Agriculture and timberlands investor New Forests Asset Management Pty Ltd said it had formed a joint venture partnership with Indonesia’s PT Sampoerna Agro Tbk (SGRO) to invest in a large-scale rubber plantation in that country.
New Forests manages more than AUS$2.75 billion in sectors related to forestry and forest conservation in the world.
The New Forests Tropical Asia Forest Fund LP (TAFF) has purchased a 35 per cent stake in PT Hutan Ketapang Industri (HKI), which manages a 100,150 hectare plantation forestry concession area in Ketapang regency, West Kalimantan province. HKI currently manages a 100,150 hectare plantation forestry concession area in Ketapang, West Kalimantan.
The New Forests Tropical Asia Forest Fund had reached a final close of $170 million in 2013.
The investment will enable HKI to expand the rubber plantation on the estate from the current 9,000 hectares to more than 30,000 hectares and will introduce additional conservation management areas throughout the concession.
“This investment is among the first institutional investments in large-scale, sustainable forestry in Indonesia. Our investment will improve the capital structure of HKI and fund plantation expansion,” New Forest’s chief executive, David Brand said in a statement.
Geoffrey Seeto, Managing Director for New Forests’ Asian business noted, “We are looking for more partnerships like the one we have established with Sampoerna Agro. We aim for this investment to set a template for further institutional forestry investment in the region.”
New Forests’ investment comes as Indonesia’s government strengthens efforts to attract foreign investment as well as to improve forest management and to protect peat lands.
TAFF is backed by institutional investors, including European pension funds, development banks, and European and American funds of funds, and is managed by New Forests with a mandate to invest in and establish a portfolio of high-quality sustainable timber plantations in tropical Asia and a focus on increasing asset value through improved technical, operational, environmental, social, and corporate governance management.