Supporter Information:
ANZ is one of the five largest listed companies in Australia and is the number one bank in New Zealand. ANZ was named Canstar’s Agribusiness Bank of the Year for a third consecutive year, in recognition of their quality products and services, as well as their ongoing commitment to the agriculture sector and to regional Australia’s long term growth.
Website: www.anz.com.au
Facebook: @ANZAustralia
Twitter: @ANZ_AU
The Department of Primary Industry and Resources was established by the Northern Territory Government on 12 September 2016. The department brings together many of the key functions that drive economic development on Northern Territory (NT) lands, coastal areas and inland waterways.
Website: www.dpir.nt.gov.au
Facebook: @ntgovernment
Frank Miller
Optimising the value of timber plantations in northern Australia
To meet future challenges and sustain investments into northern Australia’s timberlands, it’s imperative that plantations look to diversify through secondary income streams and high value markets. That’s according to a report released by 2019 NT Scholar and CEO of African Mahogany Australia, Frank Miller, which investigates the drivers and opportunities that will add value and attract investments into existing plantations in northern Australia.
With support from ANZ and the Northern Territory Government, Mr Miller travelled across Michigan and Wisconsin, Florida, Costa Rica, Colombia, Paraguay, New Zealand and China, visiting plantations that have found productivity success in exploring high value markets and integrating various land uses on-farm. Travelling to Valledupar, Colombia, Mr Miller visited a local commercial tree plantation and saw firsthand the benefits of implementing an integrated land approach.
“Previously an established cotton operation, this business was facing significant productivity issues due to land degradation. To rehabilitate the land and boost productivity, the business decided to build a commercially feasible timber production and livestock grazing enterprise. After the initial timber planting, cattle were introduced after 12-months for grazing purposes. This led to improved environmental conditions and enhanced productivity, reducing weeds and herbicide application, and lowering operational expenses.”
With the establishment of high value timber plantations slowing in Australia, Mr Miller said it’s important to look at how diversification can optimise value and drive new investments to timber plantations.
“It’s imperative that we look outside of both our standard revenue streams and current markets to ensure existing plantations are reaching the highest value. To successfully implement and execute integrated timberland and agricultural investments, the barriers and limiting factors must be well understood and included in the business model. I attended the University of Georgia Timberland Investment Conference in Florida, where human capital and cash flow were identified as primary challenges to growth and diversification by international investment fund managers.”
Mr Miller recommends implementing a Silvopastoral System (SPS) in northern Australia to attract investment and growth opportunities for high value timber within existing plantations.
“A diversified and well-integrated approach to sustainable land use, fulfills many drivers of tropical timberland investment and can be applied to attract new silvopastoral investments. With dwindling natural forest supply around the world, there is a demand for high value timbers which are typically grown in tropical regions with similar climatic conditions to the Northern Territory. There are extensive opportunities and an appetite for investment in integrated cattle, high value timber and cattle feed production system in the Northern Territory. African mahogany is an example of an internationally important, high-value forest tree species that’s showing great promise in the Northern Territory, with a significant plantation estate already set for further expansion. Investing in the growth of high value tree species, that produce quality timber in a region with desired climate and within proximity of expansive markets, satisfies many challenges with sustained timberland investments. But to optimise high value timber investments, plantations must also look at opportunities to integrate various land uses into their operations such as food crops and grazing.
“An SPS-driven investment will enhance the value of existing plantations and drive benefits to local communities, the environment, cattle industry, and growth of high value timber. Implementing a smart land-use management system offers positive environmental, social and financial value that will attract new investment into northern Australia plantations. I look forward to sharing my learnings and recommendations to help improve the investment decision-making process regarding African mahogany plantation development.”