Forestry: See the money for the trees

This piece has an US slant but shows the growing awareness of the value of investing in forestry.

Money doesn’t grow on trees, but this could be missing the point. As some institutional investors have found, the trees themselves are valuable. And they tend to become more valuable over time as they increase in height and volume, making their lumber suitable for a wider array of purposes.

Read more here: http://realestate.ipe.com/infrastructure/forestry-see-the-money-for-the-trees/10007051.article

Advertisements

Investing and Divesting for the Climate

Investors are starting to change their tactics to only invest in sustainable businesses that actively work to reduce their contributions to climate change. Could this be the vanguard for a shift in investment approaches that drives environmentally unfriendly companies to review their business models in order to survive..?

Full article: http://www.huffingtonpost.com/renat-heuberger/investing-and-divesting-f_b_6660522.html

 

Booming demand for timber fuels surge in profits at Scottish Woodlands

SCOTTISH Woodlands has highlighted the importance of the forestry sector in Scotland after it achieved record trading results amid strong sales of timber.

The company, which manages forests for owners ranging from individuals to local authorities, increased pre-tax profits by around 80 per cent annually, to £1.1 million in the year to September.

Scottish Woodlands harvested more than a million tonnes of timber during the year, when sales surged by around 15 per cent annually, to £74m.

The employee-owned company said the growth reflected strong demand for domestically grown timber in the UK.

Scottish Woodlands’ customer list includes sawmills, fencing producers, paper mills and biomass energy firms.

The company noted the growth was also driven by strong interest in woodlands among investors.

It said new woodland creation and re-stocking following harvesting led to stable demand for forest management services.

Managing director Colin Mann said the company’s growth demonstrated the importance of the forestry industry to Scotland.

“The forestry and wood sector in Scotland is delivering a powerful combination of sustainable economic growth and significant environmental benefits,” said Mr Mann.

Economists have estimated the industry supports 40,000 jobs in Scotland.

The monthly average number of employees at Scottish Woodlands was 141 in the latest year.

Scottish Woodlands has 13 offices in Scotland, from Strathpeffer in the Highlands to Castle Douglas in the south west.

Mr Mann said the firm’s success was based on the bedrock of the involvement of employee owners. Scottish Woodlands is 80 per cent employee owned, with the remainder held by sawmiller James Jones & Sons.

Source: http://www.heraldscotland.com/business/company-news/booming-demand-for-timber-fuels-surge-in-profits-at-scottish-woodlands.118325555

AXA Invests in Forestry because it is a ‘safe-haven investment’, with ‘resilience to crisis’.

AXA Real Estate has made its first foreign forest acquisition, buying three estates in Finland.

The investment manager paid €11.2m ($12.5m) for the assets, which cover 3,700 hectares.

The estates were bought for AXA Insurance from forestry company UPM, which will maintain its role as asset manager.

Christophe Lebrun, head of forest investment, said investor appetite for alternative asset classes had seen a “marked increase in recent years”, with demand for strong and sustainable returns.

“As a sector, forestry is underpinned by robust economic fundamentals,” he said.

The sector was, he added, a “safe-haven investment”, with “resilience to crisis”.

AXA said that, as part of its alternatives investment strategy, it was looking to grow its forestry portfolio for clients, targeting Western Europe and the Nordics.

The move into Finland by AXA Real Estate is, it said, part of a strategy to diversify into countries where forestry-related industries account for a significant proportion of GDP.

AXA Real Estate’s forestry assets under management total around €100m, comprising more than 17,600 hectares.

Globally, the 1.2bn hectare timber market is worth an estimated €600bn, the investment manager said.

Source: http://realestate.ipe.com/news/investors/axa-real-estate-sees-through-the-trees/10006880.article

Tobacco farming is brisk business in Zimbabwe.

Whilst most of Zimbabwe’s agricultural industry remains in crisis, tobacco plantations are flourishing. Zimbabwe’s rose and horticulture export business, formerly worth $87 million a year, has largely disappeared and corn, once an export crop for Zimbabwe, now needs to be imported, with 97,000 tons bought from South Africa since the beginning of May.

However the exception to this agricultural decline is tobacco.

According to the Zimbabwe Tobacco Association, in 2000 Zimbabwe produced 236 million kilograms of tobacco. During the turbulence of the farm takeovers in 2008, tobacco production plunged to 48.3 million kilograms. In 2014 it is making a strong comeback with this year’s crop of 166.7 million kilograms earning about $612 million.

The recovery of the tobacco industry has provided a boon for the new growers of this crop; mostly black, newly resettled farmers who have stepped into an industry that was once the preserve of the country’s 4,500 white commercial farmers.

According to the government’s Tobacco Industry Marketing Board, 65% of this crop was grown by 110,000 small-scale farmers, of which 39.5% are women. Women in Zimbabwe are fast becoming tobacco tycoons, holding their heads high in the midst of male tobacco farmers, who traditionally dominated this field.

With regard to the crop itself, Chinese buyers acquired $197 million worth of tobacco while Belgium bought $102 million.

August 21, 2014
Roland A. Jansen