TFS Sandalwood
Tropical Forestry Services (TFS), one of Australia’s largest forestry companies, has announced a full year after-tax profit of $113 million, courtesy of the falling currency. Source: ABC Rural
TFS owns a number of Indian sandalwood plantations in the Northern Territory, Ord Valley in Western Australia and Burdekin region of Queensland, and has also secured further investment from the United Kingdom.
The company harvested 30 tonne of heartwood in Kununurra this year, which was processed in Albany. The company expects to harvest 300 tonne next year.
Chief executive officer Frank Wilson said the positive financial results, a profit increase of $30 million, were better than expected and largely due to the drop in the Australian dollar.
“We had quite a lot of confidence that we would deliver a good result,” he said.
“Because we sell in US dollars and our biological asset is valued in US dollars, it helps a lot when the Australian dollar depreciates.
“Sandalwood prices have risen… together with the fact that we’re selling more sandalwood, all lead to that improved result.”
An endowment fund for the Church of England is continuing to strike deals with the company, making another sizeable investment of 200 additional hectares in the Northern Territory.
Mr Wilson said it’s the fourth investment from the church commissioners and it shows confidence in the sector.
“It’s a good sign of confidence from the commissioners both in TFS itself and the sandalwood market,” he said.
“Obviously the investment in new plantations is really looking forward to what they see the long term market dynamics to be.”
Oil distillation plant for north Australia TFS Corporation is still looking for a possible site to build an oil distillation plant in the Top End to process the timber from its plantations.
Currently the company has been sending its wood south to a distillery plant at Albany in Western Australia. However, with a tenfold increase in volume expected to be produced next year, the company is actively searching for a location to host the new plant.
Mr Wilson said a processing plant will be required in the north to complement their Albany facility.
“We’re currently in the process of ascertaining the appropriate site or sites in northern Australia for another distillation plant,” he said.
After announcing the intention to purchase Bonalbo Station in the Douglas Daly in December 2013, Mr Wilson has confirmed the sale has fallen through.
A delay in securing a water licence for the property was the predominant reason the purchase did not proceed.
Mr Wilson would not be drawn on whether the company has bought part of Stylo Station near Mataranka, but did suggest there were more land acquisitions to come.
“We’re under confidentiality in relation to negotiations we have with people, and I can’t comment whether we are or aren’t on that one,” he said.
