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.

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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.


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.


Biokerosene from Hybrid Tobacco!

An initiative by Boeing and South African Airways (SAA) to develop a renewable jet fuel sector in South Africa has announced it is to collaborate with SkyNRG on a project to produce jet biofuel from a new energy-rich, nicotine-free hybrid tobacco crop. The crop, known as Solaris, has been developed by Italian company Sunchem and test farming is already underway.

SkyNRG has teamed with Sunchem to scale up production and both Boeing and SAA will provide active support in securing further project financing and offtake agreements. The partners believe biofuel production from large, and small farms, can be expected within the next few years with oil from the plant’s seeds initially being converted into jet fuel.

Boeing and SAA are working with the Roundtable on Sustainable Biomaterials (RSB) to help farmers with small plots of land to grow biofuel feedstocks that provide socio-economic value without harming food supplies, fresh water or land use.

Southern Africa has long been associated tobacco crops and it is an important income source for many farmers in the region, despite declining global production.

SkyNRG claims the Solaris feedstock can help to significantly reduce cost price levels towards fossil parity and has the potential to reduce 80% of CO2 emissions compared to fossil kerosene. In addition to producing vegetable oil, Solaris can also be used to generate valuable animal proteins and biomass for rural electrification purposes, says the Amsterdam-based world market provider of sustainable jet fuel.

August 21, 2014

Roland A. Jansen


Innovative Heating Project in Holland

The city of Rotterdam together with the ING bank, the utilities Eneco, E.On, Ministry of Economic Affairs, province of South Holland and the largest waste converting utility AVR have launched the “Heating Roundabout Project” which should be realised by 2020.

Heat, produced by industrial companies in the Port of Rotterdam, such as chemical companies and oil refineries, will be used in future to heat water and pump it in a gigantic “roundabout” in the province of South Holland to heat 350,000 houses and 1,000 hectares of greenhouses, used for cultivating vegetables and flowers. Holland has the largest flower cultivation industry in the world.

Total costs for the project are Euro 4.3 billion and the benefits are Euro 6.3 billion. The net result will be that 15% of all heating used in the province will come from clean renewable energy with an important reduction in CO2 emissions.

This project is unique in the world. Cities like The Hague, Delft, Leiden and Rotterdam will profit from the “Roundabout” as well as the local flower cultivation businesses as their energy costs will be reduced substantially. At present the majority of greenhouses are heated with energy from gas, which is four times more expensive in Europe than in the USA.

Roland A. Jansen

Roland A Jansen is CEO of Biomass Partners Ltd and a Non Executive Director of Green Investment Solutions, an ethical Forestry Investment Company. For further information please visit: