"This move demonstrates our strong commitment to the industry...

"This move demonstrates our strong commitment to the industry
and its investors as we move into the next phase of industrial
export operations," Timbercorp chief executive Robert Hance said.
"The transfer of our forestry assets to a joint venture company
with the critical mass to compete more effectively on the global
commodity stage is a timely opportunity that will bring significant
benefits.
"At a time when Timbercorp forestry projects are entering the
harvesting cycle, a partnership with Futuris will strengthen our
export marketing and negotiating capacity, bolster supply chain
management expertise and provide a valuable link with Elders and
Elders Rural Bank."
Elders Ltd is the largest profit generator for Futuris.
Futuris chief operating officer Les Wozniczka said the company's
entry into the hardwood plantation sector was next step in its
timber strategy which was initiated with the provision of loan
finance to ITC in 2001.
"Timbercorp is acknowledged as the leader in the promotion,
funding and growing of plantations in Australia," he said.
"We are delighted to join them in an enterprise that will be the
major player in Australian plantations hardwood at a time when the
industry is poised to really take off."
He said it would bring a complementary and diversified earnings
stream to Futuris that was long term, stable and largely unaffected
by short term weather patterns.
"There are also natural synergies with Elders. Elders can bring
services which are core to plantation development and management,
such as real estate, finance and agricultural inputs supply as well
as strong commercial relationships with Japanese primary produce
buyers," Mr Wozniczka said.
Elders recently entered into a supply chain alliance with Nissho
Iwai, one of the leading importers of timber into Japan.
Allan Bryant will be managing director of the JV having formerly
managed Futuris Asia Pacific automotive operations.
Tim Browning from Timbercorp will be chief operating officer.
Harvesting of tress in the plantations is scheduled to commence
in the first half of the 2004 financial year.
Annual harvest volumes are expected to exceed 400,000 tonnes in
2004 and to rise to average over three million tonnes per annum in
the 10 years to 2013.
Futuris yesterday exercised options taking its shareholding in
ITC to 50 per cent and said it intended to pursue its investment in
timber via ITC which has become a subsidiary of Futuris.
The transaction is subject to due diligence by the companies,
legal approvals and ratification by the board of ITC as well as
successful completion of a rights issue by ITC, fully underwritten
by Futuris to raise $10 million.
The merger is scheduled for completion by the end of November.
AAPt