On behalf of pension fund client ABP, APG has acquired a significant direct interest in Wenita Forest Products (Wenita), the largest producer of forest products in Otago, New Zealand. Wenita manages a plantation estate comprised of approximately 30,000 hectares of Forest Stewardship Council (FSC) certified forests in New Zealand. This means that in an area more than three times the size of the province of Utrecht, the conservation of biodiversity and the economic and social well-being of local communities and employees are paramount. The acquisition expands APG’s responsible investment portfolio and direct investments into responsibly managed forestry assets.
Wenita is among the largest timberland estates in New Zealand and has a three-decade track record of successfully supplying forest products to local and international markets. With extensive experience in plantation estate management and established infrastructure, the company also provides a range of responsible forest management solutions to other forest owners. The estate is predominantly comprised of Radiata Pine forests, which serve as an integral raw material used in a wide variety of end markets as houses, veneer as plywood.
Globally, about 15% of greenhouse gas emissions are caused by deforestation. Climate reports from the International Energy Agency and the UN Climate Panel (IPCC) clearly show that global warming is still going way too fast. Like many of the pension fund participants, APG and ABP are also concerned about the climate.
The forest’s investment attributes offer strong alignment with APG’s ambition to seek opportunities that fight climate change, protect biodiversity and deliver sustainable returns for its clients. Due to the substantial carbon sequestration characteristics of the forests, the acquisition presents APG with an opportunity to support efforts to reduce embodied carbon within New Zealand and international construction and housing markets. All Wenita forests are also certified according to FSC standard, which means that in an area more than three times the size of the Netherlands province of Utrecht, the preservation of biodiversity and the economic and social well-being of local communities and employees are taken into consideration. As such, Wenita forests not only provide a good investment return for ABP participants, but also contribute to a liveable planet.
Ben Avery, Senior Portfolio Manager at APG commented: “Wenita offers an established platform with over 30 years of operating history, immediate access to a significant woodflow profile underpinned by a high quality and large scale FSC-certified softwood forest resource capable of delivering ABP attractive risk-adjusted returns in a responsibly qualified manner. This new investment is a further step in our strategy to support global decarbonisation ambitions and ABP’s transition to a net zero environment."
APG is making the investment together with the UK pension provider Pension Protection Fund (PPF). Under the agreement, together the two organizations will acquire a controlling 62% interest from Sinotrans NZ, a local representative of the Chinese logistics and transport giant Sinotrans. A New Forests-managed fund, the Australia New Zealand Forest Fund 2, has owned the other 38% shareholding since 2018 and will remain invested alongside APG and PPF.
This investment will enable APG, on behalf of ABP, to contribute to the realisation of the Sustainable Development Goals (SDGs). The SDGs were established in 2015 by the United Nations with a view to creating a better and more sustainable world.