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Nature Conservancy targets SW Arkansas sites.

WITH ALL ITS 6.8 MILLION acres of timberland in the U.S. up for sale, including 690,000 acres in Arkansas, International Paper Co. struck a deal last week to sell The Nature Conservancy and The Conservation Fund some 218,000 acres in the South for about $300 million.

In Arkansas, the deal includes six sites that cover 8,123 acres in five counties in the southwestern part of the state, according to Joe Fox, director of conservation forestry with the Arkansas field office of The Nature Conservancy. A breakdown of the price paid for the parcels in Arkansas was unavailable.

In all, The Nature Conservancy itself will buy more than 173,000 acres in North Carolina, Virginia, Georgia, Florida, Alabama, Tennessee, Louisiana and Mississippi, in addition to the Arkansas timberland.

Under the terms of the agreement, timber will be sustainably harvested from some tracts, and a set amount of timber volume will be supplied to IP for local production. Sensitive areas, however, will continue to be set aside from harvesting activities.

Eventually, Fox said, the parcels will probably be sold to the Arkansas Natural Heritage Commission, the Arkansas Game & Fish Commission or the Arkansas Forestry Commission to protect endangered forests and species.

The largest site in Arkansas, 4,778 acres, is at Poison Spring near the border between Ouachita and Nevada counties and close to the state park and wildlife management area already owned by state agencies.

Although the site is about two-thirds pine timberland, Fox said, there are about 22 rare plants in the deep, sandy soil of the area.

Palmetto Flats in Little River County is the second-largest site at 1,847 acres. Located southwest of Ashdown in the Red River floodplain, the flat wooded area has very, distinctive natural prairie mounds, Fox said. Two-thirds of the bottomland area has hardwoods with beaver ponds and is a habitat for ducks.

The Oak Ridge Ravines site near the Hempstead and Howard counties border east of Millwood Lake is 1,018 acres with lots of big oak trees, including a species called Durand oak that is rare in Arkansas. It borders the Natural Heritage's Nacatoch Ravines Natural Area.

The smaller sites include the Grand View Blackland Prairies in Hempstead County northwest of Old Washington at 228 acres; the Falcon Bottoms near the border of Nevada, Columbia and Lafayette counties at 143 acres; and the Miller County Sandhills at 108 acres.

The Sandhills site is only about a quarter of a mile from the Texas line, Fox said, and features some 23 rare plants in the deep sandy soil, including the bluejack oak.

While The Nature Conservancy seeks to preserve forests and the animals and plants that live there, most of the land that IP has for sale in the state doesn't have any particularly high ecological value since much of it has been cut over and replanted in pine.

Fox said the deal with IP isn't expected to close until June, and it could be one to three years before the conservancy can possibly sell the sites to state agencies that will make their preservation permanent.

For The Nature Conservancy, the deal is the largest financial commitment in its 55-year history. The nonprofit got financial backing from Conservation Forestry LLC and its consortium partner, Forest Investment Associates, to complete the project.

"This historic transaction demonstrates the compatibility of environmental, recreational and economic interests, and is a testimony to International Paper's legacy of sustainably managing healthy, working forestlands and protecting special forestlands for 108 years," said John Faraci, IP's chairman and CEO. "As we consider the sale of our U.S. land holdings, we saw this as an important opportunity to protect in perpetuity' many of our most ecologically significant lands."

International Paper, the world's largest paper and forest products company, announced last year that it is in the process of not only selling all of its timberland but re-structuring the entire company to focus on its more profitable business--mainly uncoated paper and packaging.

At the time of the announcement, the company said it hoped to make an announcement about divestment by the second quarter of this year.

Among the properties up for sale is the large Pine Bluff paper mill, which employs more than a third of IP's 3,000 workers in the state. Its main product is coated paper used in beverage products.

The company's two sawmills at Leola and Gurdon are also being shopped around.

While the company is shedding a large portion of its U.S. properties, it has been increasing its international presence to cut costs.

Last week, IP expanded its coated paperboard business by forming a joint venture with privately owned Shandong Sun Paper Ltd. in Yanzhou City, China.

The $140 million deal includes two coated paperboard machines at Yanzhou City, as well as construction of a third coated paperboard machine, expected to be completed in late 2007.

Faraci said the venture will boost IP's global packaging customer base. The companies expect to complete the deal early in the third quarter.

The company has made several deals overseas since making its restructuring announcement last July to "improve returns, strengthen the balance sheet and return cash to shareholders." In all, IP's restructuring involves selling $8 billion-$10 billion in assets. Last year the company posted earnings of $1.1 billion on sales of $24.1 billion.

Since 2001, IP has shed 31,400 jobs, and the company now has 68,700 workers.

Last summer, Pine Bluff mill manager Calvin Staudt, attempting to allay any fears that the mill might be shuttered, assured local civic leaders that IP was serious about finding a buyer.

Staudt said it was a profitable prize that some other papermaker should quickly snap up. He said he thought the mill could bring $800 million-$1 billion.

Although a sale is expected in the next 30-60 days, Staudt said last year that the company would "re-evaluate the mill if there's no sale by the end of 2006."

While the Southern forest deal was the single largest private land conservation sale in the history of the South, The Nature Conservancy also went shopping for some of IP's land in Wisconsin last week.

Since it announced it would sell its timberland, IP has let The Nature Conservancy pretty much cherry-pick what it thinks to be sensitive areas that should be preserved.

In Wisconsin, The Nature Conservancy is buying 69,000 acres of forestland for about $83 million. Like the Southern deal, the agreement also includes a fiber supply agreement.

The Wild Rivers Legacy Forest project represents the largest land conservation effort in Wisconsin's history and one that will protect working forests, public access for recreation, wildlife habitat and water quality.

In the Southern Forest Conservation Project, the Conservation Fund bought more than 5,000 acres in Florida and 500 in North Carolina. It and The Nature Conservancy jointly purchased an additional 39,000 acres in South Carolina in addition to the 173,000 acres The Nature Conservancy bought alone.

IP said it would continue to explore sale opportunities with nonprofit conservation groups as well as other private or public companies interested in the remaining timberlands.


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Author:Henry, John
Publication:Arkansas Business
Geographic Code:1USA
Date:Apr 3, 2006
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