Resource Management Service Uses Forest2Market for Due Diligence

When Resource Management Service (RMS) considered purchasing 4.2 million acres of timberland from one of the biggest paper companies in the world, it looked to Forest2Market to gauge the market price.

For RMS, an independent investment management firm managing forest investments throughout the southern U.S., a deal this size is uncommon and negotiations are often difficult. “It speaks loudly when we reference Forest2Market’s value for timber in a particular location,” said Dale Weizenecker, manager of forest operations for RMS. “Forest2Market’s data is well established. International Paper—as well as others—accept it, and it is a useful basis from which an agreement can be reached."

"A Great Tool"

With about $3.3 billion in current assets under management, RMS is one of the largest forestland investment managers in the world. For many of its negotiations, RMS uses the Forest2Market Delivered Price Benchmark service, which allows it to evaluate its performance against its peers. The service uses actual data from major forest product industry players to establish credible benchmark costs for delivered raw materials, including every variable associated with getting a tree removed from the forest and delivered to a mill. RMS uses the Delivered Price Benchmark Service to see how it stacks up against its competition. “The delivered pricing service really lets you see what the market is saying about the different benchmarks for delivered materials,” said Weizenecker. “Being able to see the price breakdown for what it takes to get the wood delivered is a great tool.”

RMS Growth and Yield Models Uses Forest2Market Data

Weizenecker said the Forest2Market stumpage database has been especially helpful. “The transparency and detail associated with the Forest2Market data allows RMS to more precisely determine when to harvest trees." Weizenecker added, “Where we once applied a regional pricing model, Forest2Market data now allows us to determine harvest timing on a market specific basis, an important element to improving investor returns.” A key factor to timber pricing is tree size. “We use Forest2Market’s pricing numbers in our model to calculate exactly what our timber is worth,” he said. “It tells me what size tree we should be growing based on local market factors.”

Weizenecker said RMS, which has been using Forest2Market services for many years, will continue to look to the company for advice in the future because its data is more reliable than any he has seen. “Forest2Market affords you confidence when you make important business decisions,” he said. “Its data speaks with authority.”