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Kangaroo Island Plantation Timbers has 6.4% of stocked plantation area affected by bushfire

A flexible business model allows KPT to reschedule harvesting for other plantations and reduce the apparent cost to its biological asset value resulting from the fire.

Kangaroo Island Plantation Timbers Ltd - Kangaroo Island Plantation Timbers has 6.4% of stocked plantation area affected by bushfire
The insured value of standing timber in the affected area is $11.6 million

Kangaroo Island Plantation Timbers Ltd (ASX:KPT) has been impacted by bushfires on Kangaroo Island with around 891 hectares or 6.4% of the net stocked area affected as at 12pm on December 22, including pines and eucalypts.

The insured value of standing timber in the affected area is $11.6 million, which represents 10.1% of the total insured value of the timber estate.

Insurance covers standing crop

KPT’s fire insurance covers the standing tree crop and allows for miscellaneous costs, including a contribution towards direct firefighting, clean-up and replanting, amongst other things.

This fire insurance policy has a $5 million excess.

The company will not be able to determine the potential for salvaging fire-damaged timber until the fire ground is declared safe and public access is granted.

KPT said the fire would not impact upon its capacity to provide throughput for the proposed KI Seaport

and chip handling facility at Smith Bay, as the affected areas could be prioritised for harvest and re-established in an orderly manner.

“This flexibility in the business model allows KPT to reschedule harvesting for other plantations and reduce the apparent cost to the company’s biological asset value resulting from the fire.”

Independent growers affected

Three independent tree-growers on the island were also affected by the fires with both pine and eucalypt three crops damaged.

KPT has spoken to these growers about the potential for salvage and replanting operations and will work closely with them to produce the best possible economic outcome.

Fire plan

The company has a fixed plan and operates to industry standards in preparing for and responding to bushfire.

Throughout the week leading up to the fire that began on Friday, December 20, company staff were on active surveillance and prepared to respond as necessary.

In this regard, the company is supported by its professional property manager PF Olsen, contract firefighting service providers Rencon Contracting and A&M Contracting, and on-island earthmoving contractor A&G Willson Earthmovers.

Under the direction of the South Australian Country Fire Service (CFS), the company mobilised its resources and those of its partners.

Company support

With back-up personnel made available from the mainland, KPT provided 10 certified field personnel and two officers, one fire tanker and three mobile units, together with local contract earthmoving plant.

KPT managing director Keith Lamb was on the island for most of the period in which fires were active and remains there, assessing salvage opportunities, speaking with independent growers and supporting and thanking the firefighting team.

The company will continue to provide support services under the CFS structure until the fire is declared over, after which it will continue with internal mop-up and remediation.

In a statement, KPT said: “The company thanks all members of the Island community, and those who came over from the mainland, who contributed to the effort to limit the spread of fire and to protect life and property.

“The company is pleased to report that all members of its own staff and those of its contractors stayed safe throughout the firefighting incident.”

Quick facts: Kangaroo Island Plantation Timbers Ltd

Price: 1.96 AUD

ASX:KPT
Market: ASX
Market Cap: $110.59 m
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