Forestry expansion approved

Two foreign-owned forestry companies with southern interests have received approval from the Overseas Investment Office (OIO) to purchase new holdings in the North Island and Southland.

Ernslaw One Ltd, owned by the Tiong family in Malaysia, has one of the largest forestry interests in Otago and has been granted permission to buy forests, a sawmill and pulp mill in the Taranaki and Wanganui regions for $117.2 million, composing respectively 3895ha and 10,058ha of forestry holdings.

Under the deal Ernslaw, which owns Blue Mountain Lumber sawmill in Tapanui and supplies 90% of its product to the domestic market and 10% in exports, will acquire Winstone Pulp International and the Tangiwai sawmill and several forestry assets in the Wellington and Taranaki regions.

"The investment will provide Ernslaw One with a greater wood supply security for wood processing and provides greater opportunities for synergies and economies of scale between Ernslaw One's and Winstone Pulp's operations," the OIO decision sheet for March reported.

Craigpine Timber Ltd, which is 81.04% owned by three Australian interests and operates a sawmill in Winton, Southland, has been granted approval for the 100% purchase of 400ha of forestry near Dipton from Pinnacle Pine Forest Partnership for $900,000.

Craigpine has already begun harvesting work on 35.5ha of the area, under an agreement to purchase the forest crop for its sawmill.

The company would purchase "increments" of Pinnacle Pine Forest during the next eight years to harvest and mill the forests and also replant the forestry.

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