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IP sale of almost 5.7 million acres is sign of the times
In a move foreshadowed by global market changes in the forest products industry, International Paper Company (IP) recently announced sales of 5.675 million acres of timberland, reports the Wildlife Management Institute. The divestiture is part of a three-part strategy announced by IP in 2005, to improve returns, strengthen the balance sheet and return cash to shareowners. The strategy proposed to improve shareowner returns by improving and/or realigning IP mills and evaluating sale of IP forestlands in the United States. IP projected that divestitures would return $8 billion to $10 billion. If forestland sales proceed as expected, proceeds likely will be $11 billion or higher.
Forestland sales have been spread between the Southeast and Great Lakes States. Buyers include The Nature Conservancy (TNC) (173,000 acres in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Tennessee and Virginia, and 69,000 acres in Wisconsin), The Conservation Fund (1,000 acres in Florida and North Carolina and 39,000 acres in South Carolina (with TNC as a partner)), and timber investment-management organizations (275,000 acres in New York, 440,000 acres in Michigan and 4.67 million acres in Louisiana, Texas and Arkansas).
Impacts to wildlife and recreational access are not yet clear. Most of the lands purchased will be governed by a 5-, 10-, 30- or 50- year fiber supply agreement, so forests will continue to be harvested for forest products. Changes in the landscape are likely, however, as new owners advance towards different market products or focus on nontimber assets.
IP has a long history of participation in the Sustainable Forestry Initiative (SFI), and the majority of acres sold included provision that the lands would continue to be managed and third-party certified under the requirements of the SFI Standard. The SFI Standard integrates the production and harvest of forest products with conservation of soil, air, water quality, biological diversity, wildlife and aquatic habitat, recreation, and aesthetics.