David Nunes, president and CEO of Rayonier (NYSE: RYN), joined REIT.com for a video interview at REITWeek 2017: NAREIT’s Investor Forum at the New York Hilton Midtown.
Nunes provided his outlook for the timber market in China. He pointed out that the Chinese government’s ban on harvesting native forests in the northeastern part of the country has impacted the supply of timber inside the country. “We’ve seen that benefit all of the log exporters into China,” he said.
The result has been higher levels of consumption than history dictates, according to Nunes. In 2017, inventory levels have declined rapidly. The current balance between inventory and demand suggests markets will remain stable and possibly improve, he said.
“That has been a real positive in terms of how we look at China,” Nunes commented.
Earlier this year, Rayonier acquired timberlands in the southeast of the United States through three separate transactions. “Our forestry guys are as excited about those as they have been in over a decade in terms of the quality of the assets,” he said.
Nunes pointed out that the assets are “highly productive.” The recently acquired timberlands are generating sustainable harvests that surpass the averages of both Rayonier and the broader sector, he said. According to Nunes, the acquired lands will help improve Rayonier’s financial results.
Regarding stories that Rayonier is watching, Nunes said the company is keeping an eye on the softwood lumber agreement between the United States and Canada.