60 | Promoting sustainable forestry New Zealand harvests between 30 and 35 million tonnes of timber each year. T T from page 58 Roger Dickie Forestry FORESTRY “We’re now able to establish a regular return profile for our investors, generated through the storage of emissions and sale of accumulated carbon credits, all the while remaining laser- focused on delivering favourable returns from timber harvesting as well. Our focus is very much on creating sustainable returns.” Jeff says savvy investors are pivoting to make a larger place for forestry in their portfolios. Adding to the momentum is a rising demand for sustainable wood products and New Zealand’s proximity to key markets. RDNZ is currently harvesting around 1.5 million tonnes of timber annually, supplying both domestic and export markets, including China and fast-growing India. “New Zealand harvests between 30 and 35 million tonnes of timber each year. While we may not be the biggest out there, we are a significant player in the industry. We remain focused as much as we can on the domestic market, but we are primarily exporters to the global market.” Statistics from the World Bank indicate that global timber consumption is expected to quadruple between 2020 and 2050. Simultaneously, global deforestation continues to be a major issue, with approximately 10 million hectares of forests lost annually, driven largely by agricultural expansion and other shortterm economic interests, putting the world off track on climate change. As a country with excellent forestry credentials, New Zealand is well-positioned to capitalise on the projected imbalance between timber supply and demand. RDNZ is an experienced specialist in sourcing, establishing and managing forestry assets, and offers a range of forestry investment options for retail and wholesale investors, as well as whole-asset ownership for private and institutional investors. “We currently manage $1.9 billion in forestry assets, with approximately 35% being retail investment and the rest in private investment for high-net-worth investors and institutional clients. More recently, we have seen a significant uptick from sophisticated offshore capital looking to deploy investment in New Zealand forestry, due to the tailwinds the sector has – it’s a big growth area.” Kiwi investors looking to participate and benefit from carbon and production forestry can buy into RDNZ’s flagship Awatea Forest Fund with a minimum investment of $20,000. Now in its third year, this fund currently has a diversified forest area of 2321 hectares, working towards a target area of 5000 hectares. Revenue for the fund is generated from the sale of carbon credits and timber harvesting, with a focus on delivering annual distributions to investors. With seven forest properties spread across four regions – Bay of Plenty, East Coast (Gisborne), Hawke’s Bay and Wairarapa – the fund is geographically well spread. It also encompasses a diversity of tree species – radiata, native trees and redwoods – spanning various age classes. “We will make our first cash distribution from the sale of carbon this year, and expect that to be an initial cash yield of 5% of the unit valuation. This will mark the first of regular forecast annual distributions, doing that from carbon in the first instance, then also from sustainable harvest,” says Jeff. “Based on the current forecasts for carbon, we expect the cash yield to increase to more than 10% (per annum) over the next five years as the growth of the forests accelerate.” As its forest estate continues to grow and evolve, Roger Dickie New Zealand is taking care to evaluate climate change and its potential impacts. Future-proofing is implicit in its selection of areas where forests can thrive. “Harvesting practices are ultimately changing too so as to have less risk of environmental impact, in line with national environmental standards coming through.” RDNZ presents a positive outlook for forestry sector and forestry investments in New Zealand. “We are backing our words with action and have taken a long-term cornerstone investment in the Awatea Forest Fund, aligning our interests with those of our investors.” Commercial | Agricultural Transport | Recreation ROGER DICKIE FORESTRY WHANGANUI IS PROUD TO SUPPORT Moore Markhams Whanganui is part of a global network of offices, providing accounting and advisory services, advising local, national and international clients in the public and private sectors. (0)6 349 0888 wg@markhams.co.nz markhams.co.nz Whanganui (0)6 346 7070 wav@markhams.co.nz markhams.co.nz Waverley Accountants and Advisors Roger Dickie Forestry
RkJQdWJsaXNoZXIy NDc2Mzg=