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Global Fund Manager Buys into Wenita Forest Products

Posted on: Wednesday, 6 July 2005, 15:00 CDT

OTAGO forest owner Wenita Forest Products has a new 38 per cent shareholder -- a fund managed by GMO Renewable Resources, a global manager of forest investments that has been active in New Zealand.

GMO, which has an office in Rotorua, managed the purchase of the Kaingaroa and surrounding forests for Harvard University's endowment fund and manages other forest investments in New Zealand.

This investment, GMO's first significant purchase in Otago, establishes a partnership with Wenita's other shareholder, China National Foreign Trade Transportation Corporation, a conglomerate known as Sinotrans.

The forests come with a sawmill. Generally timber management organisations, known as Timos, invest only in forests.

Wenita, which bought forests from the Government from 1990 and planted and purchased others, owns the Rosebank sawmill in Balclutha, which employs 48 people.

The mill processed about 60,000 tonnes of pruned logs a year. This timber is appearance grade and is sold domestically and exported to the North American market.

Wenita chief executive Rodger Hancock said management of the company would not change with the change in shareholder. "It's business as usual," he said.

GMO's fund bought the stake from another group of North America investors which used Xylem as a manager and then Global Forest Partners, another Timo that has been active in New Zealand.

"We're delighted to have made an acquisition in the South Island and to be in business with a large and successful Chinese company," said Ian Jolly, a GMO director.

Wenita owns forests with a gross area of 30,000 hectares, including the Berwick Forest, Mt Allan Forest and coastal forests. The forests are 96 per cent radiata. The transaction value was not disclosed.

Mr Jolly said GMO was interested in making further investments in New Zealand.

The Timos are thought to be no longer in the running in a sale of Carter Holt Harvey's non-core forests.

Timos bought much of Fletcher Challenge's estate when it was sold.

Evergreen Forests is also investigating options for its forests.

Timos to have invested in New Zealand include Hancock Timber Resources, Prudential Forest Partners, GMO and GFP.

Source: Dominion Post

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