Thursday, August 30, 2007


From USDA News Release:
"WASHINGTON, Aug. 30, 2007 - Agriculture Secretary Mike Johanns today announced that $6 million has been awarded to the University of California - Davis to improve breeding technologies for conifer trees. Application of genomic-based breeding technologies will significantly reduce the breeding cycle time and the cost of extensive field evaluations at large, long-term test plantations."

"The Conifer Coordinated Agricultural Project (CAP) brings genomic-based breeding to major industry cooperative breeding programs within five years to develop a comprehensive undergraduate and graduate curriculum in modern plant breeding technologies to train the next generation of tree breeders. The program also will develop a comprehensive extension program to train existing tree breeders in the use of genomic-based approaches to tree breeding."

Read the entire news release.

RMK Timberlands acquires 115,000 acres in Texas

According to the Daily Report, Regions Financial Corp.’s RMK Timberland Group has purchased 115,000 acres in Texas from Corrigan Timberlands. Although no other information was given, I assume that this is a part of the former International Paper land (managed by Molpus, I beleive) in East Texas. --Brian

Friday, August 24, 2007

Forest Nurseries and ArborGen

One of the stated concerns as timberland moves from industrial ownership to investor ownership is "Where will the seedlings come from?" Investors want the timberland but not the nurseries.

International Paper, in particular, had a large forest seedling production capability. MeadWestvaco, although with less production capacity, also has outstanding seedling capability. Loss of these quality nurseries would be significant from a forest production standpoint and probably from a seedling cost standpoint.

Several years ago, a forest biotechnology company, called ArborGen, was created by I-P, MWV and Fletcher Challenge. Fletcher Challenge was later broken up and the Rubicon piece became the partner in ArborGen. The thinking behind ArborGen was that it might make more sense to combine existing technology and future research dollars than for everybody to do their own thing. The idea took, not quickly, and ArborGen was born.

ArborGen's product is improved tree performance through biotechnology. The product's package is the seedling. The founders have now provided ArborGen with all the packaging they need! All United States nurseries belonging to International Paper and MeadWestvaco are now owned by ArborGen. Rubicon's New Zealand and Australian nurseries are now owned by ArborGen. Along with the nursery operations come the seed orchards, germplasm, researchers, more technology and more intellectual property. ArborGen is entering a new era. Read the news release here. Visit ArborGen here. --Brian

MWV Sells Elkins, WV Timberland for $1,500/Ac.

The following is from the MWV news release.

"RICHMOND, VA – August 24, 2007 – In continuation of its land management strategy, MeadWestvaco Corporation (NYSE: MWV) today announced a definitive agreement with Penn Virginia Operating Co., L.L.C., a wholly owned subsidiary of Penn Virginia Resource Partners, L.P.(NYSE: PVR), for the sale of approximately 62,000 fee acres of forestland in West Virginia for $93.1 million. MeadWestvaco expects to complete the transaction in the third quarter of this year."

This completes the announced planned sales of MWV and leaves the company with about 800,000 acres. Read the entire news release here.

MeadWestvaco appears to have a very well thought through program for the remainder of it's timberland holdings. All lands have been (or will be) classified into one of four categories: Development, Emerging Development, Recreation and Timberland. The resulting implementation plan has three prongs.

  1. East Edisto: Development already well reported.
  2. Small Tract Sales: Appears to be the guts of the program. - 117,000 acres along Georgia/Alabama line (Mahrt mill), 95,000 acres in Virginia and West Virginia. SC not yet determined. The SC lands will be determined and a marketing plan for the entire program completed within a year.
  3. Continuation of Forest Management with select Sales over time. Rough acreages in this program are 150,000 acres in the Rupert WV area, 70,000 acres in the Appomattox, VA area and 320,000 acres currently in SC. The SC number will be reduced by the number of acres selected for the Small Tract Sales program.

Some people in the Charleston area are trying to pressure MWV into selling the East Edisto lands for "conservation" purposes. They continue to propose a price of $4,000 per acre which is way below the market value for that land.

On another note, Carl Icahn has taken a position of almost 3.8 million shares of MWV. It will be interesting to see why, and what he wants to see happen. He's not usually too passive! --Brian

Tuesday, August 14, 2007

Leisure land for investment

From theJackson, MS Clarion Ledger.

While financial markets seesaw, a growing number of investors are sinking their money into another commodity: recreational land. Investors are paying anywhere from $1,000 to $20,000 an acre for land, mostly in Texas, the South and the western mountain states, that doubles as a private recreational escape and a diversifier for a long-term portfolio, reports. And the land values appear to be accelerating. Plum Creek Timber, an investment company that is the U.S.' largest private owner of timberland, says land it has sold for recreational development has gone from $2,300 an acre in 2004 to more than $4,000 now.
- Gannett News Service
You can read the more in depth article from Kiplinger here.

You can also read about one persons investment in a small tree farm in the latest issue of "Timberlines" magazine. I particularly enjoyed this one. Click on "A Labor of Love". --Brian

Monday, August 6, 2007

MWV Sells Timberland and Leasehold to Wells Timberland REIT

A very busy day in the timberland sales arena! This news release from the MWV web site. --Brian

RICHMOND, VA – August 6, 2007 – MeadWestvaco Corporation (NYSE: MWV) today announced a definitive agreement with Wells Timberland REIT under which it will sell approximately 228,000 acres of owned forestland and approximately 95,000 acres under longterm timber contracts for $400 million. The sale is part of MeadWestvaco’s previously announced strategy to segment and manage its domestic land holdings for the highest value opportunities. MeadWestvaco expects to complete the transaction in the fourth quarter of this
year, and intends to return the value obtained to shareholders.

The agreement with Wells Timberland REIT includes a long-term fiber supply agreement for MeadWestvaco’s Mahrt Mill, which produces over one million tons of Coated Unbleached Kraft paperboard marketed under the CNK® brand. Under the terms of the agreement, fiber will be sold at market price and the forestlands will continue to be managed and third-party certified under the requirements of the Sustainable Forestry Initiative® Standard.

“Our ongoing land management strategy is delivering solid results for our shareholders,” said John A. Luke, Jr., chairman and CEO of MeadWestvaco. “The sale of these forestlands is part of our broader strategy to segment our land holdings for the best possible use, whether that is fiber supply, conservation, recreation or responsible development.”

Nearly 228,000 acres are owned by MeadWestvaco in Stewart, Marion, Quitman and Randolph counties in Georgia, and Russell, Barbour and Chambers counties in Alabama. The sale also includes the conveyance of long-term timber harvesting rights on approximately 95,000 acres owned by third parties.

MeadWestvaco is continuing the auction process for approximately 63,000 acres of forestland located in West Virginia. The company anticipates entering a definitive agreement for the sale of these lands in the third quarter. Upon completion of these forestland sales, MeadWestvaco’s U.S. land holdings will include approximately 800,000 acres throughout South Carolina, Georgia, Alabama, Virginia and West Virginia.

Temple-Inland to Sell 1.55 Million Acres of Timberland for $2.38 Billion

Sorry for the long absence folks but here is something to start the week off with. The news release below is from Temple-Inland's web site. On another note, Cambium bought 6,100 acres in Hawaii from Hancock. Read about that. --Brian
AUSTIN, Texas--(BUSINESS WIRE)--Aug. 6, 2007--Temple-Inland Inc. (NYSE: TIN) today announced that it entered into a definitive agreement with an investment entity affiliated with The Campbell Group, Inc. to sell 1.55 million acres of timberland for $2.38 billion. The acreage included in the sale consists of 1.38 million acres of land owned in fee and leases covering 175,000 acres.
The transaction is expected to close in fourth quarter 2007. The total consideration is expected to consist almost entirely of installment notes. Roughly 30 days after the sale is closed, the Company expects to pledge the installment notes as collateral for a non-recourse loan. The net cash proceeds from these transactions, after current taxes and transaction costs, are anticipated to be approximately $1.8 billion. Following the pledge of installment notes, the Company expects to use the majority of these proceeds to pay a special dividend, which is currently estimated to be approximately $1.1 billion, or $10.25 per share, to its common stockholders. The remaining approximately $700 million of the cash proceeds will be used to reduce debt.
The transaction includes a 20-year fiber supply agreement for pulpwood and a 12-year fiber supply agreement for sawtimber, the terms of which are both subject to extension. Fiber will be purchased at market prices. The agreements further require that the timberlands will continue to be managed and third-party certified under the requirements of the Sustainable Forestry Initiative(R) Standard. In addition, The Campbell Group and its investors have agreed to continue Temple-Inland's high conservation standards and focus on environmental stewardship.
"The sale of our timberland is a milestone in the execution of our previously announced transformation plan," said Kenneth M. Jastrow, II, chairman and chief executive officer. "The fiber supply agreements will enable us to capture a significant portion of the fiber grown on these lands. The quality of our forest is a tribute to our forest team's superb management of these timberlands for many years. We are pleased that many of our current forest employees will have the opportunity to continue managing these lands under new ownership."
John Gilleland, president of The Campbell Group, said, "The Temple-Inland forests represent some of the best managed, highest quality industrial timberlands in the world. Acquiring these forests enables our firm to further its strong commitment to timberland as a long-term asset class, and to continuing our history of sound environmental stewardship. We are looking forward to managing these lands responsibly and to producing the best product for our customers and quality results for our clients."
Transformation Update
As previously announced, Temple-Inland's transformation plan includes: -- Retaining its manufacturing operations - Corrugated Packaging
and Building Products - as Temple-Inland Inc.;
-- Spinning off its financial services operation, Guaranty
Financial Group, in a tax-free distribution to shareholders;
-- Spinning off its real estate operation, Forestar Real Estate
Group, in a tax-free distribution to shareholders; and
-- Selling the Company's strategic timberland.
Temple-Inland reiterated that it is on track to complete its transformation plan by the end of 2007.
Goldman, Sachs & Co., and Citigroup Global Markets Inc. served as financial advisers and Sutherland, Asbill & Brennan LLP served as legal advisor to Temple-Inland in connection with the transaction. Morrison & Foerster LLP and Schwabe, Williamson & Wyatt served as legal advisors to The Campbell Group in connection with the transaction.
Temple-Inland Inc. operates four business segments: corrugated packaging, forest products, real estate and financial services. Temple-Inland's common stock (TIN) is traded on the New York Stock Exchange. Temple-Inland's address on the World Wide Web is
The Campbell Group, LLC ( is a full-service timberland investment management company headquartered in Portland, Oregon. The company is focused exclusively on acquiring and managing high quality, investment grade forestland on behalf of institutional investors to produce superior risk-adjusted returns.
This release contains "forward-looking statements" within the meaning of the federal securities laws. These statements reflect management's current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that might cause such differences include, but are not limited to: general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including the costs of raw materials, purchased energy, and freight; demand for new housing; accuracy of accounting assumptions related to pension and postretirement costs, impaired assets, and the allowance for credit losses; competitive actions by other companies; changes in laws or regulations and actions or restrictions of regulatory agencies; our ability to execute certain strategic and business improvement initiatives, including the Transformation Plan; closing the transactions described in this report; and other factors, many of which are beyond our control.
CONTACT: Temple-Inland Inc., AustinChris L. Nines, 512-434-5587SOURCE: Temple-Inland Inc.