Chip Collins of the Forestland Group, LLC recently appeared on Growing Business with Aaron Niederhelman. A prior Director of the National Fish and Wildlife Foundation and Vice President of the Land Conservation, Collins has worked for the Chesapeake Bay Foundation and served on the Board of the Great Mountain Forest Corporation. Currently, Collins is Managing Director of The Forestland Group, an independent timberland investment management organization (“TIMO”) focusing on managing, selling and renewing both hardwood and softwood. The Forestland Group is the fourth largest landowner in the United States, currently managing over 4.8 million acres of forestland.
The difference between hardwood and softwood relates to seed propagation techniques rather than wood density. To regenerate, Hardwood trees produce seeds with a covering (e.g., an apple, an acorn) while softwood trees produce uncovered seeds (e.g., pine trees). Softwoods trees grow faster, and are generally more available. As a result, large businesses traditionally focused on the harvesting, sale and regeneration of softwood, for use primarily as construction lumber in the building boom after World War II, and for production of pulp for paper. By contrast, Hardwood tracts traditionally were ignored by large companies and remained family owned. Thus there are many differences in the way the tracts are managed, the way they are harvested and regenerated. Not only are hardwood tracts very diverse (as many as 8-15 species) may exist, often times hardwood tracts suffer in quality due to their primary use being appearance-based (e.g., furniture, cabinets, moldings). For decades, certain family managers may have consistently harvest the highest quality wood, leaving only the lower quality wood to propagate. Collins discusses his belief that it takes a different set of skills to successfully manage a hardwood tract. Seeing a need for a cohesive approach to the management and renewal of hardwood tracts, he and some like-minded colleagues formed The Forestland Group in 1995.
The Forestland Group seeks to use proven financial and forest management concepts to provide value for its investors. The Forestland Group seeks attractive financial returns by maintaining diversified portfolios of forestland, and practices responsible harvesting to generate periodic cash flow for its investors and accelerate the growth of remaining timber. In his appearance, Collins discussed the firm’s efforts to do so in a socially responsible manner, and the commitment to maintaining the natural ecology and integrity of the forest where possible. Collins believes that, as investors continue to value sustainable, responsible corporations, more and more investors will be led to forestry. Also making forestry an attractive investment, according to Collins, is that it tends to generally not go down with the rest of the market, but remain fairly neutral, and be up in a down market. Finally, he believes that the growing relationship between the private sector and land organizations will continue to increase sustainable growth strategies, increasing opportunities in this area.
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