NZ pair take control of Harvard's forests

By PAM GRAHAM

The money to buy the nation's second-largest forest estate came from Harvard University, but the men running it are from Canterbury University's forestry school, class of 1978.

Phil Langston has just taken up the role of chief executive of Kaingaroa Timberlands, the renamed Central North Island Forest Partnership bought out of receivership by the company managing Harvard's endowment funds.

His boss is Boston-based Andy Wiltshire, a former forestry school classmate and a former chief at Rayonier in New Zealand.

Harvard is a private investor and Langston said he was not seeking a public profile.

Still, Harvard's new man in Rotorua is from what could be regarded as a New Zealand forestry establishment.

Langston went to forestry school in Christchurch and has an MBA from Otago. He has worked for the Forest Service, forestry consultants, and forestry companies Rayonier and Wenita.


He also spent three years managing hardwood forests in Laos and recently returned from Fiji.

Harvard Management, which manages a US$19.3 billion ($28 billion) endowment, the largest of any US university, bought CNIFP and the Timber Management Company set up by Ferrier Hodgson.

It is not disclosing the price paid or future plans, beyond saying it is a long-term investor.

Timber Management Company chief Russell Dale is now Kaingaroa's general manager of operations. Langston's responsibilities are strategy, harvest plan, management and business performance.

They have gone for the Kaingaroa name to make a break with the recent past and to reconnect with the giant forest planted during the Depression that makes up the bulk of the estate.

The company owns cutting rights on the land subject to Treaty of Waitangi claims, likely to be settled with land, rather than dollars.

Langston gives the distinct impression he is keener on dealing with indigenous owners than government bureaucracies.

He is not joining the chorus bemoaning forests as an investment.

The high New Zealand dollar and a doubling of shipping rates has cut forest returns and valuations.

Fletcher Challenge Forests has all but got out of forest ownership and Carter Holt Harvey is expected to address the issue in its own time.

Langston said Kaingaroa would not be driven by short-term issues.

"We've just made a huge investment in New Zealand forestry. Clearly we're very positive about it."

Competitors say Harvard will enjoy higher yields because it bought cheap, does not have to service debt and owns the best trees in town, if not the world.

But there is scepticism that any foreign investor is in New Zealand for the long term.

Langston said there would be less confusion about the market when a forest owner was not selling to its own processing mills and others.

Much of Kaingaroa's harvest is committed to contracts at market prices. Langston is comfortable with the supply obligations and Kaingaroa remains in Silva, the log export venture set up by Carter Holt and the CNIFP receiver.

"Our intention as a company is to focus our efforts on cost-effective wood fibre growth," he said.