CHH warns NZ becoming unattractive for new investments

1.00pm

Forestry company Carter Holt Harvey (CHH) today warned proposed regulatory changes and energy supply concerns could see it hold off on future investments in New Zealand.

Speaking at the company's annual general meeting in Auckland this morning CHH chairman John Maasland said he was seeking assurances that issues surrounding proposed changes to the Resource Management Act and the Employment Relations Act, as well as energy supply concerns could be resolved in a way that would not negatively impact the company.

"Failure to secure these assurances will force us to reconsider significant investment in New Zealand," he said.

CHH chief executive Peter Springford said serious energy shortages were expected now that Project Aqua has been canned.

He blamed the "onerous requirements" of the Resource Management Act and a lack of sensible long term energy planning over the last 20 years.

Mr Springford said the proposed regulatory changes and potential energy problems made it difficult for CHH to justify major new investments in New Zealand.

This warning comes amid market speculation that CHH could be lining up as a potential rival bidder to trump Rubicon's $1.85-a-share takeover bid for Tenon, which is in the throes of selling the last of its forests.

CHH has not commented on the rumours and has said it would inform the market if it had any news.

Although sounding a warning bell about the future expansions in New Zealand, CHH is looking to expand this year.

"During 2004 Carter Holt Harvey will continue to consider sound acquisitions and divestments in line with our areas of expertise. This may include investment in production capacity closer to our customers in key Asian markets," Mr Maasland told the meeting.

Mr Springford indicated CHH could also follow Tenon's lead in looking to offload some of its forestry assets.

Mr Springford said the company was looking at the "best possible ownership model" for its forests.

"We do need to own some, but not all, of our current forest holdings to protect our strategic processing assets," Mr Springford said.

CHH shares were up 5 cents at $2.12 by 10.45am this morning, having traded between $1.57 and $2.34 over the past 12 months.

- NZPA