Forestry investment confidence creeping back

The chief executive of Willmott Forests believes the forestry investment sector is recovering from the damage caused by the collapses of Great Southern and Timbercorp, with expectations the forestry MIS market will rise to more than $300 million over the coming year.

Chief executive Marcus Derham said it was Willmott Forests’ view that 2009 was “about as bad as things can get” in terms of market sentiment for forestry managed investment schemes, following the collapses of competitor agribusiness companies Timbercorp and Great Southern.

Derham said 2009 saw “approximately $220 million of forestry investment, which was significantly down on the previous-year high of around $750 million”.

But the group believes that “some level of recovery” is on the way, with expectations the market forestry investment market will rise to more than $300 million over the coming year.

Derham made the comments in a Boardroom Radio Australia interview, posted on the Australian Securities Exchange in preparation for the group’s equity raising.

The group last raised equity in 2005, and Derham said the purpose of the offer is not to retire debt but to provide working capital and fund opportunities for growth.

Derham said Willmott Forests is looking to increase its market share in the forestry investment arena, with the group holding around 30 per cent of the market in 2009.