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Green Resources has successfully completed its 2014/15 planting season. The total area planted was 5,314 ha, which was 12% higher than the budgeted planting of 4,750 ha, and 72% higher than GR’s own planting in 2013/14. The total net planted area for the Group stands at 44,064 ha as of 30/06/15, a net gain of 2,935 ha since the closure of the last financial year 30/06/14.

Planting in 2014/15 was split as follows; Uganda 219 ha (4%), Tanzania 2,033 ha (38%); Mozambique Lurio 1,633 ha (31%); and Mozambique Niassa 1,429 ha (27%). Uganda does not include planting during the main rains in Uganda, but there is only marginal land available for further planting.

Pines species, which will be managed on a sawlog rotation of up to 18 years, accounted for 56% of the planted area, and eucalyptus, which will be managed on 6-7 year pulpwood or 8-12 year pole/ veneer rotations, accounted for the remaining 44%.

This year’s planting is expected to benefit from fully mechanised land preparation applied to all Mozambican planting, along with the fact that all planting in that country was completed before the end of February, well before the rainy season starts coming to an end in April. In Tanzania, the planting was completed by mid-March, almost two months earlier than previous years. Improved silvicultural practices, i.e. broadcast chemical weed control prior to planting, and the increased usage of fertilizer, are also expected to improve the performance of this year’s planting compared to previous years.

Green Resources is pleased to announce that it acquired Florestas de Planalto (FdP) in Niassa Province, Mozambique in September 2014. FdP was a subsidiary of Finnish pulp and paper producer UPM and intended as trial plantations ahead of a potential pulp mill project in that region. The plantations were established to a high standard and totaled some 1,213 ha of eucalyptus aged from 1 – 3 years. Their close proximity to Green Resources’ own plantations offers considerable operational and cost allocation synergies.

Overall Group fire losses for 2014/15 amounted to 675 ha, or less than 2% of the standing forest and the 3% annual loss assumed in the BAV model. 322 ha or 48% of the losses occurred at Global Solidarity Forest Fund (GSFF) plantations in Niassa, Mozambique. Green Resources completed a merger with GSFF in May 2014. This is a significant reduction in the area burnt on GSFF compared to previous years, and most of the losses were on marginal areas. Fire losses for the remainder of the Group totaled 353 ha, which is a 23% reduction in the losses reported for 2013/14. The largest loss was 226 ha in Lurio, Mozambique.

In addition to fire losses the net planted area in the Group was reduced by a further 2,739 ha as a result of remapping, crop failures, and by the exclusion of 915 ha remaining plantings in Lindi Forest Ltd Tanzania. In its 2014 Biological Asset Valuation Green Resources wrote-down the value of Lindi’s plantation asset by USD 2.7 million to USD 1 million. Given that Lindi is a fairly small operation (5% of GR’s total plantation area in Tanzania), very distant from the main resource base in the southern Highlands, and with poor survival of the original plantings, the Group has decided to write-down the value to zero in 2015.

Background

Green Resources is Africa’s leading forestation company and a leader in East African wood manufacturing. The company has over 44,000 ha of standing forest in Tanzania, Mozambique and Uganda, established primarily through its own planting activities. It operates East Africa’s largest sawmill in Tanzania and electricity pole and charcoal plants in Tanzania and Uganda and is also one of the first global companies to receive carbon revenue from its plantation forests.

Green Resources was established in 1995 and is a private Norwegian company with just over 80 shareholders. It employs more than 3,500 people and has invested USD 125 mn equity in its African operations since its inception and a similar amount was invested in companies acquired by GR. Green Resources aims to establish over 100,000 ha of plantation to serve the growing regional and global demand for wood products. Its strategy is based on growing wood for both traditional uses (sawn timber, panel board, pulp, etc.) and for the growing bio-energy sector. It is a leader in carbon finance. Green Resources has probably planted more trees than any other private company in Africa during the past ten years. In addition, the company holds land for future planting and conservation, ensuring continued strong growth.

For further information please contact:

Mads Asprem, CEO, mads.asprem@greenresources.no

Marek Guizot, Forestry Director,marek.guizot@greenresources.no

GRAS Press Release - 2014-15 planting.pdf

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