Senior editor Jim Bowden published this report 29 years ago, which signalled Carter Holt Harvey’s move to rebuild its Australian forestry holdings and timber processing interests across the Tasman
New Zealand timber giant Carter Holt Harvey Ltd has acquired South Australian softwood processor Forwood Products Ltd for $130 million in a deal that forms a second key plank in its strategy to rebuild its Australian forestry holdings and timber processing interests.
Carter Holt’s purchase of Forwood from the SA government signals the company’s return to timber processing in Australia following the $48 million sale of Sapfor Ltd in 1988 to Auspine Ltd.
Now Auspine, capitalised at $174 million with its own softwood forest resource and timber processing operations near Mt Gambier, where Forwood is also based, is likely to be a key target of the acquisitive Kiwi timber group.
Last year, Carter Holt acquired the Bowater tissue business at Myrtleford in Victoria for $340 million as part of plans to expand its reach in Australia. Carter Holt is New Zealand’s second-largest company and is 50% owned by the US-based giant company International Paper. It is part of a consortium bidding for the NZ government’s forestry assets worth $1.5 billion.
Carter Holt’s chief executive, wood products, Peter Springford, said the company was keen to participate directly in the Australian market with increasing timber self-sufficiency thinnings an opportunity for NZ exports.
Springford said Carter Holt would spend $30 million on a capital expenditure plan at Forwood’s Mount Gambier operations and was particularly interested in developing its expertise in laminated veneer Lumber (LVL).
The SA Treasurer Stephen Baker said $108 million of the $130 million sale proceeds would be used for debt reduction and lifted the total of asset sales by the SA government in the past two years to $1.8 billion.
Forwood Products reported a profit after tax and before of $13.9 million on sales of $136.2 million in the year ended June 30, 1995. It employs about 900 people.
No figures are available for 1995-6, which was a horrendous year for timber company profits due to falling lumber prices and stagnant housing demand.
Forwood was spun out of the South Australian Timber Corporation three years ago.
The Forwood purchase includes a contract with the SATC to take 450,000 to 500,000 cubic metres of saw log from the SA government forest over the next 15 years, with a 15-year option.
Carter Holt now joins Auspine and Australia’s largest softwood timber group, CSR Softwoods, as the major player in the Green Triangle region of South Australia and Victoria.
