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Plantation investment challenge continues

The Australian forest and wood products industry continues to grapple with the challenge of creating additional plantation investment mechanisms or structures to enable substantial and sustainable investment in timber plantations, especially long-rotation plantations.

AFPA members have highlighted that the lack of continuing investment in replanting and expanding Australia’s plantation estate is a key issue for the future growth and prosperity of the entire forest, wood and paper products industry.

Benefits of timber plantation investment in Australia include carbon capture, protection and enhancement of soil, water and biodiversity values, development and diversification of regional economies and employment, and sustainably meeting domestic and international demand for wood and paper products.

Recent data collected and collated by the Australian Agribusiness Group (AAG) on funds raised in FY2011 for agricultural Managed Investment Schemes (MIS) highlight the significant decrease in investor confidence resulting in very little funding being directed to the establishment of timber plantations via the MIS mechanism. Results from the survey include: Total cash raised $36m (3.1% of FY2006 results); timber’s share is $22m; 10 investment products on offer; and seven companies offering investment products.

AFPA will continue to explore alternative investment mechanisms and solutions to increasing investment in timber plantations engaging with interested members, stakeholders and the Government.