Most forestry investments require you to not only invest in land and trees but also call on investors for further payments to assist with plantation maintenance as the forest develops. NZFIG will not require you to make additional payments beyond the initial unit purchase.
NZFIG has contracted forestry management to NZFX throughout the life of the plantation till harvest. NZFX guarantees investor returns, underwrites the issue and therefore has a vested interest to ensure that the plantations are managed using best practice. These are second rotation forests, meaning that the land is already a proven producer of timber and the capital cost of establishing roads has already taken place. Sure, there will be ongoing road and forest maintenance, but these costs will be offset from selective interim harvesting. The first thinning will occur around 10 years whereby trees will be extracted for posts and to make more light and nutrients available for the remaining stock. The income and expenses from these operations will be clearly identified in our reporting to you.
There are many factors that will determine returns and more accurate projections will be published throughout the life of the forest. Calculations made from anticipated stumpage will be most accurate in the time immediately preceding harvest. The one thing you can be assured of, is that your investment will continue to grow.
You will be able to view the company’s forestry block locations online together with annual reports containing details on individual forests. The company will be facilitating ‘open days’ every three years, giving investors an opportunity of personally visiting a typical block in which they are invested. Staff will be on-site to answer questions, manage health and safety protocols and supply light refreshments.
The trees would be selectively clear felled across the designated investment plantations to maximise returns at the time. Investors would be paid net proceeds as sale funds are received and following the deduction of associated harvesting costs. It is envisaged that payments would be made on a quarterly basis until all trees have been harvested in the designated plantations. A particular investment would then end, and a decision made to offer a new one. Investors, depending on circumstance, may wish to reinvest in a third rotation, possibly as a family legacy or may already be invested in other NZFIG plans. Your current investment is for one rotation of the current crops.