Timber plantation land could hold riches, but buyer beware
TIMBER plantations formerly owned by bankrupt timber plantation company FEA Enterprises in the Kyogle Shire offer a potential economic windfall for the region, but require urgent attention, according to a local spokesman from the Upper Clarence catchment.
The administrators of the company, which went into receivership in 2010, have invited expressions of interest in more than 40 properties in the Kyogle region which close on January 24 next year.
Mostly located west of the Richmond Ranges around Tabulam and Bonalbo, the properties cover 25,000ha of land with 11,500ha of plantation.
Kyogle Council has since set up a timber industry reference panel to help investors interested in buying the properties.
The panel includes forestry academics, researchers and commercial operators who can give advice and assistance on turning the plantations into productive assets.
Terry Moody from Upper Clarence Landcare estimated at least 50% of the plantations were salvageable, but needed urgent thinning to ensure the maturation of the best trees.
"They've been in receivership for three years and in that time there's been no management of the forests," Mr Moody said.
During a pre-GFC glut of investor capital, FEA purchased thousands of hectares of property and planted a range of different hardwood species.
"The spotted gum in particular is a really versatile timber ... there's definitely a market for it. Floorboards and decking are the highest value, but you can use it for just about anything," Mr Moody said.
Mr Moody predicted the gross revenue from a good hectare of spotted gum plantation at $240,000, with "three-quarters of the expenses" already paid, and halfway through the maturation period. "All the access roads are already done and a lot of the properties have gravelled roads."
"But it's going to require an investment now, and professional advice," he said.
The land is expected to be sold far cheaper than the $7000 per hectare FEA paid at the height of its investor-capital fuelled buying spree; possibly as low as $200-$400 per hectare.
For unsalvageable plantations which would need to be removed, Mr Moody caut
ioned there would be environmental concerns.
"There are potential water flow issues, carbon emissions, and in some cases threatened species have moved in," he said.