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Investors drive creation of vast new commercial woodland

Investors keen to take advantage of forestry’s top-ranking position in the UK investment market are driving the creation of one of the largest commercial woodlands to be planted in the UK for over a decade.

UPM Tilhill, the UK’s leading forestry and timber harvesting company, is responsible for the operational delivery of the project which began this month. The company’s South West Scotland District will oversee the planting of 1.2 million trees across 815 hectares (2,013 acres) at the Westwater estate in the Scottish Borders near Langholm.

FIM Services Limited (FIM) acquired the estate for a private client in 2006 with the aim of converting areas of over-grazed pasture to woodland to create a well designed forest with a good proportion of improved Sitka Spruce. FIM are leading the overall investment which has the support of the Scottish Government in recognition of the important role productive forests play in terms of carbon sequestration and in the production of renewable materials.

Colin Lees-Millais, Director of FIM Services explains: “There are currently real opportunities for a major expansion of UK forestry. Increasing recognition of the versatility of timber is leading to growing international demand and this is driving prices. A combination of new technology and increasing energy prices is favouring the use of wood, whether as a building material or as a source of bio-fuels."

"For example, a new wood-fired power station has just opened at nearby Lockerbie, and another is already under construction at Irvine. Wood is also the energy source for \'2nd generation\' liquid bio-fuels."

Last year, UK Forestry was the top performing asset class in the UK according to the IPD survey, with an average return of over 20%. This performance is due to a combination of rising timber prices and underlying land values.

“With its low correlation to equities and commercial property, forestry can form an important part of the smart investor\'s portfolio and can also be extremely tax efficient," added Colin.

Tim Liddon, District Manager for UPM Tilhill, will manage the operational delivery of the project: "Southern Scotland is one of the best places in the world to grow timber. Our Sitka spruce thrives on the mild climate, converting misty sunlight, drizzle and carbon dioxide directly into timber. Our competitive timber industry is then well-placed to supply the large UK timber market. Unbelievably, the UK is still one of the world\'s largest timber importers - competing with countries like the USA, Japan and China for the wood it needs."

UPM Tilhill led the woodland design consultation process over an 18 month period, working in consultation with organisations such as Forestry Commission Scotland, Scottish Natural Heritage, Historic Scotland and the RSPB. To ensure that Scottish wildlife and the natural environment also benefit from this investment over 100 acres of new native woodland will be introduced into the broader design which is itself sympathetic to the landscape character of the Scottish borders. Across the site, landscape features will be introduced to encourage species such as red squirrels, otters and black grouse. These include the creation of new areas of semi-natural riparian woodland; the maintenance of open moorland areas and ‘softer’, less intensive planting along woodland borders.

John Gallacher, Forest Ecologist, UPM Tilhill, said: “Through the consultation process we have been able to ensure a sustainable and attractive woodland design to demonstrate that, even within an extremely productive site, the natural environment and wildlife can also reap significant benefits."

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For further information please contact:
Ruth Roy
01892 861008/07771 940494
ruth.roy@upm-kymmene.com