Investment Trends Conference & 4th Global Wood Fiber Conference

Overview of International Timber Investment Trends

How Does Latin America Fit Into the Global Picture?

• Most country's forest products industries grew initially from the exploitation of government owned native forests. However many countries have now effectively banned or severely restricted the harvest of government- owned native forests, including Chile, Brazil, New Zealand, Australia and the US Pacific Northwest.
• A small number of countries still have major government owned plantation forests: e.g. some Australian states, South Africa, New Zealand and UK, but even many of these are in the process of being sold.
• A change in tax laws in the United States and the demands of Wall Street for forest products companies to monetize their timberland assets has, since about 1985, lead to a wholesale transfer of timberlands ownership from forest products companies to "financial owners". This process has also occurred earlier in Chile, and later in New Zealand; and the transfer from Government to financial owners in Australia.
• In 2009 there were more than 30 financial timberland ownership organisations, and probably more than 50 counting recently incorporated funds in Europe and Latin America.
• Financial ownership of New Zealand and Australian timberlands now totals about 60% of all non- North American assets by area, and may soon be 70%.
• Latin American forest products companies (mainly in Brazil and Chile) have resisted this wholesale sell-off of timberlands to financial investors. However some transactions have recently been completed.
• Many Latin American, North American and European financial investors have been investing in (non FP) Latin American land and trees for the last decade or so, and this has been accelerating.
• Financial investing in Chile has been limited because of the influence in the market of the two giants Arauco and CMPC.
• Uruguay has been a major recipient of financial investments from various TIMOs and funds in the last decade, but rising land prices may limit further growth.
  
• Brazil has become a "sizzle country" for financial investment in the last few years, for softwood and hardwood sawlog plantations, and for pulpwood and biomass plantations. However recent deals have substantially increased land price expectations, and may make returns for future transactions in the industrialized south more problematic. Investors are now starting to look at cheaper land opportunities in the north.
• Financial investment organisations are now starting to establish/buy plantations in "non traditional" countries such as Guatemala, Mexico and Panama.

Speaker

• Mr Dennis Neilson, Director, DANA Ltd., New Zealand

What are European Investors Looking for in Latin American Timberland Investments?

• The culture of European timberland investing.
  
• European Investors: a thumbnail sketch.
  
• Are European investors’ preferences different from US investors?

Speaker

• Ms Liane Luke, Director, Four Winds Investments, USA

Brazil Timberland Investment Trends

• In Brazil, forest plantation competes with agriculture and cattle pasture for land.
  
• There is now some decoupling between timberland valuations and the economics of timber production.
  
• Forest product industry is very vertically integrated, a self-feeding perpetuation: potential investors are not attracted because the industry is mostly self-sufficient, the industry can not buy timber in the market, because the little independent production.
  
• TIMOS are the liquidity provider for the forest plantation owners, either integrated or independent

Speaker

• Mr Claudio Ortolan, Director of Business Dev., Brazil, GFP, Brazil

Frontier Latin America Timberland Investment Trends

• New fronteirs for forest investments in Latin Amerida.
  
• Recent investments and relevant stackholders.
  
• Supra, Inter and Intra sectorial factor that may limit investments.
  
• How to improve business climat and atract forest investments.
  
• Perspectives.

Speaker

• Mr Ivan Tomaselli, Partner, STCP, Brazil

Appraisal Issues with Timber Investments in Latin America

• Which of the several competing appraisal standards should be followed by timberland appraisers?
  
• What are the best timberland appraisal analytics?
  
• Tree growth and yield projections versus land values – Should, or perhaps can, land values be carefully supported by forest engineers? Should real estate appraisers value forests?
  
• What is the cost approach and is it appropriate in timberland valuation?
  
• How can an appraiser do sales comparison analyses when investors won’t share acquisition data?
  
• What are the most acceptable ways to perform timberland discounted cash flow analyses?

Speaker

• Mr Jeff Wickle, President, TerraSource Valuation, USA

Afternoon tea

Panel: Opportunities for Investment in Latin America, Introduction of New Projects

Jefferson Mendes, Director Executivo, Silviconsult Engenharia, Brazil

Panel: Opportunities for Investment in Latin America, Introduction of New Projects

Luiz Ramires, Diretor Técnico e Comercial, Ramires Reflorestamentos Ltda, Brazil

Panel: Opportunities for Investment in Latin America, Introduction of New Projects

Daniel Maradei, Director, Maradei, Pike y Asoc, Argentina

Networking Reception