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Plum Creek Completes Michigan Timberland Acquisition

Started by Shotgun, November 30, 2005, 09:17:00 PM

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Shotgun

Sort of a big deal in Michigan...
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SEATTLE, Nov 15, 2005 (BUSINESS WIRE) -- Plum Creek Timber Company, Inc. (NYSE:PCL) today announced that it has completed the purchase of 650,000 acres of timberlands in Michigan from Escanaba Timber LLC. The signing of the purchase agreement was previously announced on October 3, 2005.

The timberlands, which are certified to the Sustainable Forestry Initiative(R) (SFI) Standard, contain a diverse mix of timber species and age profiles, including mature mixed hardwood stands and conifer plantations. Plum Creek will continue to manage these forests to the SFI Standard, as it does all of its timberlands.

Plum Creek will sell a significant portion of the pulpwood harvested from these lands to the NewPage Corporation Escanaba, Mich., pulp and paper mill under a long-term supply agreement.

Plum Creek is one of the largest private timberland owners in the nation, with more than 8 million acres of timberlands in major timber producing regions of the United States and 10 wood products manufacturing facilities in the Northwest.

SOURCE: Plum Creek Timber Company, Inc.

Plum Creek Timber Company, Inc., Seattle
Media: Kathy Budinick, 206-467-3620
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We hope they neighbor well, manage well, and do well.

Norm         smiley_chop

Joined The Forestry Forum 5 days before 9/11.

jayfed

I wonder if Plum Creek might go after International Paper lands which are now on the market (along with their 5 glossy paper mills).  Many of IP's lands butt next to the former Escanaba Timbers land base.
A second warmer and drier summer.

Black_Bear

We are witnessing a major change in land ownership patterns, at least here in the northeast. The TIMO's and REIT's will eventually control the majority of the land ownership that once belonged to the pulp and paper companies. I believe that the pulp and paper companies in Maine now own zero acres of land.

Plum Creek is a Real Estate Investment Trust. NewPage has been acquiring mills for a couple of years now; they acquired the MeadWestvaco holdings in western ME last year. One positive twist for the regions supported by the mills is that long-term fiber agreements seem to be involved with every negotiation. 

Ed

Gary_C

Major change is right. Pretty soon all of the mills in the US will be foreign owned, if they are not already.

The same thing happened a few years ago when Stora Enso, who bought out Consolidated Papers, and then had to divest all of their timberlands. The buyer was Plum Creek and I heard they were not the high bidder.  ???
Never take life seriously. Nobody gets out alive anyway.

crtreedude

You know, this sounds so much like the outsourcing that hit the technology sector for a while. Send all your work out because it makes your company look good. Lot's of revenue, very few employees. And then, because you don't have anyone trained, they start raising the rates and squeezing you. Come in low, and raise the rates over time - the reinvestment is more than you can afford.

These papermills will be eventually out of business I suspect - they won't have a source of pulp and they will have to buy at higher and higher prices. But, hey, no problem - the management will be long gone with their bonuses.  >:(

I find it amazing that countries allow natural resources to be sold off. Do you think the Arabs would let us buy a few oil fields? I rather doubt it.

So, how did I end up here anyway?

Murf

Quote from: crtreedude on December 01, 2005, 08:32:49 AM
Do you think the Arabs would let us buy a few oil fields? I rather doubt it.

Actually the majority of the oil fields in the middle east are foriegn-owned.

The British, Spanish, Italian, Canadian and of course American oil companies hold most of the oil reserves in that area.

The Arab countries got rich off their share (royalties) of the revenues from that oil.
If you're going to break a law..... make sure it's Murphy's Law.

crtreedude

That would mean that the fields are not owned, but leased... The resource is still the Arab countries right?

I get royalties on a piece of software I wrote - I still own it, or I wouldn't get the royalities. Otherwise it is a tax or a tarif.

I might be wrong on this.

So, how did I end up here anyway?

Murf

It depends on the country, each is different.

In some countries the land is owned by the oil companies, in some the land is not owned, but the rights to the oil are. That is the same in America, you can own the oil below someone else's property. Surface rights and mineral or petroleum rights are seperate.

In the majority of countries they only own the exclusive right to the oil.

In Egypt for instance, the oil is owned seperately from the land, but the land is also owned, so you can own the land, and the oil below it, but if 'your' oil extends out under the adjoining property you own it too.

There the oil is produced by companies which are 50/50 owned by 'foriegners' and the Government. The money is not split 50/50 though, the majority goes to the foreign company, the government gets a much smaller slice, but also gets jobs and spin off revenue from having the business there.
If you're going to break a law..... make sure it's Murphy's Law.

Black_Bear

crtreedude:

Most of the fiber supply agreements being negotiated are good for 2-3 decades, which is probably longer than the REIT's and TIMO's will hold them. The REIT's and TIMO's are definitely in the game for awhile and they have a great need to keep the land sustainable. From what I understand most of these investment groups have 10-20 year investment plans. The return may not be as good as with other investments, but the volatility is low. Portfolio diversification is the name of the game.

Plum Creek is currently attempting to develop the Moosehead Lake region here in Maine. This has to be their attempt at adding value to otherwise low value woodlands and increasing their rate of return on the land base. The jury is still out as to what will happen. It will be interesting to see how it pans out.

Ed

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