Gunns trees destined for Asian markets

THE new owner of vast tree plantations previously held by failed timber company Gunns will focus on exporting the resource as woodchips and is sceptical about prospects for a pulp mill in Tasmania.

Receivers KordaMentha yesterday announced Sydney-based timber investment fund New Forests had purchased almost 100,000ha of Gunns’ plantations, two export woodchip mills and port access, as forecast by The Australian last week.

New Forests, which bought the assets in a competitive process, was not interested in buying Gunns’ permit to build and operate a pulp mill in the Tamar Valley, for which the plantations had been intended as feed-stock.

KordaMentha said it would continue to negotiate with several parties that had expressed an interest in the pulp mill permit and is expected eventually to find a buyer. However, any proponent of the $2.5 billion project would now need to secure a wood supply agreement with New Forests for all of the 100,000ha, in addition to a further 100,000ha held by a variety of entities.

New Forests chief executive David Brand said his company — understood to have paid about $330 million for the Gunns assets — would focus on chipping the plantation timber and exporting it to Japan, China and India. Dr Brand was sceptical about the economics of the controversial pulp mill proposed by Gunns, which sank into liquidation in March last year after being placed into administration in September 2012.

“A lot of pulp and paper companies that are listed are trading at below their net asset value, so why would someone invest in new pulp mills?” Dr Brand said.

“People have been talking about someone investing in the (Gunns) pulp mill for 10 years, but it hasn’t become a reality.”