The Australian forestry manager aims to develop an integrated and scaled investment allocation in the only landlocked country in Southeast Asia.
New Forests, a global investment manager focused on nature-based assets and natural capital strategies, has bought a majority stake in Burapha Agro-Forestry, a timber plantation forestry company in Laos, through its second Tropical Asia Forest Fund (TAFF2).
The deal, the third takeover by TAFF2, was led by New Forests, with a co-investment from Mirova, a Paris-based sustainable global asset manager. Mirova, a unit of Natixis Investment Managers, made the co-investment through its Sustainable Land Use strategy. No financial details were disclosed.
New Forests said the acquisition formed part of its aim to develop an integrated and scaled investment allocation in Laos.
“We are delighted to be growing our allocation to Laos through this investment in Burapha Agro-Forestry, which is already highly regarded for its agroforestry and wood processing processes and local community engagement work,” said Geoffrey Seeto, senior managing director of New Forests Asia.
Export hub
A country of 7.7 million inhabitants, Laos is located close to several large importers of plywood such as India, South Korea and Thailand, which makes it well suited to become an export hub for forestry and wood-based products, according to Dutch development bank FMO. Apart from being located near some of the world’s fastest-growing economies, Laos also has an abundance of land available and a relatively small population.
“Laos’ availability of land, combined with possessing highly conducive biological growth conditions, and being strategically located in near proximity to areas of significant wood deficit, makes it an attractive investment destination,” Seeto said.
The takever of Burapha gives New Forests a majority stake in a firm that owns 6,000 hectares of planted forest, as well as conservation areas and a plywood mill. It also comes with a voluntary carbon project focused on plantation afforestation, reforestation, and revegetation issuing carbon credits.
New Forests, which was already present in Laos through its stake in Mekong Timber Plantations, will now have access to almost 85,000 hectares in Laos, including around 15,000 hectares of planted area.
“We are extremely pleased to be partnering up with New Forests to continue on our mission to create a plantation base large enough for Laos to develop as a leading forest industry nation. Our objective is to support the long-term protection and reforestation and management of our land that can benefit current and future generations,” said Przemyslaw Pruszynski, CEO of Burapha Agro-Forestry.
New Forests said it would work with Burapha to boost the socio-economic benefits for local communities.
As previously reported by Impact Investor, New Forests earlier this month launched a forestry fund in partnership with Japan’s Oji Holdings. It also started a strategy focused on agricultural assets in Australia and New Zealand for institutional investors.
Based in Sydney, Australia, New Forests manages a diversified portfolio of sustainable timber plantations and conservation areas, carbon and conservation finance projects, agriculture, timber processing and infrastructure. The firm had $8bn (€7.2bn) in assets under management across more than 4.2 million hectares of investments at the end of last year.
