March 1, 2017
Veon’s successful Irish Forestry Funds strategy to be replicated by Finnish private equity fund with ISIF investment support
Veon has been at the forefront of developing the Irish private commercial forestry sector and was responsible for attracting over €60 million into the sector by way of direct investment over the past two years including the delivery of the single largest private transaction in Irish forestry in the history of the State in 2015 with the sale of the Forestry Investment Plans portfolio and placing Ireland firmly on the map as a forestry investment destination.
Veon’s successful efforts in marketing Irish forestry assets abroad during the financial crisis were recently rewarded with the announcement of a new capital injection into the Irish forestry sector from the Irish Strategic Investment Fund (ISIF) who will invest €55 million along with the European Investment Bank investing €28.5 million through a Finnish private equity fund that is to target Irish small forest owners to strengthen the supply of wood for commercial use.
According to Minister of State for Food, Forestry and Horticulture, Andrew Doyle “This announcement will help ensure that this economic potential is realised by consolidating smaller forests under a single management plan. The mobilisation of timber from privately owned forests is a key objective of my Department and this investment fund will make a significant contribution towards achieving this goal.”
The Finnish initiative intends to develop a professionally managed portfolio of up to 15,000 hectares of forests across Ireland in the coming years to rival the success of the Irish forestry funds which has developed a similar strategy since 1997 with the backing of €70 million from Irish private investors and notably without investment from the Irish Strategic Investment Fund.
“It is always good to see new investment in the Irish forest industry and new commitment to increase commercial tree planting which our economy needs to meet domestic and foreign demand” said Trevor McHugh, Managing Director Commercial of Veon Ltd. “It is also gratifying to see a strategy which we have professionally pursued since 1997 being replicated by new foreign entrants to the Irish market ironically supported by Irish State involvement” he added. Mr McHugh went on to say that it “was disappointing that, with a number of professional Irish forest management companies to choose from, that ISIF instead chose to partner with and directly support a foreign private company. Considering ISIF’s dual mandate to invest on a “commercial basis to support economic activity and employment in Ireland” it is unfortunate that Ireland’s sovereign wealth fund chose to support a foreign business instead of working with well established, proven Irish management companies so as to continue the development of the sector and promote domestic employment opportunities.”
Veon recently announced the appointment of six additional forestry professionals to meet the needs of Irish forest owners and cater to the growing demand for professional forestry services throughout the country as the company continues to mobilise more timber from Irish forests for Irish timber processors.