IKEA-linked firm buys 1118 hectares at Gore for forestry

Tuesday, 7 June 2022

A southern councillor says selling farm land to overseas companies for forestry is short-term gain for long-term pain.

Subsidiaries of Ingka Group, the largest worldwide franchisee of IKEA stores, got Government-approval to purchase 1118 hectares at Waimumu, near Gore, in April.

Information from the Overseas Investment Office says the property was a sheep and beef farm.

Ingka Investments Forest Assets NZ and Ingka Investments Management NZ estimate about 87% or 977h would be planted with predominantly Pinus Radiata.

**READ MORE:

* Malaysian company buys 264ha of land for forestry near Tuatapere

* Government to make it harder for overseas investors to buy land for forestry

* Ikea's investment arm snaps up Wisp Hill Station for forestry project

**

Gore district mayor Tracy Hicks understood the deal was for a productive forest, not a carbon forest.

Gore district councillor John Gardyne said the sale of farm land for forestry, to international companies, was short-term gain for long-term pain.

“From a government’s point of view, that farm’s going to an overseas company, and are the profits going to be tax paid (sic) in New Zealand or are they going to be taken overseas?”

“We’re selling our gold and silver really, for short term-gain, long-term pain.”

Gardyne’s concern about overseas companies turning pastural land into forestry was multi-faceted; the way water flowed changed from pastural to forest and the land was tied-up for years whereas grazing brought annual activity.

Ingka Group got Overseas Investment Office approval to buy 5499h at Clutha in August 2021. About 54% of that would be planted, and 36% would be unplanted land including native bush potential regeneration land.

Both the Clutha and Waimumu deals were made with the “special forestry test” in the Overseas Investment Act 2005.

The Overseas Investment (Forestry) Amendment Bill is currently in its first reading; the proposed change means an overseas investor wanting to buy land for production forestry will be considered under the “Benefit to New Zealand test”, rather than under the streamlined special forestry test.

Gardyne said the amendment needed to be brought in. Environment minister David Parker introduced the bill.

National Invercargill MP Penny Simmonds said it was sad the amendment would be “too late” for the Waimumu property.

National would be supporting the Government bill, she said.