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Rapid growth of Queensland hardwood timber plantations: economic conditions right for $66.5m long-term investment

Posted by gmarkets on 18 September, 2007

A growing insistence that old growth rainforests be preserved had created a need — and a niche — for plantations that grew and harvested timbers legally to meet the demand, reported The Australian (15/9/2007, p. 7).

Illegal Asian hardwood logging drives expansion: Great Southern Plantations and Integrated Tree Cropping had bought at least 5300ha between them in far north Queensland and the Rewards Group had bought 25 properties there since 2002, bringing its holdings to 3030ha. That worked out at about $66.5 million so far, The Australian said. Answering a question about what had sparked the move north and into these kinds of timbers Rick Carr at Herron Todd White valuers in Cairns said the world’s tropical hardwood timber market was supplied almost entirely from Asia but much of that was of uncertain provenance, and probably logged illegally.

Any suitable land scrutinised by timber companies: Doug Parsonson at Poyry Forestry Industry Consulting, an engineering and consulting company, agreed that the economics were right for these kinds of long-term investments. When companies looked at farms, it was soil type and climate that sparked their interest: appropriate grazing land was equally attractive and tended to come at about the same price, said Jim Cooper, real estate manager at Landmark Tully. Danny Glasson at valuer Herron Todd White in Cairns said the Rewards Group had mainly bought cane farms for between $8000 and $10,000 a hectare of arable land. HTW’s Carr said: “The timber companies are interested in any property that comes up in the region. So long as it has the right rainfall, climate, soil type and is within the price range, they will look very closely at it.” Timber company interest was keeping a floor under land prices throughout the region.

Northern Territory plantations: As well as the holdings in Queensland, Great Southern Plantations and another company, Northern Tropical Timbers, had also created plantations in the Douglas Daly region about two hours south of Darwin in the Northern Territory. The timbers in question were teak, African mahogany and a Papua New Guinean variety, Eucalyptus pellita (red mahogany). All were slow growers, taking between 18 and 20 years to reach harvest.

The Australian, 15/9/2007, p. 7

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