Annual Report
28 April 2005

We are pleased to report as follows:

Growth & Form
The Marlborough and Canterbury weather in the last 12 months has been pretty good from a forest grower's point of view. A mild autumn and winter; a slow cool wet spring; regular rain in the first half of summer and a moderately dry second half; then a mild, sunny, still autumn but not too dry. Less wind than average and lots of rain in December have been excellent for growth and form.

Growth Compared to Forecasts
Your Radiata pine is on average, about a year (or 12%) ahead of the StandPak growth models done in 1996 by the partnership's Consultant. What is more, at Paratu and Chimney Creek we are achieving a significantly better 'DOS' (Diameter Over Stubbs). This is the diameter of the knotty core within the pruned log and it will significantly influence the value of the clearwood log at harvest. It's about 10% smaller than forecast. At Ramshead it was forecast to be 16cm and it is.
That the growth models are turning out to be quite conservative is of course a good thing. It is mostly Ramshead and Paratu that are well ahead but they are in areas with little or no nearby plantations for growth model calibration, so being conservative was prudent. Whereas Chimney Creek has other forest all around so it had a proven site productively in the first place.

Last 12 months work: Pruning, pruning then thinning

Ramshead. The fastest growing area (13ha) had its second pruning lift to 4.7m and will be ready later in the year to have a third lift to 6.5m. The second stand (60ha) has begun its second lift to over 6m and will be completed by the end of this year. The small remainder (~7ha) is about to have a one-off variable lift to over 4m.

Paratu. This stand (32ha) is having its second lift to over 6m at the moment. We delayed this lift, as form was very good (i.e. not too fat or big branched) and so we will complete pruning in two lifts instead of three. This saves costs. We are also carrying out a partial thinning at the same time, from 860 stems per hectare ('sph') to 600sph. A final thinning to 350sph will follow in a year or so.

Chimney Creek. Most (130ha) of this forest is a year younger than the other two, and some is two years younger. The first pruning lift of the older stand has been done and averages 3.5m, which is good. This may well give us the option of getting to an acceptable height in two lifts rather than three, thereby lowering the average cost per metre. The second stand of 30ha may require some pruning by the end of this year but more likely next year. Some of this area high up on the site may not warrant pruning. Any unpruned area, and almost every stand has some, becomes 'framing' which means a higher stocking is retained to suppress branch size. The objective is to grow as much small-knotted material as possible. Knot size is one of the key determinants of timber strength, and hence its value.

Supervisor/Auditor, a Key Man
Every forest operation, like a pruning lift is managed, measured and audited by a forest operations manager. For Chimney Creek and Ramshead we've had Dave Fincham in that role since before site preparation began. First he was with Peter Evans & Co Ltd. That then became part of PGG Forestry, which was then sold to Wrightson Forestry Services. Further change may be afoot but we hope to retain David's expertise and experience for the partnership. He seems to have done quite a good job.

Kind regards,
Charles Etherington,
Manager
Warren Forestry Ltd

Warren Forestry Ltd, New Zealand forestry investment provider
Warren Forestry Ltd, New Zealand forestry investment providerWarren Forestry Ltd, New Zealand forestry investment providerWarren Forestry Ltd, New Zealand forestry investment provider