Timberland Investment
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Canadian Lumber Stocks Tumble On Report US-Canada Timber Trade War To Escalate

Canadian Lumber Stocks Tumble On Report US-Canada Timber Trade War To Escalate | Timberland Investment | Scoop.it

Canadian lumber stocks are diving this morning following a report from BMO analyst Mark Wilde who writes that "prospects for a near-term settlement of the U.S./Canadian lumber dispute have faded", prompting him to downgrade the main players in the space. The report has sent the stocks of West Frasier Timber (WFT), Canfor (CFP) and Interfor (IFP) as much as 6%, 4.6% and 6.2% lower, respectively.

***

So with no near-term resolution to the ongoing lumber dispute between the two NAFTA neighbors, the alternative is a steadily progressing trade war. As a result, as Wilde writes, "we anticipate a period of  countervailing and anti-dumping duties on Canadian lumber imports as well as continued litigation around those duties." As regards the 3 abovementioned stocks, the analyst notes that at current stock price levels, "we think the big risk is downside disappointments. Thus, we are downgrading West Fraser, Canfor, and Interfor to Market Perform. We are also downgrading Weyerhaeuser and Rayonier ratings to Market Perform. The key issue in timber is continued soft pricing on southern sawlogs. We are not making any changes to our price targets."

 

 

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Rayonier Press Release on Southern Acquisition

Rayonier Press Release on Southern Acquisition | Timberland Investment | Scoop.it

Rayonier Inc. (NYSE:RYN) today announced that the company has entered into three transactions with separate sellers to acquire approximately 95,100 acres of high-quality industrial timberlands located in Florida, Georgia and South Carolina for an aggregate purchase price of approximately $217 million, or $2,280 per acre (the “Acquisitions”). The Acquisitions are comprised of highly productive timberlands located in some of the strongest timber markets in the U.S. South, primarily along the I-95 coastal corridor near Savannah, GA.
Key attributes of the Acquisitions include the following:

  • Strong timber markets – located in the top three U.S. South timber markets based on average composite stumpage price by region (1)
  • Diverse customer base – very competitive wood market with multiple pulpwood, grade and export customers
  • Highly productive timberlands – 78’ site index; 73% plantable; sustainable yield* of approximately 450,000 tons (or 4.7 tons per acre per year on the acquired lands)
  • Well-stocked timber inventory – 4.3 million tons of merchantable timber inventory* (or 45 tons per acre); average plantation age of 14 years
  • Complementary to existing Rayonier landholdings – increases Rayonier’s ownership in U.S. South Coastal Atlantic markets by approximately 15%
  • Primarily fee simple ownership – 89% fee simple ownership and 11% leased lands
  • Accretive to cash flow – targeting an annual increase in Adjusted EBITDA** and Cash Available for Distribution (CAD)** of approximately $13 million and $10 million, respectively, over the medium-term

Rayonier expects to finance the Acquisitions with cash on hand and the proceeds of a follow-on offering of Rayonier common shares, which the company also announced today. 

***
(1) Based on Timber Mart-South weighted average composite stumpage price by region assuming product mix of 50% pulpwood, 30% chip-n-saw and 20% sawtimber.

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Rayonier's (RYN) CEO Dave Nunes on Q4 2016 Results - Earnings Call Transcript

Rayonier's (RYN) CEO Dave Nunes on Q4 2016 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Executives

Mark McHugh – Senior Vice President and Chief Financial Officer

Dave Nunes – President, Chief Executive Officer and Director

Doug Long – Senior Vice President-U.S. Operations

Chris Corr – Senior Vice President, Real Estate and Public Affairs

Analysts

Collin Mings – Raymond James & Associates, Inc.

Ketan Mamtora – BMO Capital Markets (United States)

Mark Weintraub – The Buckingham Research Group, Inc.

Mandeep – RBC Capital Markets

 

Mark Weintraub

Okay. And then lastly sort of shifting gears. A fair bit of timberland that might be coming to the market in the next year, year and a half via the TIMOs. How important – is what's going on in interest rates to how these lands are likely to – or how you would view, how you would value these properties?

Dave Nunes

Well, it’s dynamic. I mean, I think that in some level as you see a rising interest rate environment that rising interest rate environment is predicated on an inflationary environment, which is in turn predicated on higher production – product pricing. So as we see more inflation impacting the price of the products, we expect that that's going to play into the rise in interest rates. We certainly look at it more from – we factor that in as we think about hurdle rates, but we're also looking at it from the perspective our alternative uses of capital and we’re always - when we look at acquisitions understanding how our own timber is trading at the time on an imputed discount rate and we compare that to what we think the market clearing discount rate is on any particular transaction. I don’t know Mark if you want to add anything to that.

 

***

Mark Weintraub

Well, and maybe just add one more. Would look that like particularly in the U.S. South that buyers already incorporate substantial appreciation in expected sawtimber pricing et cetera. Now do these same models in your judgment certainly can use your own thought process, do they incorporate meaningful increases in interest rates as well? Or is it that you've actually, the models are getting benefit to price appreciation and not necessarily so much for the interest rates. Of course prices could go up more than what’s imputed, but any thoughts on that?

Dave Nunes

Yeah, I mean, it probably depends on who you're talking to, I mean everybody – it’s a little bit differently and recognize too that you know a big impact. This really kind of boils down to how you think about discount rates and hurdle rate and it's not only you know, reflective of your cost of capital and alternative uses of capital, but it's also reflective of the flows of capital. What we've seen is that there's been continued interest in the timber asset class from a capital flow standpoint and that has tended to have a dampening effect on cap rates in the sector as people have pushed money into this sector from a flight to quality and just a general conservative investment perspective. So you’ve got some offsetting things at play there.

 

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Rayonier Upgrades Pacific Northwest Timberland Portfolio Through Acquisition of 61,000 Acres and Disposition of 55,000 Acres

Rayonier Upgrades Pacific Northwest Timberland Portfolio Through Acquisition of 61,000 Acres and Disposition of 55,000 Acres | Timberland Investment | Scoop.it

Rayonier Inc. (NYSE:RYN) today announced the company has completed two separate transactions to enhance its Pacific Northwest timberland portfolio. The transactions include the acquisition of approximately 61,000 acres of well-stocked, highly-productive timberlands in Oregon and Washington, and the disposition of approximately 55,000 acres comprised of predominantly pre-merchantable timber in Washington. On a combined basis, these transactions will smooth the age-class distribution and materially improve the sustainable yield, near-term harvest potential, species mix and market diversification of the company’s Pacific Northwest timberland portfolio.

 

Menasha Acquisition: The first transaction involves the purchase of Menasha Forest Products Corporation (“Menasha”) jointly with Forest Investment Associates (“FIA”), a leading timberland investment management organization (“TIMO”) based in Atlanta, Georgia. Menasha is a privately held timberland REIT with approximately 132,000 acres of timberland located in Oregon and Washington, which since 2007 has been managed by Campbell Global, a leading TIMO based in Portland, Oregon. Rayonier teamed with FIA to acquire all of the outstanding common stock of Menasha. In a subsequent transaction that is expected to close in the second quarter, Rayonier and FIA will distribute the timberlands to various entities, ultimately resulting in Rayonier owning an identified portfolio of 61,000 acres of the Menasha timberlands for a final purchase price of approximately $263 million.
***
The Menasha acquisition (average plantation age of 22.4 years) complements the age-class profile of the company’s existing Pacific Northwest portfolio (average plantation age of 19.0 years). The property is comprised of approximately 85% operable lands and contains merchantable timber inventory of approximately 326 MMBF (2.6 million tons), of which an estimated 83% is Douglas-fir. The acquisition is expected to increase the company’s sustainable yield by approximately 38 MMBF (305,000 tons) per year and increase the company’s average annual harvest over the next five years by approximately 40 MMBF (320,000 tons).

 

Washington Disposition: The second transaction involves the sale of approximately 55,000 acres of timberland located in Washington to FIA for approximately $130 million. The Washington disposition (average plantation age of 12.6 years) evens out the age-class distribution of the company’s existing Pacific Northwest portfolio. The property is comprised of approximately 75% operable lands and contains merchantable timber inventory of approximately 44 MMBF (350,000 tons), of which an estimated 28% is Douglas-fir. Excluding the effect of the Menasha acquisition, the Washington disposition would decrease the company’s sustainable yield by approximately 25 MMBF (200,000 tons) per year; however, average annual harvest over the next five years is expected to decrease by only 9 MMBF (70,000 tons) from this disposition due to the younger age-class profile of the property.

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Rayonier's NZ posts 28% drop in earnings

Rayonier's NZ posts 28% drop in earnings | Timberland Investment | Scoop.it

Global forestry group Rayonier posted a 28% drop in earnings from its New Zealand division as softer Chinese demand kept a lid on export prices, and returns from domestic sales were eroded by a weaker kiwi dollar. Source: Scoop NZ

 

Rayonier manages Matariki Forestry Group, the country’s third-biggest forestry company with 13,000 hectares of plantations across New Zealand.

Last month the Jacksonville, Florida-based company said its New Zealand division reported adjusted earnings before interest, tax, depreciation and amortisation of US$33 million in calendar 2015, down from US$46 million a year earlier.
***
Rayonier received lower prices in both domestic and export markets from the New Zealand division, with domestic saw timber down 18% selling at US$64.05 a ton, domestic pulpwood prices falling 15% to US$32/ton, and export saw timber dropping 21% to US$88.59/ton.

Since the start of 2016, New Zealand log export prices have been benefiting from cheap oil providing lower shipping costs, offsetting the muted demand from China.
***
The group added another 1800 hectares of forestry rights in 2015 at a cost of US$9.9 million.

Last year, Rayonier injected NZ$242 million of capital into Matariki to increase its stake to 77% from 65%.

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Rayonier David L. Nunes on Q3 2015 Results - Earnings Call Transcript

Rayonier David L. Nunes on Q3 2015 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Interesting exchanges re valuation, timberland markets and values:


Mark Wilde - BMO Capital Markets (United States)
Okay. And then, I guess as you kind of think about acquisitions kind of going forward, it just – from the outside, it's kind of hard to see how any acquisition can – because when Southern timberland, it seems to be being valued at about 2.5% to 3% on an EBITDA basis. Hard to see how any of those acquisitions can look better than your own stock yielding above 4%?

David L. Nunes - President and Chief Executive Officer
Well, and this, I think this really speaks to why we've had a fairly limited number of acquisitions that we've gone after this year. We've closed on eight acquisitions. They've generally been on the smaller side and I think the fact that in Q3 all of our capital really was allocated to share repurchases, speaks to that yield dynamic that you just referenced. But there are occasional acquisition opportunities that do present higher yields, and I think that we have seen as well on the properties that we've purchased that we don't mind paying up for properties that are highly productive. And I think that's another element of the higher yield properties is they tend to be on higher quality properties. So we look at it as having bought stronger factories, if you will.

Mark Wilde - BMO Capital Markets (United States)
Okay. All right. Then the last question I have, Dave, is just on sort of what's going on in terms of the M&A market right now. You've had two big deals out there in the market, Foley and CalPERS both of which I think have a little bit of hair on them, but what's your sense of those deals and then what's in the sort of what seems to be in the pipeline beyond them?

David L. Nunes - President and Chief Executive Officer
Well, I'd say there is a fair bit of transactions that are out there in the pipeline. Foley is still working its way through and we understand that there was a sale in the works out of a portion of the CalPERS properties in Louisiana and really until we learn more about the values on those, it's hard to comment from a qualitative standpoint.

***

I also would say that there are quite a number of acquisitions that were made a decade ago by a number of TIMOs that are starting to near the end of their 10-year term. And so, we anticipate that we're going to continue to see properties put out on the market. And for those that have a good fit with what we're looking for, we'll take a hard look at them.
***
Mark Wilde - BMO Capital Markets (United States)
Okay. And then the last question I had is just a little longer term one for Dave. And I wondered if you would just comment on this sort of disparity that exists out there from a valuation perspective between kind of public market and private market and how you think that disparity might move over time? Because it seems to me it's kind of ebbed and flowed a bit.

David L. Nunes - President and Chief Executive Officer
Yeah. And I think you also have to recognize, Mark, that I think there have been times where that disparity has been influenced from a data standpoint that perhaps people have drawn the wrong conclusions on. For example, there was a period over this last cycle where a lot of people were comparing NCREIF results to private market results or to public market results and NCREIF appeared to be defying gravity, if you will. But at that time, NCREIF was allowing companies to do internal valuations. And so it contributed to some of that gap in value. NCREIF has changed that policy now to where all properties in the index have to go through a third-party appraisal. But recognize third-party appraisals aren't always perfect, and so I think you still have noise on that front. And then even in the transactions market, you're going to see differences in terms of stocking level and productivity that may or may not be apparent to the outside player.

And then as it relates to the public market valuations as we and others have talked about, the South in particular is not a homogeneous market. You've got big differences in value. And I'm not sure that we're a believer in what you hear of, say, a new normal of pricing. I think it really depends on the attributes of the property, the stocking, the growth rates, et cetera.

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Jack D Bridges's curator insight, November 4, 2015 8:46 PM

Many thanks to the estimable Sam Radcliffe for separating wheat from chaff here for us.


Particularly interesting are D. Nunes words about the TIMO disposition cycle--apparently, now in motion. 


Will industrial owners like Rayonier scoop up adjacent / adjoining assets when funds need to unwind, and return capital? And, will this disposition cycle push prices down?


Or, will the flow of new institutional capital in the marketplace continue to warp discount rate assumptions, scoop up this oncoming supply of assets, and keep the chase for acreage aloft?


JDB



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Rayonier Completes Two Timberland Acquisitions in the U.S. South and Pacific Northwest for $60 Million

Rayonier Completes Two Timberland Acquisitions in the U.S. South and        Pacific Northwest for $60 Million | Timberland Investment | Scoop.it
Rayonier Inc. RYN, -0.51% announced today the company has acquired approximately 18,000 acres of high-quality timberlands in southwest Louisiana and northwest Oregon in two separate transactions from BTG Pactual Timberland Investment Group. Both properties are located near existing Rayonier landholdings:

The Louisiana property – known as the King parcel – consists of approximately 12,200 acres of high quality, well managed southern pine timberland located in strong timber markets. The property was purchased for $25.5 million. It contains merchantable inventory of approximately 560,000 tons, is comprised of approximately 86% plantable lands, and is expected to improve the company’s sustainable yield by approximately 45,000 tons per year. This acquisition expands Rayonier’s ownership in Louisiana to approximately 150,000 acres.
The Oregon property – known as the Scappoose parcel – consists of approximately 5,600 acres of highly productive, well-stocked and highly-operable timberland tributary to strong domestic and export markets in the northwest corner of the state, near current company holdings in southwest Washington. The property was purchased for $34 million. It complements the age-class profile of the company’s Pacific Northwest timber holdings, contains merchantable inventory of approximately 102,000 tons (12.7 MMBF) of which an estimated 95% is high-value Douglas-fir, is comprised of approximately 88% operable lands, and is expected to improve the company’s sustainable yield by approximately 35,000 tons (4.4 MMBF) per year. This acquisition expands Rayonier’s footprint into the state of Oregon and grows Rayonier’s total Pacific Northwest ownership to approximately 374,000 acres.
Sam Radcliffe's insight:

More than $2000 per acre in the South and more than $6000 per acre in the PNW. Or another way: $45.50 per ton of inventory in the South, $333 per ton in the PNW. Or another way: $566 per ton of increased allowable cut in the South, $971 per ton in the PNW.

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Rayonier (RYN) David L. Nunes on Q1 2015 Results - Earnings Call Transcript

Rayonier (RYN) David L. Nunes on Q1 2015 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Collin P. Mings - Raymond James & Associates, Inc.
Hey. Good morning, guys. I guess my first question, both for Dave and Mark, just as it relates to the balance sheet and cap allocation priorities, clearly you bought some more Timberland during the quarter, but just given the weakness in the stock price, you're down 7% year-to-date. What's the latest thinking as far as maybe looking at buying back some stock?

Mark McHugh - Chief Financial Officer, SVP & IR Contact
Yeah, Collin, we don't currently have a buyback authorization in place, but with our stock around $26 per share, we certainly believe that it's trading well below net asset value. So, share buybacks are something that we are actively evaluating.

Ultimately, we have to evaluate share buybacks versus other uses of capital like acquisitions and make judgments about where we believe we have the best opportunities to drive shareholder return. We recognize that from a pure NAV standpoint, our current stock price implies a value per acre that is cheaper than where we can acquire Timberlands in the M&A market today.
***
Collin P. Mings - Raymond James & Associates, Inc.
Okay. And then well, I guess just going back to this theme, Dave, of value that's being implied by the public markets right now versus what we're seeing on private deals that are getting done. Just any thoughts about how you think about the potential M&A in this space, the Timber REITS, a couple of the other timber-focused companies that are out there and just maybe just your thoughts about the NAV disconnect right now we're seeing in the marketplace?

David L. Nunes - President, Chief Executive Officer & Director
Well, I think that you have to be very careful in an environment like this where we've seen less deal flow as we've started 2015 relative to where we started 2014. And so you have to be really careful drawing too many conclusions from that because you've got quite a wide range of quality in terms of the properties and so I don't pay as much attention to those few comparable sales because they just not representative of broad market averages, and I think I'd repeat what Mark talked about.
***
Paul C. Quinn - RBC Dominion Securities, Inc.
Yes. Thanks very much. Good morning. Just a question on the M&A front, you guys were successful with the 12,000 plus acres in Q1. How was that done? Were those auction processes and what's your assessment of the current competitive landscape out there?

David L. Nunes - President, Chief Executive Officer & Director
We continue to have a mix of participation in both negotiated and auction deals. That particular one was through an auction process. And again, our view is that we're going to be more competitive on transactions that have a fair bit of complexity to them. We have a strong HBU rural land sales effort. And so, whenever we have a property we will have our Real Estate sales guys assess it as part of our due-diligence efforts. And we think in that particular example that helped us be more competitive.

We are also, we also are tending to look for properties that we've got an existing presence from a geographic standpoint to keep our management costs low. And so most of the acquisitions that we've done over the last year, year and a half have all been in areas that are – I would consider to some degree bolt-on transactions.

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Analyst: Rayonier's Mea Culpa Creates Long Opportunity

Analyst: Rayonier's Mea Culpa Creates Long Opportunity | Timberland Investment | Scoop.it

On Monday, along with announcing its 3rd quarter results, Rayonier  also announced:

  • That it had erred in its inventory as stated on the 2013 10-K.
  • That it had been harvesting at a rate higher than the sustainable rate on its Pacific Northwest properties, and would henceforth lower the harvest rate in the Pacific Northwest.
  • That it would reduce its dependence on non-strategic timberland sales to generate cash.
  • That it would reduce its dividend from $.30 a quarter to $.25.
  • That because of the inventory error, it had under-reported its depletion expenses for the 1st and 2nd quarters of 2014, and would take an additional $2.6 million expense in the 3rd quarter to correct this.

For these grievous crimes, its market price dropped from $33.90 to $26.09 today, a 23% drop.
***

  • I'll sum up my view on Rayonier's mea culpa as follows:
  • The inventory issue is unfortunate but not that important in the big picture.
  • The harvest drop in Washington is unfortunate but not out of the ordinary in the world of forest inventories and forests with older age classes.
  • Reducing reliance on non-strategic timberland sales is a good thing.
  • Reducing the dividend is unfortunate but understandable.
  • Depletion, who cares.


Of all the things listed above, only numbers 4 and 5 were necessary from a legal standpoint. Issues 1, 2, and 3 could have been handled as internal management issues. It is only, in my opinion, because of Dave Nunes, the new CEO's strong belief in transparency that they were reported. Had that not been the case, I believe the 23% drop in unit price would not have been as bad. I think transparency is good but sometimes too much is not.


Let's look at Rayonier's land holdings. Counting Rayonier's 65% interest in 300,000 acres in New Zealand, Rayonier owns about 2.6 million acres of land. Using $1,800 per acre for southern timberlands, $3,000 per acre for northwest timberlands, and $2,000 per acre for New Zealand lands, Rayonier's timberlands are worth about $5 billion dollars, or about $39 per unit. Take away the $605 million long-term debt and you get about $34 per unit.


So, if Rayonier shuts down today and sells itself on the open market, it would be worth about $34 a unit. It is selling now for about $26. If I had a little cash lying around, and was a long-term investor, I might be tempted to pick up some RYN at $26 and get a 3.8% dividend to boot.

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Rayonier and county settle in timberland value dispute

Rayonier and county settle in timberland value dispute | Timberland Investment | Scoop.it

Rayonier and Wayne County have reached a settlement in their dispute over the valuation of the company’s timberland. No one is saying, though, what the settlement is.


In a joint press release released late Thursday afternoon, Rayonier and the county government announced “agreement on a settlement to their ongoing dispute regarding valuations of Rayonier-owned Wayne County timberland.” As the release noted, the dispute dated back to 2008 and involved various court proceedings.
***
When Russell Schweiss, Rayonier’s director of corporate communications, was asked about the terms of the settlement, though, he responded, “Rayonier and Wayne County have resolved the long-running tax dispute on mutually agreeable terms. Rayonier is pleased with the resolution. I am not, however, at liberty to discuss the specifics of the settlement.”
***
Rayonier had contended that its timberland values from the 2008 countywide revaluation were too high. In the resulting dispute, a superior court judge found that the county’s process for valuing large-acre tracts was fundamentally flawed, and the Assessors’ Office eventually had nearly 50 Rayonier tracts reassessed.

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Rayonier's CEO Discusses Q1 2014 Results - Earnings Call Transcript

Rayonier's CEO Discusses Q1 2014 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

A nugget that should be of interest to "Timberland Investment" readers:


Collin Mings - Raymond James & Associates

Good morning, first up, again congrats on your new position, Ed and if you're listening, Hans, our best wishes to you. Just quickly Lynn, just you talked a lot about timberland acquisitions. Thank you for that overview but can you talk a little bit more about just who you're seeing more of the deal flow coming from, can you put a little bit more parameters around what you have under contract and just a little bit more detail on that acquisition front.

Lynn Wilson - EVP, Forest Resources

Certainly, Collin. Good morning. One of the things that we are seeing is a series of packages coming out from the TMOs, so those are throughout each of the region so those are multiple packages from multiple TMOs that's one side on the bid process and then the other aspect that we are seeing from internally from our team is the significant outreach and a ramp up of our effort. We are really focused on small private land owners that are adjacent or within our target markets and so some of the properties that we closed on are in that 5,000 acre to 10,000 acre range in both Florida and Georgia with one small property in Washington state that are within our current footprint where we were aware of a private land owner that had a quality property for sale. So once that we closed on so far has been in Baker County, Florida and a small property in Washington state and then a small property in Georgia, the other ones that we have under contract and are working towards closing are in East Texas and those from small private land owners.

Collin Mings - Raymond James & Associates

Okay. Great, Lynn. Thanks for that level of detail. Just, making about transaction pricing and recognizing all the caveat of like no two pieces of timberland are the same but what do think as far what you're seeing as far as in the pricing environment when you would you say that kind of a comparable piece of timberland has gone up in value, call it in the US south, this year relative to last year or is there any way that you guys would think about that?

Lynn Wilson - EVP, Forest Resources

Its gone up slightly, Collin. They are over year and I think that's consistent what we are seeing in the wood market with the saw log pricing coming up as well in people’s viewpoint but its only slight up.

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Rayonier will separate into two publicly traded companies this year

Rayonier will separate into two publicly traded companies this year | Timberland Investment | Scoop.it

Rayonier Inc. said it plans to separate its performance fibers business from its forest resources and real estate operations to form two publicly traded companies this year.


The Jacksonville, Fla., company disclosed the plans to spin off the performance fibers business to shareholders, along with better-than-expected fourth-quarter earnings, sending its shares higher in midday trading Monday.

***

"Everything lined up at the perfect time to launch these two businesses," Chief Executive Paul Boynton said in an interview with The Wall Street Journal on Monday.


Mr. Boynton will serve as CEO of the performance fibers business. The still-unnamed company recorded revenue of more than $1 billion last year and has about 675,000 metric tons of cellulose specialties capacity between its Florida and Georgia facilities.

***

The forest resources and real-estate operations, meanwhile, will retain the Rayonier name and has 2.6 million acres of timberlands.

Mr. Boynton said he expects a boost in housing starts to drive growth at that company.


"We're expecting [housing starts] to move back to 1.5 million starts per year," Mr. Boynton said. "We think that will be a significant driver. We're on the rebound economically in the U.S."

***

The forest resources business posted $382 million in sales last year, while its real estate arm booked $149 million in sales. The company is searching for a chief executive to lead that operation, and current board member Richard Kincaid will serve as chairman.

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Rayonier gets mixed result from China's anti dumping investigation

Rayonier gets mixed result from China's anti dumping investigation | Timberland Investment | Scoop.it

Rayonier Inc. (NYSE:RYN) announced today that on November 6, China's Ministry of Commerce (MOFCOM) issued the following preliminary determination regarding the import of Rayonier dissolving pulp products into China:


1) Rayonier's high purity cellulose acetate and other high purity products will not be subject to any duties as they are specifically exempted.

2) Rayonier's lower purity Fibernier grade product used in commodity viscose applications will be subject to a 21.7 percent interim duty effective November 7.


Paul Boynton, Chairman, President and CEO stated, "While we are pleased that MOFCOM recognized the unique characteristics of our high-purity cellulose specialty products, we intend to challenge the interim duty on commodity viscose as it appears to be based on inaccurate assumptions."


In February 2013, MOFCOM initiated an anti-dumping investigation of imports of dissolving wood, cotton and bamboo pulp into China from the U.S., Canada and Brazil during 2012. These determinations by MOFCOM are preliminary and subject to change upon the completion of its investigation and issuance of its final determination, which is expected in the first half of 2014.


Rayonier is currently reviewing the basis for MOFCOM's duty calculation and expects to submit a formal response next week. In addition, the Company is evaluating all potential product and market segment options that its broad range of capabilities provides in the event that MOFCOM's preliminary duty is not materially reduced or eliminated. Rayonier does not expect that MOFCOM's preliminary duty will materially affect its business results.

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Rayonier's (RYN) CEO Dave Nunes on Q1 2017 Results - Earnings Call Transcript

Rayonier's (RYN) CEO Dave Nunes on Q1 2017 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Dave Nunes - President & CEO

Before discussing our results for the quarter, I'd like to briefly address our recent equity offering and portfolio moves in the U.S. south. On March 16, we announced that company had entered into three transactions to acquire approximately 95,100 acres of high quality industrial timberlands located in Coastal Florida, Georgia and South Carolina.

 

We recently closed on the transactions for a final aggregate purchase price of $214 million or roughly $2250 per acre. We're very excited about these acquisitions as they meaningfully increase our footprint in some of the strongest markets in the U.S. south. Further, these properties are highly productive with an average site index of 78 feet and average productivity of 4.7 tons per acre per year.

 

Over the next five years we expect that these properties will contribute on average roughly 13 million of incremental adjusted EBITDA per year to our Southern Timber segment. So while these properties transacted at a relatively high per acre value reflective of their high quality, we expect them to generate a strong cash yield and an attractive long-term return for our shareholders.
***
Mark Wilde - BMO Capital Market

Okay. And then finally Dave if I could one of the trade papers recently had an article suggesting some cooling in the Southern timberland markets I assume you seen this and I wondered if you had any thoughts on that?

 

Dave Nunes - President & CEO

Our view is always been that it really is quality dependent and I think that you’re seeing a mix of quality assets there's plenty of deal flow right now but there's a mix of assets. Certainly at one end of the spectrum you have the transactions that we recently completed, that were very high quality assets in high quality markets. There are other assets that are going to be at lower quality and I think that depending on how you look at markets and which of those assets you're looking at, it’s going to color your view of markets.

 

But I think we still are seeing strong market dynamics in terms of capital trying to get into the asset class and I don't know that we espoused to the markets cooling as much as we do really been driven by the quality of the assets that are out there.
***
Steve Chercover - Davidson

My last question again, forgive me if I might've missed it, but in southern sawtimber, the price is about as flat as a board. So when do you expect tension in that market that will help elevate prices?

 

Dave Nunes - President & CEO

I think it's quite variable. In our discussions with investors, we are focusing on the relative build in inventory across the U.S. south and we continue to believe and see that there is going to be very variable price elasticity going forward. And in some of our more tensioned wood baskets, we're experiencing that price elasticity now and in other wood baskets that are less tensioned, we're not.

And I think it it's been to some degree exacerbated by the weather factors and the demand reductions associated with these two pulp mill incidents that Doug referenced that I think have exaggerated perhaps some of the effects. The La Niña conditions that have currently translated to a lot of dry weather in abundance of supply, as well as the demand reduction, neither of those two things are going to be long-term in nature.
***
Chip Dillon - Vertical Research

And then maybe lastly when you think about the 95,000 acres you bought they all seem to be relatively close to I95 and I know there is some very empty spaces still along the highway. But that doesn't mean that in five or 10 years whether it’s warehouses or other types of development could occur. Is there some optionality on these 95,000 acres in your mind, you might not have valued it as such when you made your deal, but do you think it's reasonable that if things progress that you could see some HBU potential among these acres?

 

Mark McHugh - SVP & CFO

I expect that we’re going to sell probably 20,000 to 30,000 acres a year into those HBU markets. And you kind of see the price premiums. I think the last couple years we've averaged 2500 to 2750 an acre, so that kind of gives you a sense as to our kind of run rate expectation for that business and I think it was generally kind of translate into a similar range to what we're forecasting for this year.

 

And so as it relates to the upside potential in the recent acquisition you know it’s absolutely something that we see is creating some upside over time. We didn’t underwrite it into our acquisition underwriting. We didn’t need to. This was a property from a timber standpoint really supported the valuation without that but clearly these markets are again in that sort of path of growth in the I95 corridor and so we do see some upside there over time keeping in mind that because the timber value here is so high it’s sort of hurdle rate to actually sell into that HBU market is going to be materially higher as well.

 

Dave Nunes - President & CEO

Chip another thing to think about it is that there's a portion of those assets that actually have HBU value from an agricultural conversion and that's not something that you see very often, but it speaks to when you have site index that’s that high and you see surrounding lands that are in active agriculture, it’s suggestive of that.

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Hancock Timber Resource Group Acquires 25,000 Acres of Timberlands in Alabama

Hancock Timber Resource Group Acquires 25,000 Acres of Timberlands in Alabama | Timberland Investment | Scoop.it

The Hancock Timber Resource Group has completed the acquisition of approximately 25,000 acres of timberlands in Alabama from Rayonier Inc.

 

This transaction is a follow-on to another transaction completed in late 2016 where Hancock Timber acquired approximately 37,000 acres of timberlands in Mississippi and Alabama from Rayonier.

"We are very pleased to secure additional high quality timberlands for our clients," said Hancock Timber Resource Group President Brent Keefer. "These properties are located in an area of the US South with deep and diverse markets for forest products. We will be able to supply solid wood and fiber to a variety of facilities in southern Alabama, western Georgia, and northern Florida. We look forward to managing them to their highest potential."

 

As with the previous acquisition, the timberlands are stocked with well-managed southern pine plantations and hardwoods. The timberlands will be managed by Hancock Forest Management, the organization's integrated property management group. Hancock Timber has approximately 280,000 acres of timberland under management in Mississippi and Alabama, 1.8 million acres in the US South and almost six million acres globally.

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Rayonier (RYN) David L. Nunes on Q2 2016 Results - Earnings Call Transcript

Rayonier (RYN) David L. Nunes on Q2 2016 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Chip Dillon - Vertical Research Partners

Yes. Hi. I just had a general question about you gave a great slide on your M&A acquisition strategy or timberland acquisition strategy. When you look at today's like interest rate environment, if you were to debt finance timberland sort of at some of the asking prices you're seeing in areas that might be of interest to you, would you say the spread looks good to you, or it's not very favorable? How do you sort of compare the cap rates and the returns you're seeing with the financing costs?

Mark McHugh - Senior Vice President and Chief Financial Officer

Yeah. I mean we continue to think that in the M&A market sort of the going rate from a DCF, a discount rate standpoint, is in probably the 5% to 5.5% range. And that could swing on – 5% to 5.5% real, which would be net of inflation. And the deals I'd say that we're more focused on tend to be deals that are delivering the majority of that or vast majority of that in cash flow. And so we're frequently looking at deals that have relatively strong cash yields relative to that discount rate. Certainly with where we're able to finance in the debt markets today, there is a pretty healthy spread, call it, 200 basis points to 300 basis points to our debt financing rates.
***
Mark William Wilde - BMO Capital Markets (United States)

Yeah. I think you might have answered a big part of my question when you answered Chip's. I was just curious with these very low interest rates whether you're seeing any kind of downward pressure on discount rates?

David L. Nunes - President, Chief Executive Officer & Director

I'd say that they've held relatively firm in the last – probably in the last 18 months. Again, what we've seen is differential discount rates for different quality transactions. Again, I think on average, across the U.S. South we think the going rate is in that 5% to 5.5% real, but we've seen people pay up for very high quality properties. Likewise, we've seen some no sales and some transactions that certainly traded above that just relative to the risk of the particular portfolio or the inventory mix and the maturity of the age class.

Mark William Wilde - BMO Capital Markets (United States)

Okay. Mark, I know over time there have been points where a lot of the activity with the TIMOs has come from kind of offshore money and with rates so low over in Europe right now, are you getting a sense that the TIMOs are seeing more offshore money coming in?

David L. Nunes - President, Chief Executive Officer & Director

I think that's probably true, Mark in both the private equity as well as some of the public equity. I mean I think you're seeing more of it as well in the context of investors into the timber REIT space, but I think that we're continuing to see fairly healthy demand for timber from offshore capital for all of the reasons that you would expect, sort of flight to quality, the low interest rates in Europe as an example. You're seeing yield, people coming here for safe yield, and so I don't think we've seen any dissipation of that type of capital flow.

Mark William Wilde - BMO Capital Markets (United States)

Okay. And then last question, kind of along the same lines. Dave a while back you mentioned to me that you thought that actually discount rates were still wider down in New Zealand. Have you seen any tightening there?

David L. Nunes - President, Chief Executive Officer & Director

New Zealand has less deal flow certainly than the U.S. And so you don't have as many data points. I think that there have been some recent transactions in New Zealand where we've seen lower discount rates than what you typically see in a lot of appraisals. So I think one of the things to keep in mind with New Zealand though is that a lot of the land in New Zealand is tied up in long-term leases or in forestry rights. And so those leases, I think, tend to contribute to a higher blended discount rate in New Zealand, relative to say, to the U.S.

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Phaunos Timber Says Matariki Forestry Recapitalised By Rayonier

Phaunos Timber Says Matariki Forestry Recapitalised By Rayonier | Timberland Investment | Scoop.it
Phaunos Timber Fund Ltd on Wednesday said its partner on the Matariki Forestry Group project in New Zealand has provided capital to refinance the company.

Rayonier Canterbury LLC, the majority owner of Matariki, has provided the capital for the repayment of all outstanding amounts owed under Matariki's NZD235.0 million credit facility.

The move will result in Matariki's annual interest costs falling around NZD15.0 million, Phaunos said.

Following the recapitalisation, Phaunos' stake in Matariki will be diluted to around 23% from 35%, but the company said the value of its investment has not been diluted.

Phaunos shares were down 4.2% to 0.34 pence.
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Rayonier (RYN) David L. Nunes on Q4 2015 Results - Earnings Call Transcript

Rayonier (RYN) David L. Nunes on Q4 2015 Results - Earnings Call Transcript | Timberland Investment | Scoop.it

Collin P. Mings - Raymond James & Associates, Inc.

Do you think that there could be any risk to some downward pressure in timberland values just as that timeline – particularly in the U.S. South is that timeline for a recovery in the South continues to extend?

David L. Nunes - President, Chief Executive Officer & Director

Well, certainly that potential exists. I think that this going to be a function of the capital flow – recognize you have offsetting elements to that with net capital inflows coming into this sector, particularly in these uncertain market conditions, I think we tend to see timber as a flight to quality and that have some offsetting impact. As we have looked at market clearing prices on recent transactions it does not appear that those values are moderating as you suggest. But it certainly always remains a potential in any market.
***
Steven Pierre Chercover - D. A. Davidson & Co.

Great. And then a lot of these things have already been addressed, but the way you consider repos versus new land acquisitions, when you consider that a repo eliminates a 5% dividend yield, I can't imagine that you could buy land with a discount rate lower than that.

Mark McHugh - Senior Vice President and Chief Financial Officer

I think market discount rates in timberland today continue to be in the range of 5% to 6% real. Now, that's a kind of all-in discount rate which will count for a number of other assumptions that go into it. But I'll say that we have generally been focused on properties that are more productive than average. And so, I think that the cash yield that we're seeing on the properties that we've been buying have generally been in that same type of zip code Steve.
***
Mark McHugh - Senior Vice President and Chief Financial Officer

I think that our U.S. South acreage is trading below $1,300 an acre today. That is pretty cheap by any measure over the last decade or so. The NCREIF Index, even in the face of the housing crisis, I think the lowest that it got in that period was about $1,475 per acre. And what was driving that economic crisis was a downturn in the – collapse of the housing market – which had a much more direct impact on timberland values than kind of what we're seeing in today's market. And so, by any measure, it certainly feels as though the stock is cheap and certainly feels as though it's trading at a significant discount to NAV. But we are constantly refining our views around NAV, and again, we're not indifferent to kind of looking it, stress testing kind of different pricing scenarios with different sort of outlooks for the economic situation.

David L. Nunes - President, Chief Executive Officer & Director

George, I'd just add to that too, that I don't think that we're seeing a net reduction in capital flows coming for this asset. We are continuing, this asset class is continuing to mature and I think as it does so and becomes more of its own unique asset class, it's attracting capital from other regions and other sectors of the market. And we see that in the context of the asset values as we discussed earlier in the call, you know, we're just not seeing the fall off that you described as being a potential, but we certainly look for that.
***
Chip A. Dillon - Vertical Research Partners LLC

Got you. And then just real quickly, I am sitting here thinking, 10 years ago, 12 years ago, you had sort of a rush of pension plans going into timberland, is it asset class, and that created a real pushup in values. And I guess our concern have been that as they – these partnerships come to an end, you might see a lot of, or maybe some excess supply in the market. Although, today in the real world, if I'm running a pension plan, my choices are, I can pay the German government to take my money, or I am getting a 1.59% for 10 years from the U.S. government. And you, I think Mark mentioned the discount rates, my guess is that, that fear is completely off the table. And maybe what I think is different about timberland is that it's a 50-year to 70-year asset and the durations really long, and kind of doesn't matter where lumber is today. And I guess my question is, are you starting – when you think about those realities, are you starting to actually see increasing interest from, pensions has been down, but you really have very few other places to go?

David L. Nunes - President, Chief Executive Officer & Director

Chip I think that you hit it right on the head, and to some degree this gets back to what I was talking about earlier in the call. You have to look and try to get a grasp of the net capital flows in the market. And I would say that we're still at a stage where there are lot of pension plans and other long-dated endowments and the like, there are lot of those sources of capital that are in timber, but there is a lot that that are trying to get into timber.


And I think we see that in the context we're not seeing a lot of decline in asset values on transactions, because you know while you have some of those transactions from a decade ago coming back to market and may be in some cases people exiting the market, I think you've got plenty of others coming on to the market. And certainly, as you look at negative interest rate environment in Europe, I think we're seeing a continued growth in European capital in this asset class. We see it on the TIMO space, more and more capital flowing into the TIMO is European capital, and I think it's a flight to quality, it's a yield, it's a yield play as you described.


And so, we think that helps kind of buttress the asset class that we're in and keeps those private market values at a relatively stable level notwithstanding the broader uncertainty in the rest of both capital markets and product markets.

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Phaunos Timber Partner Injecting Funds Into Joint Venture

Phaunos Timber Partner Injecting Funds Into Joint Venture | Timberland Investment | Scoop.it
Phaunos Timber Fund Ltd on Thursday said it has reached an agreement in principle with Rayonier for a capital infusion into their Matariki Forestry Group joint venture in New Zealand, which will allow the venture to repay all outstanding amounts under its existing NZD235 million credit facility.


The deal is expected to close by the end of the year and should generate NZD15 million a year in cost savings, Phaunos said.

"The reduction of the Matariki joint venture debt has been a key objective for both the directors of Phaunos and Stafford Capital Partners since the latter became manager in July 2014," said Stephen Addicott, a partner with Stafford Capital Partners, the manager of the Phaunos fund.

"The transaction, based on Matariki's net asset value, is not expected to involve any loss of value or loss of rights under the existing shareholders agreement," Addicott added.
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Rayonier (RYN) Approves $100M Common Stock Buyback Plan

Rayonier (RYN) Approves $100M Common Stock Buyback Plan | Timberland Investment | Scoop.it
Rayonier (NYSE: RYN) announced that the company’s board of directors has approved the repurchase of up to $100 million of the company’s common shares. Repurchases may be made at management’s discretion from time to time on the open market or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time.

"This share repurchase authorization is an important component of our capital allocation plan, underscores our commitment to creating value for shareholders, and demonstrates our conviction in the underlying net asset value of the company relative to the current share price," said David L. Nunes, president and CEO.
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Conservancy buys $7M in timberland on Olympic Peninsula

Conservancy buys $7M in timberland on Olympic Peninsula | Timberland Investment | Scoop.it
The Nature Conservancy has purchased 3,184 acres of Rayonier timberlands in the Hoh River drainage in a $7 million acquisition that is part of a broader forest-restoration effort on the Olympic Peninsula.

The land sale, which closed Monday, will help in the creation of a 32-mile conservation corridor extending from the Olympic National Park to the Olympic Coast National Marine Sanctuary.


The river corridor provides critical habitat for marbled murrelet, northern spotted owl, bald eagle and bull trout, and supports native salmon and steelhead runs, according to a statement released Monday by the Nature Conservancy. Plans for the conservancy land includes planting trees, restoring fish and wildlife habitat and some long-term rotation timber harvests.
Sam Radcliffe's insight:

$2,198 per acre

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A New Rayonier, But The Same Old Problem

A New Rayonier, But The Same Old Problem | Timberland Investment | Scoop.it

For the major publicly-traded timberland owners - a list that includes Rayonier (NYSE:RYN), Plum Creek (NYSE:PCL), Weyerhaeuser (NYSE:WY), Pope Resources (NASDAQ:POPE), and Potlatch (NASDAQ:PCH) - the frustrating wait for a housing-led recovery goes on. Although Rayonier does have a relative advantage to Plum Creek with its larger (as a percentage) weighting to the Pacific Northwest and its New Zealand joint venture, not to mention the absence of wood products operations, the company can do relatively little in the face of persistent weakness in stumpage prices and sluggish demand for HBU real estate.

***

Earlier this year, Rayonier completed the spin-off of Rayonier Advanced Materials (NYSE:RYAM), the company's former specialty cellulose, ethers, and pulp business. Now, Rayonier is effectively a timberland pure-play - owning about 2.1M acres of U.S. timberland, another 200K acres designated as HBU land (to be sold for its real estate value), and more than 300K acres in New Zealand owned through a 65% interest in a joint venture with Matariki that focuses on Radiata pine for Asian export markets.


Unlike Weyerhaeuser and Plum Creek, Rayonier does not have a wood products operation. I'd call that a mixed-to-positive factor for the company. These wood product operations (which manufacture products like lumber, plywood, and engineered structural products) can generate pretty good cash flow when residential building activity picks up, but they typically command lower multiples than timberlands on a "dollar for dollar" basis.
***
Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions, acquiring more timberland now is a tricky move. Rayonier doesn't really need to acquire more land, particularly since it sold its lower-value Northeast lands in 2013, but adding more higher-value land in areas like the Pacific Northwest wouldn't be terrible. All told, though, Rayonier's best move is just to manage its harvests appropriately, take advantage of new opportunities to sell pulpwood (like for wood fuel pellets), and wait for prices to improve.

Sam Radcliffe's insight:

"Timberland operators are sort of stuck right now - because the equity markets assign a lower per-acre value to timberland acreage than actual real-time private transactions." Where have I heard that before? Oh, that's right, it was the reason Sir James Goldsmith targeted timber companies for hostile takeovers in the 1980's. It was the reason Wall Street pressured timber companies to divest of their timberlands in the late 1990's and early 2000's.


I happen to agree entirely with the observation that equity markets are assigning a lower value than private transactions would bring. Given the amount of institutional dry powder right now, might that suggest the time is ripe for a hostile run at the timber REIT's? The rationale has already played out twice in the last thirty years.

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Jack D Bridges's curator insight, August 26, 2014 1:37 PM

https://www.youtube.com/watch?v=9MiO-2Qnm8M

 

It's a simple question: What if this is as good as it gets? Please apply that to the current state of the housing market (or at least the rate for new construction of single-family homes in the US).

 

We've had artificially low interest rates for how many years now? How many rounds of asset purchases & market operations by the Fed, along with a $4 Trillion balance sheet supporting our financial system? So, where do we go from here, then?

 

I don't mean to imply that the US will never see 1.5M housing starts again. No. I just think it's folly to consider this the baseline case, as many analysts and timber REIT CEOs think. This lot seems to forget the massive credit bubble, and how it disproportionately fed into home construction & the housing market in general (and don't forget the Fannie / Freddie role in supporting the push for homeownership, either). 

 

Now, even if the housing market doesn't catch fire again, what does this mean for timberland owners? Since wood baskets are hyper local, it really depends on where one looks. For the PNW, as long as China / Japan / Korea need fiber, and it remains a desirable place to live, the market dynamics shouldn't change a whole lot. It's a very competitive marketplace--with industrial users, TIMOs, and land conservancies all jockeying for prime land.

 

For the SE, broadly speaking, a slow uptrend or steady annual home starts number might mean more deferred harvests. Or, as Sam Radcliffe keenly observes, it could see large investors in the timber REITs clamor for unlocking value in other ways (M&A). 

 

I'm not so sure Wall Street is keen to pursue hostile take-over & unwinds of such varied assets as the timber REITs. Why? The public / private valuation per acre spread that Sam notes isn't a simple thing to arbitrage. It would take loads of capital--and even more time.

 

Even if one stores value on the stump during the liquidation of hundreds of thousands of acres, such a wave of sales would surely depress prices in the short-to-intermediate term. I suppose the cost savings from downsizing from a public REIT (bye-bye investor relations staff, a huge HR department, etc.), might help--especially if one chops the salaries of those in charge of this mighty unwind.

 

But, the purchase and profitable parsing of a huge timber REIT is beyond what most I-banks are equipped to do these days. Those guys would much rather play stalker to unprofitable start-ups in Palo Alto for a chance at the next hot IPO. Wall Street gets much higher fees for crafting myths and telling tales about unicorns, than it does for selling transparent, sober businesses like forest product concerns. 

 

Thanks again to Mr. Sam Radcliffe (prentissandcarlisle.com) for starting yet another interesting discussion. I'm sure it's one we'll revisit again in the future.

 

JDB

 

 PS. If any bankers happen to read this, and want to pitch buying / unwinding a timber REIT, don't hesitate to get in touch. I'm looking for a job at present, and would be happy to consult on such a massive undertaking. Seriously.

 

 

 

 

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Pope Resources CEO Nunes quits to run Rayonier

Pope Resources CEO Nunes quits to run Rayonier | Timberland Investment | Scoop.it

David Nunes, CEO of Poulsbo timberland management company Pope Resources, is quitting to become CEO of forest products company Rayonier Inc.


Pope Resources said current CFO Thomas Ringo, who has been at the company for 25 years, will serve as interim CEO.


"Dave has positioned us well to continue growing, and we have already begun a search for the right person to replace him," said Pope Resources lead director Douglas Norberg, in a statement.


Pope Resources (NASDAQ: POPE) owns or manages 204,000 acres of timberland and development property in Washington, Oregon, and California.

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Stars align for NZ foresters as 'wall of wood' comes on stream, prices reach record highs

Stars align for NZ foresters as 'wall of wood' comes on stream, prices reach record highs | Timberland Investment | Scoop.it

New Zealand forest growers, long overshadowed by booming returns from the dairy industry, look set to cash in on record prices for logs as they prepare to harvest trees planted in a flurry of activity two decades ago.


Forestry plantation activity in New Zealand jumped between 1992 and 1998, as a surge in Asian log prices lured investment syndicates to the sector. Radiata pine, which makes up about 90 percent of the nation's plantations, are typically felled between 26 and 32 years, meaning the "wall of wood" will start being harvested from about 2018, according to government figures.
***
China is underpinning New Zealand commodity price strength as Asia's largest economy undergoes urbanisation, growing incomes and demand for better housing, says ASB rural economist Nathan Penny.


Forestry exports to China rose more than 50 percent in 2013, putting New Zealand ahead of Russia as the biggest seller of logs into that market. Russia's log exports have dipped as a result of an export tax aimed at stimulating its domestic timber processing industry. At the same time, shipments from the US and Canada have dwindled as demand picked up in their home markets.
***
While an increase in supply in coming years may put some pressure on prices, foresters have the ability to stagger harvests and continued Chinese demand is likely to underpin the sector, Penny said.
***
Increased demand in New Zealand from the rebuilding of earthquake damaged Christchurch and a surging Auckland housing market are also adding to wood demand and supporting prices, Penny said. New Zealand exports of logs and wood surged 22 percent last year to $3.86 billion. In comparison, meat exports rose just 2.2 percent to $5.28 billion and dairy exports increased 17 percent to $13.4 billion. The Wood Council of New Zealand, which represents forestry and wood processors, aims to triple export earnings to $12 billion by 2022.

***
The New Zealand Superannuation Fund partnered with Harvard Management Company, the endowment fund of Harvard University, and the Public Sector Pension Investment Board, Canada's largest pension investment managers, for the harvesting rights to the 178,000 hectare Kaingaroa Forest, New Zealand's largest plantation forest and one of the largest contiguous plantation forests in the Southern Hemisphere.

The NZ Super Fund valued its 41.25 percent stake in Kaingaroa at $1 billion as at June 30, saying it has delivered an 18.05 percent return since it was purchased in 2006.


Other large plantations are owned by US-based Hancock Natural Resource Group, the world's largest timberland investment manager which bought 260,000 hectares of forests from Carter Holt Harvey, and Matariki Forests, a consortium managed by US-based Rayonier which owns 130,000 hectares of forests, according to Forest Owners Association records.


Demand for logs from China is hurting the local sawmilling industry as forest owners send their logs overseas rather than sell them to local processors, according to the New Zealand Timber Industry Federation.


Some 40 sawmills have closed since 2003, according to the New Zealand Forest Owners Association. In October, the Tachikawa Forest Products sawmill in Rotorua was put in receivership with the loss of 120 jobs.

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Rayonier Elects Lynn Wilson to Executive Vice President

Rayonier Elects Lynn Wilson to Executive Vice President | Timberland Investment | Scoop.it

Rayonier (NYSE:RYN) today announced that its board of directors has elected Lynn Wilson to the position of Executive Vice President, Forest Resources.


"Since joining Rayonier, Lynn has led the successful integration of multiple acquisitions, assumed responsibility for our international forestry operations and driven our Forest Resources business to greater levels of operating efficiency," stated Paul Boynton, Chairman, President and CEO. "This new title appropriately reflects Lynn's recently broadened global leadership role and her sustained success in leading our forestry operations."


Wilson is a member of Rayonier's senior management team and is responsible for 2.6 million acres of timberland in nine states and New Zealand. She's also responsible for the administration of Rayonier's Land Information Services and leadership of the company's timberland acquisition team. Prior to joining Rayonier, she served as Vice President, Operations Support with Plum Creek -- a position she reached after holding a variety of responsibilities, including company Logging Superintendent, Senior Resource Manager and General Manager. Her forestry career spans more than two decades.


Wilson holds a bachelor's degree in forest management from the University of Maine. She also graduated cum laude from Thomas College in Waterville, Maine, with a master's of business administration.

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