East Coast forests go to family

Receivers Ferrier Hodgson have agreed to sell the Huaguang Forests' assets in the East Coast to forestry company Earnslaw One, owned by Malaysia's billionaire Tiong family.

The price was undisclosed although Earnslaw One managing director Thomas Song said it reflected the long-term average of log prices rather than the present depressed prices.

The Ruatoria, Mangatu and Tokomaru forests comprise 33,000ha of trees on Crown Forestry licences.

Song said that initially Earnslaw, which already owns 6000ha of forests on adjacent land in the East Coast, planned to construct a sawmill near Gisborne to process the trees.

Such as plant would cost about $30 million to $40 million and would create between 100 and 200 jobs. Song said Earnslaw was also considering building a veneer plant, but the initial plan was a sawmill.

Receiver Brendon Gibson said some conditions needed to be fulfilled, but the sale was expected to go through in early October.

"We think the sale to Earnslaw One is a great result for the East Coast region," Gibson said.

The forests are 94 per cent radiata pine.

Earnslaw One already has 53,000ha of forests in New Zealand on the Coromandel Peninsula, the East Coast and in Southland.

With its new purchase, it will become one of the country's biggest forest owners.

The Tiong family from Sarawak, one of Malaysia's wealthiest, are involved in banking, the media, shipping, oil palm plantations, optic fibre manufacturing and property development.

The family have strong ties to the SUPP, the main Chinese party in Sarawak.

- NZPA