The possible return of tens of thousands of hectares of timber plantation to productive agricultural land across NSW’s high rainfall zones is being welcomed as a potential economic and social boon to bush communities. Source: The Land
Hundreds of hardwood timber plantations, many on former beef holdings, across the North Coast, Southern Tablelands and south-eastern NSW’s high country, most of them left un-thinned for years in the wake of failed managed investment schemes (MIS) are on the market.
Valuation consultants say the total value of forestry properties on the market in Australia as part of failed MIS exceeds $700 million.
The latest estate offering is that of Forest Enterprises Australia (FEA), the main player in the 80,000 hectares of hardwood plantation established between Grafton and the Queensland border from 2002-10 under a collapsed MIS, with receivers Deloitte Restructuring Services and investment bank Gresham overseeing the sale process.
Across the country, FEA’s holdings consist of about 97,000ha of freehold land with hardwood plantations of about 46,200ha, with properties mainly in NSW, Tasmania and Queensland.
That encompasses more than 400 properties and more than 1000 individual titles.
On the North Coast, FEA paid up to $7000/ha for plantable country, which at the time, was selling for $1700/ha.
As beef operations sold and left, small bush towns were hit hard. Stock agents estimated 20,000 breeders were lost to the region as a result of the buy-up.
FEA was placed into voluntary administration in 2010.
Deloitte partner Tim Norman said a significant number of expressions of interest had been received from both retail and institutional buyers since the estate hit the market in December.
“As receivers, we will consider all options for the realisation of the FEA assets,” he said.
“This will include the sale of the assets in one parcel, or separate sales of smaller parcels.”
Community and industry leaders across the North Coast say if a large percentage of the country goes back to beef production, it would put jobs and people back in towns.
Northern Rivers real estate agents said because forestry managers removed all fencing, stockyards and other grazing infrastructure on the North Coast properties they purchased, the land is considered severely degraded from a grazier’s perspective.
They said beef producers would be unlikely to offer more than $480/ha given the costs associated with clearing and returning it to viable grazing country.
There is also a push to see the timber resource realised.
Kyogle Council, where more than 40 FEA properties are for sale, has set up a timber industry reference panel to advise potential buyers of the value of trees on the blocks.
While 60,000ha of the North Coast timber plantation country (owned by a number of companies) is Eucalyptus dunnii, considered only suitable for pulping, about 15,000ha has species such as blackbutt and spotted gum with mill log potential for structural timber.
Kyogle councillor Lindsay Passfield said the fear was a “fire sale” with everything cleared and turned back into grazing country would see a valuable resource lost.
“Council wants to optimise the potential of that timber resource to create jobs and wealth in the region,” he said.
“If prudently managed, the timber plantation industry could have been an enormous economic boost to the region.
“But it became a gold rush to get seedlings in the ground in time to secure the tax concessions and as a result the wrong species were planted in the wrong place at the wrong time very often.”
Chairman of the Northern Co-operative Meat Company at Casino John Seccombe said much of the plantation land was already leased by beef producers who grazed cattle under the trees so the impact to the region’s beef industry may not be as great as would seem at face value.
He said the beef industry could certainly absorb the return of most of the country to grazing and it would only be a boost to communities of the North Coast, many of which are underpinned by beef.
“As landowners, beef and other primary producers were concerned at the rapid take-up of country to forestry plantation companies which were not subject to the same taxes and legislation as their neighbours,” he said.
