Forest body welcomes $60m deal

THE Forest Industries Association of Tasmania has welcomed a Government deal to sell 29,000ha of pulpwood plantations to Reliance Forest Fibres for $60 million.

Association chief executive Terry Edwards said the $60.7 million investment by a new player in Tasmania’s forest industry reflected positively on the sector.

Mr Edwards said the company’s parent company, Global Forest Partners, was a well known and highly respected player in the national and international forestry sectors.

Global Forest Partners is an international forest investment advisory firm with global holdings in Australasia and Latin America, and has held investments in Australia since 1999.

Mr Edwards’ comments came as Resources Minister Guy Barnett visited some of the plantations in Nunamara outside Launceston yesterday.

Mr Barnett told reporters that independent advisers had estimated a sale price of between $1500 and $2000 per hectare, and the $60.7 million deal was “at the top end of the expectation and it’s a great result”.

The Government plans to put $15 million of net proceeds from the sale into Tasmania’s health system.

“For the first time in living memory Sustainable Timber Tasmania, formerly Forestry Tasmania, has been able to reinvest into our health system,” Mr Barnett said.

The sale of the plantations and restructure of Forestry Tasmania into Sustainable Timber Tasmania were listed as risks to the State Budget, because it was unclear whether proceeds from the sale would be enough to cover the costs of the restructure.

The Government has previously said the restructure would deliver a $30 million improvement to Sustainable Tim- ber Tasmania’s bottom line.

Mr Barnett said the remaining $45 million would cover restructure and transition costs.

“Once the transition is complete, and resource security for the industry is secured, STT will operate sustainably,” Mr Barnett said.

Labor and the Greens have criticised the plantation deal, with Labor leader Rebecca White calling it a “fire sale” and Greens leader Cassy O’Connor calling it a “rip-off.”

Both argued the plantations were worth substantially more than the figure obtained by the Government, and the $60.7 million amount was less than the cost of establishing the assets.