Australia’s New Forests enters rubber plantation JV in Indonesia

JAKARTA – Sydney-headquartered forestry investment manager New Forests has entered a joint venture with Sampoerna Agro (JSX: SGRO) to invest in a large-scale rubber plantation in Indonesia. The New Forests Tropical Asia Forest Fund LP (TAFF) has purchased a 35% stake in PT Hutan Ketapang Industri (HKI), which manages a 100,150-hectare plantation forestry concession area in Ketapang regency of West Kalimantan.

The investment will enable HKI to expand its rubber plantation on the estate from 9,000 hectares to more than 30,000 hectares and will introduce additional conservation management areas throughout the concession. The Indonesian Government has been strengthening its efforts to attract foreign investment and to improve forest management.

“This initiative is among the first institutional investments in large-scale, sustainable forestry in Indonesia,” said New Forests’ CEO, David Brand. “We are excited to be part of the shift in Indonesia’s forest sector toward more productive and responsible operations.”

Brand said he believed the HKI business would demonstrate how responsible forestry investment could produce better results for all involved, creating shared value for investors and local communities. The agreement between New Forests and Sampoerna Agro would ensure that local communities were consulted and positively engaged in the project and that important ecosystem services were maintained and enhanced.

TAFF is a US$170 million investment fund backed by institutional investors, including European pension funds, development banks, and European and American funds of funds.

It is managed by New Forests with a mandate to invest in and establish a portfolio of high-quality sustainable timber plantations in tropical Asia with a focus on increasing asset value through improved technical, operational, environmental, social, and corporate governance management. www.newforests.com.au (ATI).