24 October 2019
The first forestry standing consent has been granted since new rules for overseas investment in the forestry industry were introduced in a year ago in October 2018.
The application was from Pan Pac Forest Products Limited, a forest products company mainly based in Hawke’s Bay. Its business includes growing, processing and marketing timber, and it produces lumber at its Whirinaki and Milburn processing plants.
Standing consents are available under the special forestry test and are a form of pre-approval. They allow investors to settle multiple transactions to acquire forestry assets without applying to the Overseas Investment Office (OIO) in advance. The applicant needs to notify the OIO once a transaction has been settled, at which time additional conditions may be imposed.
Applicants must meet strict criteria to be eligible for a standing consent. Only quality investors with a proven track record, detailed business plans, and processes to ensure they comply with conditions of the standing consent will be granted a standing consent.
Pan Pac’s standing consent will permit it to acquire up to 20,000 hectares of land. The standing consent will expire on 1 October 2022 and can be used for up to 25 transactions. It can acquire interests in either existing forestry land, forestry rights or land to be used as a farm to forestry investment.
Pan Pac already has interests in single rotation forestry rights, so it is likely some of the land being acquired under this standing consent will be used to maintain its existing forestry estate. It is expected Pan Pac’s existing forestry land and the new forestry land will be used to secure raw material for its local processing plants.
Ministers decide on applications for forestry standing consents. This application was decided on by the Associate Minister of Finance, David Clark, and the Minister for Land Information, Eugenie Sage.
During September 2019, nine forestry consents were issued, including the standing consent to Pan Pac. Four of the September consents relate to land that is already mostly in existing forestry. Three of the nine consents relate to land already owned by overseas investors.
Further information about the nine forestry consents granted in September will be released at the end of October when the OIO releases the September decisions.
Email: firstname.lastname@example.org or phone: 027 566 5251