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• AFRICAN FORESTRY COMPANY SECURES HSBC INVESTMENT
• 29/9/2008

AFRICAN FORESTRY COMPANY SECURES HSBC INVESTMENT

LONDON, September 29, 2008:

The UK based New Forests Company announced yesterday that it had secured a US$8.5m equity investment from HSBC  Principal Investments to help underpin the company’s plans to become the largest tree planter in East Africa.

The investment by one of the world’s largest banks into the company’s Uganda subsidiary marks the growing interest of UK private equity funds in finding attractive investments in Africa.

The New Forests Company, which was started in 2004, is a plantation timber company with operations in Uganda and Mozambique with a triple bottom line business model based on commercial profitability, environmental sustainability and social responsibility. As well as becoming one of Africa’s biggest tree planters, the company has a large commitment to conservation forestry through enrichment planting of indigenous tree species and an ambitious programme of community development in education, health and clean water projects for the communities in which it operates.

The company has already become the largest tree planter in Uganda and the country’s biggest investor in the forestry sector. By the end of this year the company will have planted more than 14,000 acres of commercial trees since 2006 in a planting plan which aims to establish  about 65,000 acres by 2014 with an investment plan of about $30m.

New Forests is also active in Mozambique and plans to develop the company into a vertically integrated pan-African forestry group manufacturing diversified woods products like sawn timber, transmission poles and construction materials for  the local, regional and export markets.

“We are delighted to have a blue chip investor like HSBC on our share register,” said Mr Julian Ozanne, Chief Executive. “Timber demand and prices are growing globally and sustainable plantation forestry will be the only way to save Africa’s threatened indigenous forests and meet growing demand on both the continent and abroad from the likes of India and China. The natural resources sector, especially land backed businesses, are increasing attractive in Africa.”

The equity deal by HSBC was made by the bank’s African principal investments business. Under the NFC deal, provision is made for HSBC’s investment in the group to expand to $23.5m as the company rolls out its business model to other countries and begins setting up manufacturing plants.


CONTACT:
Esther Porta, +44 207 351 7374
Julian Ozanne, CEO: +447770915204
Edward Marlow, Managing Director, HSBC: +447920506790