Integrated Tree Cropping, the timber and forestry arm of Elders, has been hurt by poor housing starts and dwindling managed investment scheme (MIS) sales but remains confident about long-term demand for hardwood timber plantations.
Chief executive Vince Erasmus told The Australian Financial Review that while MIS income was under pressure due to the economic climate, long-term demand for Australian-grown hardwood was good, given that other countries were locking up forests and relying more on plantations.
"We believe the fundamentals of growing wood fibre in Australia for the Asian market are still very good," Mr Erasmus told The Australian Financial Review.. "During the past month there has been a reasonable increase in the consumption of hardwood fibre in Japan."
Elders has expressed an interest in managing the timber assets of Timbercorp, which was placed in voluntary administration on April 24.
"The fact there was strong Japanese interest in buying Timbercorp's assets indicates the fundamental assets are sound," Mr Erasmus said. "But if there was to be a liquidation sale, more realistic land values would then prevail."
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