March 24, 2021

By Lynda Kiernan, Global AgInvesting Media

Hancock Natural Resource Group (HNRG), a company of Manulife Investment Management, has acquired 12,874 hectares (31,812 acres) of eucalyptus plantations in Mato Grosso do Sul, Brazil, through its affiliate Sempre Verde Florestas e Agricultura Ltda, from AMATA, through AMATA subsidiary APEI Plantio de Floresta Exotica S.A. (APEI).

Concurrently, Manulife has expanded its impact investing and natural climate solutions team through the creation of the new role of managing director, Impact Investing and Natural Climate Solutions at HNRG. This role will be filled by Eric Cooperström, who will oversee the sustainability and responsible investing capacity for the group’s timberland and agriculture teams.

“We are excited to have Eric onboard as his expertise and background will be integral in developing our impact-first investment strategies,” said Brian Kernohan, chief sustainability officer, private markets, Manulife Investment Management. “We believe forests and farms are natural climate solutions, and we see removing carbon from the atmosphere and storing it in trees and soils as a viable option for investors who are looking to optimize and prioritize carbon sequestration.”

As a part of Manulife’s Private Markets platform, which includes private equity and credit, infrastructure, real estate, timber, and agriculture, HNRG manages 5.6 million acres of timberland across the U.S., Canada, New Zealand, Australia, Brazil, and Chile, and 400,000 acres of prime farmland across major agricultural regions in the U.S., Canada, Chile, and Australia.

“We are pleased to announce this transaction and very happy to return to managing assets in Brazil,” said Bill Peressini, CEO and president, HNRG. “The transaction is significant for our investors and allows for further regional diversification in our portfolios.”

This plantation acquisition represents the second deal for HNRG in South America since the beginning of the year. In late January it was announced that the group entered a new market through the acquisition of a majority stake in David Del Curto S.A. (DDC) – a leading Chilean fruit production, packing, and exporting company.

“The acquisition of DDC opens a new market for our agricultural clients. Both the company’s track record and Chile’s reputation in the global agricultural markets make this an attractive agricultural investment,” Oliver Williams, CFA, global head of agricultural investments, HNRG noted at the time. 

Further expanding its footprint in South America, HNRG now adds more than 30,000 acres of eucalyptus plantations established by AMATA in 2012 to supply the growing demand from the bleached eucalyptus kraft pulp mills, which are proximal to the timberlands.

Much of Brazil’s managed eucalyptus plantations provide raw materials to mills for paper production. However, the market is expanding, with eucalyptus log exports from Brazil growing by 122 percent from 2017-2018, with 89 percent of those exports going to China, according to data gathered by Forest2Market Consultants. And as deforestation becomes an ever-more critical global concern, demand for sustainable wood is growing as well – with Brazilian eucalyptus gaining particular attention as a substitute for exotic woods from the Amazon.

All of AMATA’s forestry operations are FSC certified, and the company operates according to the best practices of environmental, social, and corporate governance (ESG) through sustainable and profitable management to bring its engineered wood products at scale to the civil construction sector in Brazil. 

Over nearly the past decade, AMATA has implemented state-of-the-art technology in the growing and maintaining of the forests, which has resulted in them being in the top quartile for the region.

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

For AMATA, which is a Certified B Corporation founded in Sao Paulo in 2005, this deal aligns with its strategy to accelerate the development of its new business unit: AMATA Urbem – a new brand that develops, manufactures, and sells engineered wood products for use in both 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, CEO, AMATA. “For us, the next target is for our production facility to be fully operational in the second half of 2022.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.