Hancock acquires Brazilian timberland and partners for products expansion

Head of timberland investment Tom Sarno says Hancock’s South American expansion will involve work with local companies like AMATA, which plans to open a cross laminated timber facility next year.

Hancock Natural Resources Group has acquired 12,874 hectares of eucalyptus plantations in Mato Grosso do Sul, Brazil and partnered with a local company planning large-scale production of engineered wood products in the country.

The Manulife Investment Management subsidiary announced in mid-March that its affiliate, Sempre Verde Florestas e Agricultura, had acquired the timberland from a unit of Brazilian forestry company AMATA for an undisclosed price.

Hancock highlighted that the deal was its second in South America this year following its January acquisition of Chilean fruit production, packaging and export company David Del Curto.

“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,” global head of timberland investment Tom Sarno said in the statement. “We look forward to working with strategic partners like AMATA to expand in South America.”

AMATA is a forestry company headquartered in São Paulo. Established in 2005, its owners include Brazil’s National Bank for Economic and Social Development and the Brasil FIP Agro Fund, among others. It manages four forest properties within Brazil and the plantations AMATA sold to Hancock were established in 2012 to supply nearby bleached eucalyptus pulp mills.

AMATA’S Urbem unit supplies engineered wood products including glued laminated timber and cross laminated timber, which is produced by gluing layers of wood together side by side and on top of each other to form panels capable of withstanding heavy loads. Engineered wood products are treated with chemicals to enhance pest and fire resilience and are considered a sustainable alternative to concrete and steel in civil construction.

AMATA has a technical and commercial partnership with KLH Massiveholz, an Austrian company credited with pioneering cross laminated timber in 1996 with the Technical University of Graz.

Chief executive Ana Bastos said in the statement that Urbem’s technology was used in the construction of a multi-story building in Brazil last year. AMATA expects its production facility supplying engineered wood products to domestic and international markets will be operational by the second half of 2022.

Forest Research Group economist Jack Lutz told Agri Investor cross laminated timber has been a topic of interest among timber producers for years and is starting to be used more often in construction. Though still seen as somewhat experimental, he said, prominent examples of cross laminated timber buildings have been constructed in Canada and Australia.

“There are a lot of people building very tall wood buildings, and my definition of very tall is above three stories. They are getting up to 17, 20 stories and a lot of that building tends to use cross-laminated timber,” he said. “It’s very strong structurally and its wood; it’s not like they are putting wood shingles on the outside of a steel and concrete building.”

Hancock declined to comment. The Boston-headquartered firm manages a timber portfolio that includes 5.6 million acres located in the US, Canada, New Zealand, Australia, Chile and Brazil.