OneFortyOne to buy South-East timber mill from Carter Holt Harvey for about $150m, deal needs ACCC nod

In September 4, 2017

(AU) – SA forestry company OneFortyOne Plantations is buying the Jubilee Highway timber mill at Mount Gambier from Carter Holt Harvey, taking on its 300 plus employees.

The deal, announced on Tuesday and estimated to be north of $150 million also includes CHH’s woodchip operations at Portland, Victoria.

The deal will be subject to approval from the Australian Competition and Consumer Commission because it gives OneFortyOne Plantations unprecedented control of the timber supply market from the region for at least the next 100 years.

Chief executive Linda Sewell said the intended acquisition was further evidence of the company’s “strong commitment” to the Green Triangle.

OneFortyOne bought the rights to three forward rotations of the South-East pine plantations from the State Government in 2012 for $670 million.

At the time, the price received criticism for being too cheap.

Earlier this year, The Advertiser revealed the group, which took over management of the forests in 2015, was making four times the annual profits generated under government management.

OneFortyOne’s annual profits are as high as $125.5 million, which means it will have paid off its purchase price by mid-2019.

The Jubilee Highway Mill is a large sawmill in the region, processing softwood sawlogs into structural timber products used in the residential and commercial construction markets. The operations at Portland handle the wood chip from the Jubilee Mill and other third-party sawmills in the Green Triangle.

“Going forward we have no plans to expand the mill. We will continue to manage the forest estate on a sustainable basis and meet our obligations to the State,” Ms Sewell said.

“This is a great business and it is an excellent opportunity to provide security to the local forestry sector.”

OneForyOne has said it will make a decision by December to spend up to $10 million on further studies into setting up a separate $200 million particle board mill in Mount Gambier.

The majority of the OneFortyOne estate is located in SA’s South-East with lesser area in south west Victoria.

The company, which celebrated its fifth-year milestone last week, has a small head office in Melbourne and currently employs up to 65 people in Mount Gambier.

OneFortyOne to buy South-East timber mill from Carter Holt Harvey for about $150m, deal needs ACCC nod  by Valerina Changarathil, The Advertiser.  Available from < > [August 29, 2017 9:32am]

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