On Tuesday, Manulife Investment Management announced that its farmland investment subsidiary, Hancock Natural Resource Group (HNRG), which manages 5.6 million acres of timberland and 400,000 acres of prime farmland on multiple continents, has acquired 12,874 hectares of eucalyptus plantations in Mato Grosso do Sul, Brazil.
Manulife and HNRG transacted through a South American affiliate, Sempre Verde Florestas e Agricultura Ltda., to buy the plantations from Sao Paolo-based forestry and wood products supplier AMATA, through the latter’s subsidiary APE1 Plantio de Floresta Exotica S.A..
Manulife Investment Management said in a company announcement on Tuesday that the acquisition is aligned with its priority of strategic investment in private market assets across timber, agriculture, infrastructure, real estate, private equity and credit.
AMATA started the transacted eucalyptus plantations back in 2012 to supply growing demand from bleached eucalyptus kraft pulp mills located near the timberlands. Since that time, AMATA has provided high-level technology to grow and maintain the forests, resulting in top quartile plantations for the region.
“We are pleased to announce this transaction and very happy to return to managing assets in Brazil,” said Bill Peressini, Hancock Natural Resource Group’s CEO and President. “The transaction is significant for our investors and allows for further regional diversification in our portfolios.”
This is the second acquisition that Manulife Investment Management timber and agriculture group has closed in South America in 2021. Earlier this year, Manulife acquired a majority stake in Chilean fruit exporter, David Del Curto S.A. (DDC). DDC produces over ten fruit varieties across eleven Chilean farms, and also operates three packing facilities with a capacity of nine million boxes of fruit, accounting for 1.7 percent of Chile’s fruit volume, with 90 percent of its sales directed to Europe, North America and Asia.
Tom Sarno, global head of timberland investments added, “We look forward to working with strategic partners like AMATA to expand in South America. Given the region’s volume of high-quality real assets and its importance to global commodity markets and future supply chains, these acquisitions are an opportunity for us to build out our investment platform for clients.”
AMATA
For AMATA, the deal is strategically aligned with its efforts to speed up development of its “engineered wood” division, AMATA Urbem. AMATA Urbem develops, manufactures, and sells engineered wood products for use in domestic and international markets.
“Last year, the first multi-story building in Brazil was constructed with Urbem technology and the market for engineered products continues to expand,” said Ana Bastos, AMATA’s CEO. “For us, the next target is for our production facility to be fully operational in the second half of 2022.”
Ana Bastos, a chemical engineer by training, has been an outspoken advocate in Brazil for the use of forestry concessions in incentivizing sustainable forest management. Brazil passed a Public Forest Management Law in 2006, granting concessions to private enterprise to cultivate and harvest 43.7 million hectares of forestland, although some critics note that broad uptake and development of a scalable, sustainable business model around forestry licensing has been slow.
