Over the past few decades, industrialization has taken its toll in the province of Punjab. Rapid increase in population, soaring demand for energy as well as raw material (wood fibre) for the wood based industry and governance issues relating to forest management are changing the way the province sees and values forests.
All too often, forests have been used to cope with the ongoing energy crisis and catering to demands of the wood based industry in the face of expanding business interests. Keeping in mind the future role of forests as a backbone of sustainable economies, better utilization of the blank areas and the new emerging climate change imperative (Social Corporate Responsibility), Awais Ahmed khan Leghari, Member of National Assembly persuaded the provincial policy makers for a shift from traditional forest management to a sustainable forest management regime. He convinced the decision makers to encourage private investment especially from the wood based industry as well as progressive farmers through a legally recognized Forest Company to reforest the designated blank areas of Punjab Forestry, Wildlife and Fisheries department. If the idea succeeds, a win-win opportunity both for the government as well as private sector would be inevitable and would create new jobs in the rural economy and provide a sustained source of raw material to the industry.
After rigorous efforts, Mr. leghari succeeded in establishing South Punjab Forest Company (SPFC)” to address the needs of institutional investors seeking returns and low risk over a long-term period. SPFC, a Punjab Government entity was established under section 42 of the Companies Ordinance, 1984 as a public sector company, in order to stimulate private sector investment alongside public money to reduce deforestation in Punjab and to combine forest conservation with sustainable economic development. The investment objective of the Company is to encourage the investment in assets that can be established and managed on an environmentally and socially sustainable basis. The Punjab Forest Department after approval of Government of the Punjab assigned a blank area of 134,995 acres to the SPFC mainly falling in D.G. Khan and Bahawalpur Civil Division at various sites, with variant areas. The aforementioned areas are generally under the category of Riverain Forest requiring considerable investment for afforestation, as the reliance has to be made on ground water.
In view of this attractive opportunity, the SPFC will act as a vehicle that combines socially and environmentally responsible forestry investment with unique potential for stable and attractive returns through participation in the value chain of competitive and sustainable industries. The Company also aims to build a diversified timberland portfolio in terms of age, class and species that is intended to maximize the risk/return profile. The Investors will aim to build a diversified portfolio of sustainable long-term profitable investments. Selected investors will invest in trees and other timber related assets with an emphasis on investments in high biological growth plantations and will be aligned with the three pillars of the forest Company’s business philosophy:
- Social and environmental sustainability
- A balanced portfolio of wood fibre end-uses
- Cost and quality competitive Projects
The Company believes that this approach will generate both long-term capital appreciation for partners and an attractive and sustainable income yield. SPFC will seek investments in forestry projects that are or will be certified by a reputable forest management certification scheme.
