Greenfield projects suitable for commercial timberland are in high demand, but almost non-existent. Relevant is as well that the large pulp mills UPM and Montes del Plata are actively seeking assets as well as large institutional investors such as Greenwood (NUVEEN), Manulife and BTG Pactual.
In October 2023, Montes del Plata and Nuveen Natural Capital Group, filed a request for the authorization for market concentration. The transaction consists of a purchase and sale of shares of 100% of the share package of companies which own eucalyptus and pine plantations in Lavalleja, Rocha, Treinta y Tres, Durazno, Florida and Maldonado. The properties covered by the operation total approximately 32,000 hectares, of which 20,000 hectares are eucalyptus forests used for the production of logs. Based on the technical assessment and given the specificities of the market for the purchase and sale of eucalyptus wood in logs and the market for productive land for forestry activities, the Commission for the Promotion and Defense of Competition considered it appropriate to deepen the competitive analysis and decided to move on to the second stage of analysis of the planned economic concentration operation.
Recently UPM signed a reservation to purchase a property of 4.737 hectares in Tacuarembó. After analysis and consultation with authorities it was deemed suitable for a greenfield project.
Not an easy market for newcomers, but opportunities exist mainly in existing plantations after harvesting when regrowth or replanting becomes the crucial decision. Timberland prices depend on the presence and quality of wood. With eucalyptus trees already planted prices may reach 4.500 to 5.000 USD per hectare. That is for properties that have not yet been harvested. After a first or second cut these prices are significantly lower. One of the advantages is that you know exactly how many hectares can be replanted with commercial forestry.
