bell Bay in Tasmania. It also owns a third mill at Blenheim in the South Island of New Zealand. Timberlink has invested AU$20 million in developing the Tarpeena mill, including AU$8 million from the State Government, giving it the ability to process 600,000 tonnes of logs a year. New Forests also established Forico in 2014, comprising the old Gunns Tasmanian forestry estate of 175,000ha and affiliated nursery, two woodchip mills and a wood fibre technology laboratory. Mr Brand said there was plenty of further room for expansion, in timber processing and bioenergy, if the opportunity was right, and as the NSW, Western Australian and Tasmanian governments contemplated selling forestry assets in the next few years. Source: Advertiser |
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