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Timberland Investment
Timber Industry | Deals & Transactions | Investment Rationale | Financial Performance | Investors | Asset Managers
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Sino-Forest Unit Greenheart Receives Buyout Offer From Emerald

Sino-Forest Unit Greenheart Receives Buyout Offer From Emerald | Timberland Investment | Scoop.it

Greenheart Group (94), a unit of Sino- Forest Corp., received a HK$165 million ($21 million) offer from Emerald Plantation Group Ltd. for the shares it doesn’t own in the lumber supplier.


Emerald Plantation offered 58 Hong Kong cents a share to buy Greenheart stock it doesn’t already own, it said in a filing to the Hong Kong stock exchange.


Bourse rules require companies that gain control of more than 30 percent of another company’s shares to bid for the remaining stake. Emerald Plantation owns about 64 percent of Greenheart at present.

Greenheart shares rose 4.7 percent to 67 Hong Kong cents at the close. The buyout offer values the entire company at HK$452 million.

Sino-Forest was accused in June 2011 by short seller Carson Block of exaggerating its revenue.

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Timber REITs Crush 2012 Estimates And Look To Do The Same In 2013

Timber REITs Crush 2012 Estimates And Look To Do The Same In 2013 | Timberland Investment | Scoop.it

In reference to his company's results, Daniel Fulton, CEO of Weyerhauser (WY), said: "This year is a bit of an anomaly. We're seeing prices moving up in every single market for similar-type products.


All 4 timber REITS beat analyst consensus estimates for both 4Q12 and FY12.


The various factors which led to their success in 2012 are detailed in each of their earnings press releases, but I am more interested in what they can accomplish in 2013. We will begin by examining 4 catalysts, then discuss which companies are best positioned to take advantage.

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China's Insatiable Demand For Timber Destroys Cambodia's Forests

China's Insatiable Demand For Timber Destroys Cambodia's Forests | Timberland Investment | Scoop.it
Cambodia's forests are being destroyed at a dizzying pace, with much of the wood destined for China. Much of the logging is carried out illegally — and people who get in the way of the loggers face violence and in some cases death.
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Income Tax on Timber: Free Webinar

Income Tax on Timber: Free Webinar | Timberland Investment | Scoop.it

On Feb. 13, from noon – 1:30 p.m. Eastern, USDA Natural Resources Conservation Service and its partnering land-grant universities will host a free webinar on 2012 tax return filing for woodland owners, foresters, loggers, tax preparers and land managers will be held. Presenters include Dr. Linda Wang, a tax specialist with the U.S. Forest Service and Dr. John Greene, retired research forester with the U.S. Forest Service.


Topics include tax reporting on timber transactions as well as the latest sweeping tax law changes from the “fiscal cliff” package.

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Forestry sector awaits biofuel report

Forestry sector awaits biofuel report | Timberland Investment | Scoop.it

Crown-owned forest researcher Scion is set to present a report into the viability of generating biofuels from trees at the end of next month, a move that could throw a much-needed financial lifeline to the struggling sector.


Converting tree waste into biofuels and bioplastics has long been a Holy Grail for the forestry and wood-processing industry. It could turn pulp wood and sawmill waste into real revenue streams.


But while the technology has been proven in the lab, questions remain over the long-term commercial viability despite extensive research by forestry-dependent countries such as Canada and Sweden.

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N.C. State to sell 80,000 acre Hofmann Forest; alumni opposed

N.C. State to sell 80,000 acre Hofmann Forest; alumni opposed | Timberland Investment | Scoop.it

The 80,000 acres of woodland in Onslow and Jones counties is valued at $117 million, said Mary Watzin, dean of the College of Natural Resources at the university in Raleigh.

The sale has found resistance among alumni, according to a letter to Watzin from Andrew Bailey, a graduate of the school and now a professional forester. He said he was disappointed and concerned by the possibility.

The Natural Resources Foundation unanimously recommended the sale of the forest in its entirety at a meeting earlier this month. A buyer would have to agree to retain the name of the property and allow access to faculty and students for teaching and research purposes.


“The goal is to sell the property as a working forest,” said Brenda Brickhouse, the foundation’s president.

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The forest provides an average net income to the college of $1.5 to 2 million a year. The rate of return is relatively low compared to what a diversified investment portfolio would bring in, Brickhouse said.

Even if those figures were to double, it would still be much less than profits from a portfolio, she said, adding that the current rate of return isn’t likely to change given current timber and pulp markets.

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Bailey said he is concerned by the comparison of the forest to a financial portfolio since investment values change.

“There will be times in the future when the revenue streams from the forest trump a diversified portfolio,” he said. “Forest ownership is, and always has been, a long-term investment.”


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Plum Creek-Drax Ink Long-Term Deal

Plum Creek-Drax Ink Long-Term Deal | Timberland Investment | Scoop.it

Plum Creek Timber Company, Inc. , ( PCL ) penned a long-term fiber supply deal with Drax, a power company in the U.K. As per the deal, up to 770,000 tons of sustainably-managed wood fiber would be supplied by Plum Creek annually during the 10-year contract tenure to two U.S. pellet manufacturing sites. 

Drax, which is currently focused on being a major biomass-fueled power generator, intends to build two pellet mills in Mississippi and Louisiana. The mills would helpconvert wood fiber into pellets, which in turn would be exported to the company's U.K. based power stations. The deliveries are expected to commence in 2014. 

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Rayonier Selling Wood Products Division for $80 Million (RYN)

Rayonier Selling Wood Products Division for $80 Million (RYN) | Timberland Investment | Scoop.it

On Tuesday, real estate and timberland management company Rayonier (NYSE: RYNannounced it is selling one of its four operating divisions, its wood products division, to Vancouver, Canada-based International Forest Products Limited (Interfor). Hereafter, says Rayonier, its manufacturing operations will focus more intensively on specialty chemicals.


The wood products division consists of three lumber mills in Georgia with a combined annual capacity of 360 million board feet of southern pine dimension lumber. They generate about $10 million in annual operating income. The sale, priced at $80 million, is expected to net Florida-based Rayonier a $40 million profit after taxes. As part of the deal, which is structured as an assets sale, Interfor has agreed to hire all 260 employees of the wood products division.

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Canadian Regulator Extends Sino-Forest's Trading Ban Again

Canadian Regulator Extends Sino-Forest's Trading Ban Again | Timberland Investment | Scoop.it

The Ontario Securities Commission announced Tuesday the extension of the trading ban on Sino-Forest Corp. 's(SNOFF) securities until the regulator's fraud allegations against the timber company are settled.


The OSC first introduced the ban in August 2011, alleging the Canada-based company, whose assets are mainly in China, and five of its former executives fraudulently exaggerated the value of the company's timber assets. Sino-Forest conducted an internal investigation into the allegations, but executives have denied fraud.


In the wake of the allegations and trading ban, Sino-Forest in March 2012 sought bankruptcy protection to restructure, and that court process is largely set to end sometime this week.


In an statement issued Tuesday, the OSC said the trading ban was extended "until the final disposition of the matter related to the statement of allegations, including, if appropriate, any final determination with respect to sanctions and costs."

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Brazil squeezed in 2012

Brazil squeezed in 2012 | Timberland Investment | Scoop.it

Pine plywood was the only product where the Brazilian timber industry achieved an increase in exports last year as the sector saw its overseas earnings fall overall by 1.4%.


According to the latest International Tropical Timber Organisation (ITTO) statistics, in total, Brazil's timber exports were worth US$2.36bn, against US$2.39bn in 2011.


Pine plywood exports rose 14.5% to hit US$372m (a jump in volume from 865,600m3 to 983,900m3). But this was offset by falls in pine sawnwood from US$170m to US$158m, tropical sawnwood from US$238m to US$194m, and tropical plywood from US$46m to US$36m. The latter represented a volume fall from 75,000m3 to 58,000m3.


Para state remains one of Brazil's biggest tropical timber producing and exporting states, but in 2012 it saw its share of the country's tropical sawnwood export total fall from 46% to 40%. Its overseas sales were worth US$84.2m, against US£119m in 2011 (115,200m3 against 206,800m3).

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Severe climate jeopardizing Amazon forest, study finds

Severe climate jeopardizing Amazon forest, study finds | Timberland Investment | Scoop.it
An area of the Amazon rainforest twice the size of California continues to suffer from the effects of a megadrought that began in 2005, finds a new NASA-led study.
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Cathay Forest Products Corp. to Liquidate Timber Holdings in China and Russia

Cathay Forest Products Corp. to Liquidate Timber Holdings in China and Russia | Timberland Investment | Scoop.it

Based upon its activities to date, the new board believes that it is in the best interests of the Company and all its shareholders and other stakeholders to effect an orderly disposition of all of the Company's direct and indirect assets as expeditiously as reasonably possible while generating the maximum proceeds reasonably attainable, and to use the proceeds received by the Company to satisfy its liabilities with any excess being distributed to the Company's shareholders.  The timing of completing such dispositions, the proceeds that will be realized and the amount, if any, that will be available for distribution to the Company's shareholders remains unknown at this time.

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Tom Vilsack staying on as agriculture secretary

Tom Vilsack staying on as agriculture secretary | Timberland Investment | Scoop.it

Agriculture Secretary Tom Vilsack will stay on for President Obama’s second term, he announced today. 


“President Obama and I share a deep appreciation for rural America and its unlimited potential in the years ahead to feed a growing world population, revolutionize America’s energy, further protect our natural resources and create more jobs here at home,” Vilsack said in a statement. “We will continue to urge Congress to pass a Food, Farm and Jobs Bill that will help us continue USDA’s wide range of efforts to support this work. As we look ahead to a promising future in our small towns and rural communities, I am pleased to continue working alongside President Obama to grow more opportunity in rural America.”

Sam Radcliffe's insight:

USDA has already "grown" more opportunity in the form of overstocked forests. If it wants to create jobs, it must "reap" what it has "grown".

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Biomass and Biopower: What’s the Outlook?

Biomass and Biopower: What’s the Outlook? | Timberland Investment | Scoop.it

I remain cautiously optimistic. It appears that projects related to biomass and biopower have a chance to make a contribution to the U.S. energy mix, and my reasons for this follow.

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First, the Obama administration’s drive for renewable energy production and research will continue, as was vividly pointed out in the passing of fiscal cliff legislation.

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The administration’s intent in respect to certain biopower competitors, such as low-cost natural gas, is less obvious. Natural gas prices have been on a downward skid since January 2012, and currently they hover a little over $3 per MMBtu. This is a challenge for biomass, especially since the administration’s most effective carbon reduction method has been the replacement of coal power generation with natural gas generation.

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So the concurrent innovation of American oil and gas explorers and the administration has indirectly made new natural gas power generation the winner. This inadvertently hurts biopower, since the cost of biomass-derived power simply cannot beat out that derived from natural gas produced and sold for less than $5 to $6 per MMBtu.

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The federal government is not exclusively driving the bus on making natural gas a winner over biomass and other renewable energy forms, however. Industry and economics are playing a role. At a recent energy conference, I was caught off guard slightly when several energy executives representing utility, power plant equipment and services, and energy regulatory entities all believed that abundant North American natural gas resources would most likely hover between $4 and $6 per MMBtu for decades. For these folks, that makes natural gas very competitive, with ample room for coal to remain a major player. Biomass remains a player only when state or regional incentives come into play, or when feedstocks are fairly cheap.

Sam Radcliffe's insight:

Count me among those who refuse to invest in or have confidence in an industry that cannot exist without government support.

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World Bank's forestry investments failing to meet conservation, rights, and anti-poverty goals

World Bank's forestry investments failing to meet conservation, rights, and anti-poverty goals | Timberland Investment | Scoop.it
Mongabay: The World Bank's investments in forestry over the past decade have failed to meet key objectives of reducing poverty, preserving forests, slowing climate change, or benefitting local communities, according to a report developed by its...
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Plum Creek Timber rises on strong 4Q results

Plum Creek Timber rises on strong 4Q results | Timberland Investment | Scoop.it

Shares of Plum Creek Timber Co. rose in after-hours trading Monday after the company's fourth-quarter results topped Wall Street forecasts.


Net income grew 30 percent in the fourth quarter. The company said its business is benefiting from the recovery in residential construction, as revenue increased at its timber, real estate, and manufacturing businesses. Profits improved at its southern division and the real estate business.

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CalPERS, UC Davis launch research initiative to study impact of sustainability factors on investments

CalPERS, UC Davis launch research initiative to study impact of sustainability factors on investments | Timberland Investment | Scoop.it

The California Public Employees’ Retirement System (CalPERS) today launched, in partnership with University of California, Davis, the Sustainable Investment Research Initiative (SIRI). The initiative is an effort to drive innovative thought leadership that will inform and advance the organization’s understanding of sustainability factors and the impact they have on financial performance.


Today’s launch also marked the start of a Call for Working Papers from scholars and investment practitioners globally in the fields of finance, economics, accounting, law and business. The papers will contribute to a rigorous debate and discussion on the impact of environmental, social, and governance (ESG) issues on long-term value creation and capital market stability.

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In 2011, the CalPERS Board approved integrating ESG issues as a strategic priority across its investment portfolio. It is grounded in the three forms of economic capital – financial, human and physical – that are needed for long-term value creation, according to the pension fund’s 2012 report, “Towards Sustainable Investment.” SIRI will provide independent evaluation and insight for CalPERS sustainability strategy, as well as contribute to the larger debate.



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Deadline nears for option on Pope land in Washington

Deadline nears for option on Pope land in Washington | Timberland Investment | Scoop.it

Sixty-three days. That’s how much time the Kitsap Forest & Bay Coalition has left in its option agreement to purchase up to 7,000 acres of North Kitsap timberland and shoreline from Pope Resources.


Jon Rose, president of Pope Resources’ Olympic Property Group, said he doesn’t think the coalition will raise enough money by the March 28 deadline to buy all of Pope’s North Kitsap land. But transactions are likely as the coalition and Pope consider a complex package of price offsets and funds from a variety of sources.


Pope Resources agreed in fall 2011 to keep the land off the market while the coalition raises money to purchase the land for conservation, public open space, trails and non-motorized access to the water.


The agreement expires March 28. After that, Pope Resources officials have said they plan to sell the unpurchased acreage, which is zoned rural wooded, or one home per 20-acre lot. Pope will then turn its attention to developing Port Gamble.

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An appraisal for the 7,000 acres has been completed and the appraised value accepted by Forterra and Pope; Johnston would not disclose the appraisal, saying it’s “proprietary information.”

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State acquires 2,855 acres in Suffolk for preserve

State acquires 2,855 acres in Suffolk for preserve | Timberland Investment | Scoop.it

More than 2,800 acres of old timberland in Suffolk will become part of a new state nature preserve.


The Virginia Department of Conservation and Recreation recenlty acquired the property for $2 million. It previously was owned by International Paper.


The property and a 297-acre tract in Southhampton County will become the South Quay (KEE') Sandhills Natural Area Preserve.

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High NZ dollar could hurt timber gains

High NZ dollar could hurt timber gains | Timberland Investment | Scoop.it

The forestry and timber industry may be poised for a recovery amid signs of improvement in the Kiwi and US construction markets, but industry players say it could be a delicate one.


According to industry figures, timber exports from New Zealand appear to have bottomed, with $774.5 million worth of cut lumber sold overseas in 2012, up from $770.4m in 2011, although more timber was sold at a lower unit price.


That's poised to pick up in the year ahead, according to forecasts from the Timber Industry Federation, as construction activity picks up due to the Christchurch earthquake rebuild and a rise in home building activity in Auckland.


Asian demand for New Zealand cut timber and logs is also expected to grow as North American timber supplies tighten due to a recovery in the United States home construction market.

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But Andres Katz, a forestry economist at Resource Management Services, warns that too much of a good thing could be bad for the cut timber side of the industry. Katz said a sudden spike in demand out of China could lift the price of logs suddenly, and result in a knock-on effect for millers.

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Mike King, chief executive at forestry and timber consultancy Interpine, said the other elephant in the room was the New Zealand dollar, which was currently trading at over US84 cents - its highest level in 16 months.


"Any gain we might make in the actual payments or in the value of the export commodity is often eroded by the high value dollar and shipping costs," he said. "Those could be the killers of any boom."


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Potlatch Leaves Competition In The Dust With Robust Growth And Returns

Potlatch Leaves Competition In The Dust With Robust Growth And Returns | Timberland Investment | Scoop.it
Diversified forest products REIT Potlatch hit a 52-week high on Jan. 17, recording robust returns and a long-term expected growth of 5%.
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NASA: Landsat senses disturbance in U.S. Pacific Northwest forests

NASA: Landsat senses disturbance in U.S. Pacific Northwest forests | Timberland Investment | Scoop.it

A new way of studying and visualizing Earth science data from a NASA and U.S. Geological Survey satellite program is resulting in, for the first time, the ability to tease out the small events that can cause big changes in an ecosystem.


Called LandTrendr, this computer program is able to find patterns previously buried within vast amounts of scientific data. Still in development, it’s already led to seeing for the first time in satellite imagery an obscured, slow-moving decline and recovery of trees in Pacific Northwest forests.


Comparing satellite data to ground data, scientists uncovered the cause. “It was, as it turns out, bugs,” says Robert Kennedy, a remote sensing specialist at Boston University, who consulted with U.S. Forest Service experts to confirm his observations.

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Ishola Adebayo's comment, July 31, 2013 9:06 AM
good day Sir, pls need help on fixing scan line errors on lansat7 ETM images from 2003 using for example ArcMap9.3 or ENVI4.5 or.........thank you so much
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TreeMetrics wins €800,000 ESA contract

TreeMetrics wins €800,000 ESA contract | Timberland Investment | Scoop.it

Irish-based TreeMetrics has today announced an €800,000 contract with the European Space Agency (ESA) to lead a European research project in forestry measurement and data analytics.

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The funding will support the global roll-out of the company's web-based satellite mapping application for the forestry industry. The Enterprise Ireland-backed company said it also plans to recruit a further 10 software engineers over the next 12 months to expand its workforce at its Cork facility to 30. It said it is receiving significant interest from multinational timber growers to develop its proprietary system.


The TreeMetrics’ solution replaces traditional callipers and measuring tape with 3D laser scanners that can quickly and accurately measure the shape, size, and straightness of standing trees. The technology uses this information to predict the quantities of log products that each tree can produce, and their potential value.

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Jacksonville-based Rayonier can see a forest of cash through the trees

Jacksonville-based Rayonier can see a forest of cash through the trees | Timberland Investment | Scoop.it
The seventh-largest land owner in the United States is making huge money in the cellulose game.

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Organized as a real estate investment trust, it’s the seventh-largest landowner in the United States, the third largest in New Zealand. And the holdings keep growing. Last month, it bought another 62,600 acres in East Texas.

Most of its 2.7 million acres is timberland, growing trees that may end up in Southern sawmills or shipped to China.

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Steven Chercover, a stock analyst who covers the forestry industry for D.A. Davidson, had nothing but good things to say about Rayonier.

“They’re a timber REIT [real estate investment trust] and at first blush, their business is selling trees for building materials,” he said. “With real estate recovering, cash flow should improve. But their specialty cellulose produces an unbelievable cash flow.


“That’s why it’s the best-performing timber REIT out there.”


The fibers are produced in Rayonier plants in Jesup, Ga., and Fernandina Beach. Jesup is the largest site in the company, with almost 900 employees; Fernandina Beach has 302.


With 35 percent of the world’s performance-fiber production, Rayonier is the No. 1 supplier. So it’s spending $300 million to rework its Jesup plant. The line that has turned trees into absorbent fluff for disposal diapers and other products is being converted to another performance-fiber line. That should be finished this year.


The numbers are simple: A ton of performance fiber brings close to $2,000, Boynton said. Fluff brings half that. And the company has sold all of its performance fibers for the past five years, he said.

“In the pulp and paper world, new capacity is usually a four-letter word,” Chercover said. “But they’ve got the customers for the fiber.”

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Studs: Stocks in Timber Sector Gaining From Housing’s Recovery

Studs: Stocks in Timber Sector Gaining From Housing’s Recovery | Timberland Investment | Scoop.it

It’s official: the housing market recovery is still chugging along. In fact, it appears to be gaining strength, at least according to the latest crop of data released yesterday that showed housing startssoared to an annual rate of 954,000 in December, dramatically above the revised 851,000 rate recorded in November and well above the 885,000 rate predicted by some economists.


That means that it’s time to take a hard look at lumber and timber companies. Not all forest products businesses are likely to benefit equally from this surge in new home construction: you may want to steer clear of integrated companies that have exposure to still-weak pulp and paper operations. And you may need to go north of the border to find some of the more appealing lumber and timber companies, ranging from Conifex Timber to Acadian Timber Corp., or the giant West Fraser Timber Co.

But on this side of the border there is Weyerhauser Co. (WY), which, in spite of reporting a 25% drop in its net income in the third quarter, has recently garnered analyst support from Raymond James and Amerprise Financial, evident in a stock chart.

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