Overseas investment decision for case 200810028 - Pacific Trees Limited

To acquire:

1. an interest in land which, either alone or together with any associated land of that type, is or includes non-urban land and exceeds 5 hectares in area; and
2. an interest in land which, either alone or together with any associated land, exceeds 0.4 hectares and adjoins any scientific, scenic, historic, or nature reserve under the Reserves Act 1977 that is administered by the Department of Conservation and that exceeds 0.4 hectares in area.

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individual with control of the Applicant has business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that the individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Outline of the Investment:
Pacific Trees has entered into an agreement for sale and purchase to acquire the relevant land from East Woodlands Limited (East Woodlands). The relevant land contains approximately 367.8 hectares of radiata pine forestry established during 1985 to 1988.

Vendor's Background:
East Woodland's principal business activity is the granting of forestry rights to individuals for the purpose of planting, managing and harvesting commercial forests. The relevant land is subject to two forestry rights in which areas of land are progressively returned to East Woodlands in a cutover state as the trees are harvested. East Woodlands have sought to identify and negotiate new forestry rights for the replanting of the returned land area but have been unable to do so.

Rationale for the Proposed Investment:
East Woodlands has agreed to sell the land to Pacific Trees, subject to one forestry right (it is intended that the other forestry right will be surrendered prior to settlement of the sale to Pacific Trees). Pacific Trees intends to replant the forest as parts of the property are handed back to Pacific Trees under the current forestry right. Pacific Trees' primary objective is to diversify into other forestry species including Coast Redwood, Mexican Cypress and Blackwood. Pacific Trees advises that these species will be established following the harvesting of the current forest rotation during 2012 to 2015. Pacific Trees believes that these species will produce high value decorative grade timber for which there are both domestic and export opportunities.

The proposed overseas investment is or is likely to benefit New Zealand (or any part of it or group of New Zealanders) having regard to the following factors (or parts of them):

Overseas Investment Act 2005:
s17(2)(a)(i) - Creation/retention of jobs;
s17(2)(a)(v) - Additional investment for development purposes; and
s17(2)(e) - Walking access.