Matariki seeks clearance to buy Selwyn forests

23 June 2011

The Commerce Commission has received an application from Matariki Forests for clearance to acquire the forestry assets of the Selwyn Plantation Board.

The clearance application relates to both parties' involvement in the supply of saw and pulp logs in Canterbury. In considering the application, the Commission's role is to determine whether the acquisition has the effect of substantially lessening competition in a market.

Matariki Forests is New Zealand's third largest forestry company and owns exotic forests throughout New Zealand. It is the largest forest owner in Canterbury.

Matariki Forestry Group is managed by Rayonier New Zealand, a subsidiary of Rayonier Inc. Rayonier provides a full range of forestry services from establishment and silviculture through to harvesting and marketing, and a full service export marketing team.

The Selwyn Plantation Board (SBPL) owns exotic forests in Canterbury and is owned by the Selwyn District Council (60%) and Christchurch City Council (40%).

The forest estate of SPBL is managed under Forest Stewardship Council (FSC) certification. The total stocked area of 4600 hectares comprises around 3500 ha freehold and around 1100 ha held in a deed of licence. Eighty three per cent of the land is planted in radiata pine and approximately 15% in Douglas fir. The management of SPBL's Forest Estate has been outsourced to P F Olsen Ltd since 2008.

If the proposed acquisition does not take place, Matariki says in its application that it believes SPBL Forest Estate will be sold to a third party [as a] decision is understood to been made by Selwyn District Council and Christchurch City Council to sell all their assets from SPBL and liquidate the company. Matariki understands that the next bidder in line to purchase SPBL's Forest Estate was a buyer based out of Asia.

"There is a strong possibility that, if this other buyer had been successful, the great majority of the logs sourced from the SPBL estate would have been exported out of New Zealand," says the application.

"The likely effect of a purchaser of the SPBL Forest Estate 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. This compares with Matariki which only exports around [withdrawn] per cent of its logs from Canterbury, and expects to continue to adopt this approach post-acquisition."

A public version is on the Commission's website.

Source: Commerce Commission