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Forestry Corp looking to buy Hume Forests

The Forestry Corporation of New South Wales is looking to buy Hume Forests. The Australian Competition and Consumer Commission announced on 3 August that it was making market inquiries about the Forestry Corp’s proposal to buy Hume and is inviting submissions from interested parties with submissions closing on 17 August.  Source: The Australian

Hume, which is overseen by Global Forest Partners, comprises softwood plantations located between the Tumut-Tumbarumba and Bathurst-Oberon regions of NSW.

They comprise about 19,000 of freehold land with a net plantation area of about 14,000 hectares and have been up for sale through Resolute Advisory.

The asset could fetch a price of close to $200m, judging from analyst estimates.

The plantations were inherited by Global Forest Partners from the liquation of Willmott Forests around 2010.

Market experts believe that the state government’s motivation for buying the plantations is likely to be that it has lost its own plantations across about 50,000ha during the NSW bush fires almost two years ago.

It needs to find wood sources to honour take or pay contracts with customers.

These could be groups such as packaging company Visy or timber manufacturer Hyne & Son.

The average age of the plantation is about 10 years, and it is in its second rotation.

Hume is expected to produce steady returns from a harvest of about 80,000 cubic metres per year.