OneFortyOne will take over a 15,000-hectare timber estate in Southern Australia, in what is the biggest forestry sector acquisition by an Australian-owned firm in over a decade. The deal—rumoured to be worth as much as $300 million, according to the Australian Financial Review—will increase OneFortyOne’s plantation estate by as much as 15% and secure future sawlog supply, which, according to the big super-owned OneFortyOne, will help build Australian homes for decades to come.
“Getting the opportunity to buy new resources right near where there’s a big ecosystem of sawmills in the Green Triangle area – that ticks all the boxes for us,” Wendy Norris, OneFortyOne chief executive, told The Australian Financial Review. “The Green Triangle region supports South Australia, some of Victoria and parts of NSW – it supports the biggest population centres in this country for their housing construction needs.”
The Green Triangle – which covers southeast South Australia and southwest Victoria – is renowned for its timber plantations, which began in the region more than a century ago. Thousands of hectares are planted with softwood and hardwood plantations. The region’s processing industry includes pulp and paper manufacturing, sawn timber, wood panels, and woodchip export.
OneFortyOne, created in 2012 through privatising a 105-year lease over 80,000 hectares of South Australian plantation assets, is owned by several super funds, including Future Fund, Aware Super, and T-Corp. US pension and other offshore funds hold 40% of OneFortyOne’s holdings. Speaking to the AFR, Norris said her colleagues are already looking decades ahead to meet Australia’s future demand for structural timbers:
“The processing capacity is available right now, our intention is to support market needs out to the 2050s and beyond. So the decision we’ve made today, and the excitement about this acquisition, is that it supports the industry in the long term.” Norris said. “We’re here, as an Australian company, to support the domestic timber processing that underpins housing construction well into the middle of this century.”
“We think [this acquisition] lines up beautifully with both federal and state government objectives to support domestic processing and build more houses in Australia.”
According to the AFR, OneFortyOne’s timber plantations, both in the Green Triangle and in New Zealand, generated $584 million in revenue for the 2023-24 financial year, with close to 80% of its Australian production sold into the local market.
“The best and highest value you can get from trees is to use them as close to the source as possible,” Norris said. “Whenever there’s a market in Australia, it will be better for us to sell them domestically. Otherwise, we’re transporting a whole log to some other jurisdiction, and that doesn’t make sense. For the structural timber, its highest and best use is to stay in Australia.”
Another key element of the Limestone acquisition is the potential to generate carbon credits from the new plantation, after South Australia retained rights to credits over the original plantation: “It’s a really important part of our economic decision before we replant. These types of credits generated are a high-quality, highly sought-after subclass of carbon credit,” Norris said.
Australia has access to all the structural timber it needs, according to ABARES.
In March, Wood Central reported that Australia has reliable access to structural timber needed to build housing for current and future demand, according to the Australian wood volumes analysis published by ABARES – the science and economics research division of the Department of Agriculture, Fisheries and Forestry. For Dr Jared Greenville, Executive Director of ABARES, the findings show that demand for much-needed structural timber will increase exponentially over the coming decades:
“On the supply side, the report indicates that Australia’s domestic log availability is projected to increase by approximately 70 per cent through to 2055 with a record availability of 16.8 million cubic metres per year of softwood sawlogs for residential construction in 2050-2054.”
“Australian plantation managers are working hard to maintain and optimise log availability, and they are working alongside mills to increase the output and variety of timber products available to the domestic market,” Dr Greenville said.
- For more information, click here for the most recent Australian wood volumes analysis.
