Farm sales to overseas owner still rankles with locals

MATT RILKOFF
Last updated 05:00 22/08/2014

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The overseas investor behind the controversial $5.69 million purchase of four East Taranaki farms in 2012 for forestry development expects to make $253m when they process the trees in 25 years.

Approved by the Overseas Investment Office (OIO) in April 2012 the sale of the four properties still rankles with some Whangamomona farmers who wished to buy the properties themselves and claimed the community would be destroyed by the new land use.

That they have still not met the as yet unidentified buyer who has links to both Austria and the United Kingdom, is a sore point as two of the properties are being leased back to farmers and remain unplanted more than two years since they were sold.

However, Rob Webster, of NZ Forestry Ltd, which is managing the project that will see the back-country farms planted in walnut species and Californian red woods, said everything was progressing as planned.

"It is progressing in line with expectations. In fact, over the past couple of weeks two of our staff have been in the Whangamomona/Tahora area managing this year's establishment operations, which will continue for the next week or two," he said.

In the investor's application to buy the land it was stated they would spend $600,000 on land preparation in the first five years after purchase, $2.8m on forestry establishment in the first four years, $4.39m in the 28 years after purchase in tending to the forests and $5.4m over 39 years in maintenance, insurance, management and administration.

They have also committed to spend between $40,000 and $50,000 by 2016 on 4.1km of horse tracks and 6.4km of bike trails through the forests.

The investor expects its first round of harvesting to produce a sawlog production volume of 1,555,000 cubic metres.

Fifty per cent is likely to be exported in log form and the rest processed in New Zealand.

Total revenue, after expenses, is expected to be $253m, with harvesting planned to commence in 2037.

Webster confirmed it was the investor's long-term plan to live in New Zealand but it would probably not be in Whangamomona.

In its decision to allow the purchase the OIO estimated the deal would generate an extra 4.5 fulltime equivalent jobs than if the land continued to be used for sheep and beef farms. They also estimated the operation would return a per hectare pre-tax profit of $220 to sheep and beef's $86.

Annelies McClure, acting deputy chief executive of Crown Property, said the buyer of the land had so far complied with the conditions.

"It should be noted that there are a number of conditions imposed by the OIO which only require a report to be filed in 2015/2016," she said.

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- Taranaki Daily News

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