The Global Timber Supply Gap
There is an increasing gap between world supply and demand of timber. Globally, the annual deficit in sawn softwood and hardwood timber is predicted to reach 55 million tonnes and 10 million tonnes respectively by 2010.
The depletion of forest cover in the Asia-Pacific region coupled with increased environmental awareness has turned the wood products trade balance in many countries from a surplus to a deficit.
Coupled with the rising affluence of these regions the deficit in timber production seems likely to rise, further increasing the value of timber products.
Funds Focus investment offer
Forest Enterprises Australia Ltd (FEA) provides what we believe to be one of the best opportunities to access this fast growing sector. First and foremost a forestry company for 23 years, FEA packaged their first retail Managed Investment Scheme in 1993 as a way of sourcing wood for potential future milling.
Since its first offering in 1993, over 8,500 investors have established over 50,000 hectares of FEA eucalypt hardwood plantations in Tasmania, North Coast New South Wales and South East Queensland.
Having distributed its final harvest for the 1993 project in June 2008, FEA are able to demonstrate what most Agribusiness providers have yet to provide, a winning track record. Furthermore, when the thinning and estimated clearfall harvest proceeds are discounted back to 1993 dollars, the total return was more than 50% higher than original 1993 dollar per hectare estimates. The return achieved was a pre-tax return of 12.4% per annum.