Gunns has Carter Holt in its sights

Tasmanian-based timber company Gunns Ltd has fuelled speculation that it is eyeing Carter Holt Harvey's assets in timber, paper and packaging as part of its expansion plans.

Gunns executive chairman John Gay told the Launceston Examiner newspaper in Tasmania that he would not rule out a takeover of the Auckland-based company that owns a medium-density fibreboard plant at Bell Bay in Tasmania.

Mr Gay - who acknowledged that opportunities for his timber company were shrinking in Tasmania - said of CHH: "It is one [company] we would have to be interested in".

"Gunns is always looking to expand its business and always has been," he said. "We are an international company."

Last August, Gunns invested $A29 million ($32.3 million) in a jarrah hardwood sawmilling business in Western Australia.

Carter Holt employs 10,500 people across Australia, New Zealand and Asia

It has a 330,000ha forest estate in New Zealand.

- NZPA