American Forest Management has the biggest timber and land-management business in the nation
There’s an age-old saying: “Money doesn’t grow on trees.” Well, in the business of timber management and land-sales services, it gets pretty darn close, with the biggest in the business based out of Charlotte. American Forest Management has more than 1,200 clients, oversees more than 6 million acres and has coordinated land transactions topping $3 billion.
Bartow “Bo” Shaw Jr. started the company in Sumter, S.C., in 1966 and expanded to Charlotte in 2001 when he bought a larger rival, Canal Forest Resources. The latter company, one of the Carolinas’ biggest landowners, was run by the Wall family for decades. Its sale came four years after the death of CEO Craig Wall Jr.
In 2007, AFM bought Sustainable Forestry Technologies Inc., which offered forestry services to private landowners and large timberland-investment organizations, from International Paper Co. Buoyed by acquisitions, AFM has grown from 40 employees in 2000 to more than 260 today, spread across 49 offices in 17 states. Turning land into money is the company’s specialty, says CEO Andy Ferguson, a 28-year forestry veteran who joined Canal in 1999.
The company advises clients on everything from the best crop to grow to the premium time to harvest trees.
The forest industry is the ultimate long-term business. It typically takes three to four decades to grow and harvest trees, depending on the type of tree and the conditions of the region.
Forestry is big in North Carolina, which has 18.1 million acres of timberland. In 2016, the state’s forestry sector had a total economic contribution of $32.7 billion supporting about 150,000 full- and part-time jobs paying on average about $50,000, according to a study from N.C. State University’s Forestry & Environmental Resources Department.
Although private-land ownership and family forests date to the 18th century, investment in timberland became more mainstream starting in the late 1980s, Ferguson says.
While the value of timber has increased over the years, the industry was hit hard by the 2007-09 recession when housing starts collapsed to the lowest levels in decades. Less demand caused wood prices to drop by nearly half from early 2006 to 2011, according to Dennis Hazel, an N.C. State forestry professor. Since then, prices have shot higher amid lots of volatility as housing demand ebbs and flows.
Many AFM clients are investment managers in big cities such as Atlanta and Boston, along with high net-worth individuals. The company’s bread and butter is its land-management services, including tree farming, inventory services and reforestation. Over the years, the company has diversified to include real-estate brokerage, timber sales, wildlife management and licensing to enable hunting.
“The trend has been for landowners to seek and try to achieve more from their properties that they own,” says Chief Operating Officer Jim Daniel, who joined the company in 2007 and has worked in the industry for more than 40 years. “The way we go about that is not always just timber. We look for other ways to strike the property, and it could be through wildlife, it can be conservation easements or it can be wetlands mitigation. … We’re always looking for ways to generate revenue for the landowner.”
Forestry jobs can be physically demanding, and AFM faces short-term challenges recruiting new employees because relatively few people in their 20s and 30s want to work in the industry, according to Ferguson. “Industrywide, we’ve had a problem with recruitment and retention of employees,” he says. “There are fewer individuals going into the profession, and we’re facing a lot of retirements in the next five to seven years. It’s become a challenge for us.”
To attract new workers, AFM is working with community colleges and trade schools that offer associate degrees related to forestry management and other technology training that tailors curriculum to meet industry needs.
Although Ferguson wouldn’t discuss the company’s financial details, he says AFM has grown at an annual rate of 14% in both revenue and acres under management since moving to Charlotte in 2001. AFM has expanded its presence globally in recent years, adding operations in Costa Rica and Panama that support U.S. investors with overseas holdings.
Ferguson says the company will continue expanding into other Central American countries where timberland is bountiful. But the business also has good potential for considerable domestic growth. “Look at the heritage of our country,” he says. “Private-land ownership is one of the fundamental foundations that came with the founding of our country. So that runs deep, and it runs very deep especially here in the South to own and manage land and pass it down to the legacies of the families.”