Corporate Woodland Holding “No budget? No problem!”
Tata Steel, outside the core steel making business, has significant land and property holdings, including 135ha of commercial woodlands. Much of this woodland is planted in very challenging sites following mineral working and present an ongoing management obligation.
Maximising revenue from forestry
Along with many others, Tata Steel’s management team was keen to ensure these woodland property assets, which are so often seen as a liability, were managed to maintain their capital asset value and maximise any potential revenue opportunities. However, with little budget to secure the required works, these were seen as peripheral to the core business. The issues for the Tata Steel sites were additionally complex due to the only partially restored landform and poor soils. The woodlands were also covered by a dedication covenant with the Forestry Commission which was coming up to renewal.
Specialist timber harvesting
Environmental planning and forestry consultants Lockhart Garratt were asked to consider options and opportunities that could be delivered on a no net cost and no risk basis. Following a detailed evaluation of the woodland asset and discussions with specialist timber harvesting contractors, a number of options were considered. Lockhart Garratt’s Forestry team then presented a shared-profit solution that ensured the delivery of a high quality silvicultural thinning operation with the necessary access infrastructure required and with no up-front cost.
Objectives around selling timber
The proposals met all of Tata Steel’s objectives and Lockhart Garratt’s Forestry team then took forward the implementation plan including:
- Renewing the Basis II Dedication Plan of Operations with the Forestry Commission;
- Specifying and tendering the timber harvesting work;
- Liaison with the shooting tenants and other users;
- Silvicultural management and supervision of contract work;
- Invoicing, administration and security of timber income;
- Health and safety; and
- Ecological constraints management.
The contract saw some 700 tonnes of sawlog timber, together with additional products secured from a fully sustainable silvicultural thinning operations, access improvements and the delivery of a five figure nett cash return to Tata Steel as landowners.
Accessing woodland resources
Matthew Willetts, Senior Forestry Consultant, commented,
Working closely with excellent contractors and operators on site we were able to access and manage parts of the woodland resource that had not been accessible previously. The outcome is a healthier and more secure woodland asset that will now develop towards a high quality mature timber crop.
Often forestry and woodland is seen as the poor relation in a rural property portfolio. However, this often does not have to be the case and with improved markets, a weaker pound and UK sawmills keen to secure locally grown timber, woodlands can (and often do) represent a useful, untapped asset.
- The woodland was seen as an unwanted cost centre – now it is seen as useful asset.
- The capital value and environmental condition of the woodland has been enhanced and further income opportunities secured for the future.
- The first phase of operations secured a meaningful nett cash return for Tata Steel as landowner.
Yvonne McLetchie of Tata Steel stated,
We are delighted at how this project has worked. Lockhart Garratt worked within our very restrictive objectives and delivered an effective solution which had not been offered to us previously. We are delighted with the outcome and will be working with them to deliver the next phases of the project.