Māori forestry firm claims regional development stardom

11:44 am on 14 October 2017

A Māori forestry company in Northland is urging politicians to use it as a model for future regional development.

Tree felling

The 4300 hectares of forest generated a $73m profit Photo: 123RF

Taitokerau Forests Limited was founded in 1986 when the then Labour government agreed to advance mortgage finance to grow trees on marginal Māori land in the north.

The owners of 14 blocks scattered across the region set up a company and began planting.

Thirty years on, most of the trees have been harvested and the government loan repaid, with interest.

Taitokerau Forests chair Rawson Wright, of Ngāti Whātua, said in retrospect it was a brilliant scheme and remarkable for the collaboration of the many hapu and iwi groups involved.

"The company structure was strong; iwi politics was set aside at the board table," he said.

A report on the company's fortunes, reviewed by economic analysis firm BERL, said Taitokerau Forests was a regional development success story.

The 4300 hectares of forest planted in pines, generated an income of $236 million in log sales, and a profit of $73m.

Of that $61m had been paid back to the government and $10m to the Māori landowners.

Over the 30 years, the Māori owners had also benefited from land rentals and the company had paid rates to local councils.

The landowners' overall income will be $27m by the time the company winds up in 2020, and the scheme created the equivalent of 29 full-time jobs over its lifetime.

Mr Wright said other benefits were that land that was marginal and useless for anything else had been productive and landowners as shareholders, had gained skills not just in forestry but in business.

The secretary of the company from day one has been Warwick Syers, a Whangārei chartered accountant.

Mr Syers said Taitokerau Forests had also been a pretty good deal for the taxpayer.

"It hasn't cost the taxpayer anything," he said.

"The Crown has had a return on its money of just over 4 percent, which in today's market is most acceptable. They [the Crown] will be getting repaid $61m for having lent us $31m."

Warwick Syers said it had been touch and go at times over the company's 30-year history, when more money was needed for pruning, and log prices were fluctuating.

The National government in the 1990s saw risk in the scheme, and had refused a planned expansion. But it had agreed to limit the company's liability to the value of its assets, preventing technical insolvency at one point, Mr Syers said.

Taitokerau Forests was formed for just one rotation - one generation - of trees, but has set the landowners up with the roads and infrastructure needed for the future.

Pita Tipene, a Ngati Hine leader, is concerned about hapu members from overseas, who are out of the loop, being nominated for seats.

Pita Tipene Photo: RNZ

The company said most would plant again, and while the company wouild wind up, the collaboration of landowners continued under the umbrella of the more recently-formed Taitokerau Māori Forestry Collective, made up initially of 10 Māori land entities.

Chair of the Ngāti Hine Forestry Trust, Pita Tipene, said the challenge for many of the larger Māori landowners was to find the capital to plant or, in Ngāti Hine's case, to replant.

"So far our TTF [Taitokerau Māori Forestry Collective] collective has got up to 53,000 hectares in it - which is a huge foundation for any potential investor with certainty of supply, but at the moment we are all in the same boat, that we don't have the capital [to plant]."

Mr Wright said just 20,000 hectares would create an economic forestry company. His challenge to any incoming government wanting to create regional development, would be to scrutinise the BERL-reviewed Taitokerau Forests report, and use the scheme as a model for a bigger and better one.

"I'm passionate about this - I'd prefer to keep such a company in Tai Tokerau - but if it means going down to Auckland to capture a better collective, then so be it. Maybe we could do something with Māori landowners nationwide," Mr Wright said.

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