Southland Plantation Forest Company of New Zealand Limited

Southland Plantation Forest Company of New Zealand Limited (SPFL)

Invercargill, Southland, New Zealand

September 1992

NZ$22,200,000

Oji Paper Co. Limited - 51%

ITOCHU Corporation - 30%

Fuji Xerox Co. Limited - 19%

Eucalyptus Nitens

Approximately 10,000 hectares

For the purpose of acquiring its own resource for hardwood chip material, SPFL has planted Eucalyptus Nitens on 10,000ha in the Southland area located at southern end of New Zealand's South Island. Harvesting began in 2004 (13th year). The harvested area is to be replanted to maintain same total planted area. Most of the forestry land is purchased by SPFL and the plantation operation is managed by SWEL under a consignment agreement.

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Introduction

Southland Plantation Forest Company of New Zealand Limited (SPFL) was established in 1992 to develop a hardwood chip/fibre resource in southern New Zealand. SPFL has appointed Southwood Export Limited (SWEL) to manage its forests. The SPFL estate is comprised of forty individual forests totalling approx. 10,000ha. These forests are located within Southland/ Otago and are grown on a renewable and sustainable basis. The plantings are mostly Eucalyptus Nitens (99%); the remaining crop is made up of mixed conifers. The land is mostly owned by SPFL, some properties are under lease or J/V agreement. Prior to planting, the majority of properties were farmland, with minor areas of exotic plantation cutover. To reduce impacts on any small rural area, the forests are scattered throughout the region.

The Company's forest management plan is to provide for high yielding crops on the most economic basis, whilst ensuring that in doing so there are no serious adverse affects on the environment. SPFL acquired Forest Management Certification from the FSC (Forest Stewardship Council) in February 2004, thus becoming New Zealand's first FSC certified hardwood plantation company. The Company recognises that its operations have a significant influence on the wellbeing of local communities. To provide employment opportunities the Company will, as a general policy, advertise the bulk of its work on an open tender basis. The Company conducts its operations within its legal rights and any statutory requirements but also recognises it has a wider role within the community. As a responsible landowner it will liaise with stakeholders to ensure that they are informed on any aspects of the Company's operation that could have a significant effect on them and to generally keep them informed of its intentions in their local area.

Company Summary