Harvesting Rights Acquisition
New Opportunity for Forest Owners
A new opportunity for forest owners to convert future harvesting revenue into an upfront payment plus a 20-year annuity payment.
NewGen will provide the perfect solution to landowners looking for a hassle-free, de-risked, annual income from their forest, whilst providing investors with a long-term sustainable investment opportunity with a positive yield.
Through a new fund called FTI Investco, NewGen will deploy up to €50m over the next 3 years to acquire harvesting rights from within the private forest estate.
NewGen forestry will manage the acquisition process and will acquire the forestry harvesting rights from existing plantation owners be they farmers or private forest owners.
A Unique Approach
NewGen Forestry is targeting the acquisition of harvesting rights to over 2,000 hectares of land in its first year of operations.
The fund will offer a new and innovative income stream to forest owners. In return for selling the harvesting rights to the crop of trees; NewGen will offer landowners up to 25% of the forest value in an upfront payment, with the balance being paid over 20 indexed annuity payments.
The annuity payment is designed to replicate the 20-year term of the original forest premium scheme and will convert the “future value” of the crop into current cashflow.
Unlike a traditional forest sale, the owner does not have to sell the underlying land: instead, post-signing the license agreement, NewGen will simply take over the management of the existing crop and will carry all future costs like fire insurance and other day-to-day operational costs.
Once harvesting is completed NewGen will also provide the landowner with a reforestation payment to replant the forest after felling, thus securing the establishment of the 2nd rotation.
The 2nd rotation crop will belong to the landowner as the license agreement is only for the current crop. At the time of re-planting, NewGen will offer another long-term environmental contractual solution unlocking the value of this 2nd crop for the landowner.
Purchase of Harvesting Rights
- Retain ownership of your land – no need to sell.
- Unlock the future value within your forest now.
- Convert future harvesting revenues (possibly 10 to 20 years away) into either
- an immediate upfront payment plus 20 years of annuity payments, or
- annuity payments alone.
- Tax-efficient payments.
- Retain any outstanding premium payments that may still be due from the Forest Service.
- NewGen will manage forest in accordance with best-in-class sustainability practices to enhance the biodiversity and biological growth and ingrowth of the forest.
- Transfer the cost, timing and financial risk associated with applying for licenses to fell and related environmental reporting.
- Unburden yourself from all further management costs, insurance, road
construction, day-to-day management, and harvesting costs.
- NewGen will provide a reforestation payment, post felling, to re-establish the forest and can enter into a second long-term contract to unlock the value from this second rotation.
- Forest owner to retain ownership of the re-established forest.
What to do Next
If your forest is 15 years or older and you would like to explore the option of selling the harvesting rights to your forest, please contact NewGen.
NewGen will initially screen your site and if found to be suitable will organise a site visit.
Following a detailed inventory assessment, and following discussion with you, the forest owner, NewGen will then offer a blended mix of an upfront payment plus an indexed annuity payable annually, for up to 20 years.