Christchurch City dumps assets

Christchurch City will reap the benefit of 40% of the sale of the Selwyn Plantation Board.

The other 60% is held by Selwyn District for its share in a deal which sees Matariki Forests acquire the assets.

The assets  include forest of 4600ha with 3500ha of it freehold and around 1100ha leased. The majority is planted in radiata pine (83%) with the remainder mainly Douglas fir.

The Commerce Commission yesterday gave the go ahead for the sale.

The Commission was satisfied the acquisition will not substantially lessen competition in the mid and north Canterbury markets for the supply of pulp logs, industrial logs and structural logs.
Matariki Forests is New Zealand’s third largest forestry company, largest forest owner, and third largest supplier of logs in Canterbury. It is owned by funds and forestry managers including US-based Rayonier.

The acquisition would give Matariki and increased market share in the Canterbury/West Coast region for unpruned sawlogs and pulplogs between 2012–2015, 2016–2019 and 2020-2023.
Matariki told the Commission that Selwyn District and Christchurch City Council had decided to sell the assets and liquidate the company.

The next bidder in line was an Asian buyer, Matariki said.

“If this other buyer had been successful, the great majority of the logs sourced from the estate would have been exported out of New Zealand. The likely effect of a purchaser exporting its logs outside New Zealand would be to reduce available supply for domestic volumes in both unpruned sawlog and pulplog grades in the Canterbury/West Coast region.”

Matariki is also committed to hand back forestry land to Ngai Tahu after harvest as part of the Treaty settlement process.

Canterbury Matariki's domestic harvest volume has been declining since 2006 because less mature forest was becoming ready for harvest, compounded by…the hand back of the Eyrewell and Balmoral Forests in Canterbury to Ngai Tahu as these forests are harvested.

“Originally this was to take place with a hand back date of 2020, but this hand back date has now been brought forward to the annual harvest date (according to the lease conditions).

“This current year the additional hand back is approximately 220 ha (it was 3000 ha in 2010); and the hand back of leasehold block as it is harvested in the Journey’s Endblock of Ashley Forest. This is to be handed back by 2019.”

The Commission assessed whether the merged entity would be constrained by the hand back of forestry land to Ngai Tahu under Treaty settlement agreements.