Forestry Finds Marketing Strength In Numbers

12 November 2004

Forestry Finds Marketing Strength In Numbers

A significant cross section of the New Zealand wood products industry has committed to working together to make inroads into the crucial China market.

"We're talking about a country of four million people trying to make an impact on a country of 1.27 billion," said Carter Holt Harvey Chief Operating Officer Devon McLean. "When you think of it in those terms, pooling resources starts to look like a very good option." The commitment is the result of the China Wood 2004 conference held in Rotorua over 11 and 12 November 2004. Around 20 companies will work together to set up collaborative market development strategies in three market segments in China - construction, fit out and furniture manufacture.

“It’s about co-operating to compete,” said Forest Industries Council Chief Executive Stephen Jacobi.

“We’ve acknowledged there are some collective promotion and development initiatives we can take to grow exports for everyone, especially in educating the market in the advantages of New Zealand Radiata pine, as distinct from Russian pine, or pine from elsewhere in the world,” said Matthew Hitchings of Blue Mountain Lumber.

“This is very positive. It’s too early to say what kind of resource commitment the industry will make to this, but we definitely want to be involved.” Over 80 representatives from across the forest industry and government agencies attended the conference, a joint initiative of the New Zealand Forest Industries Council and New Zealand Trade and Enterprise.

Opening the conference, Forestry Minister Jim Sutton challenged the industry to find innovative ways to develop new markets. As an example, he referred to a proposal under consideration by New Zealand Trade and Enterprise to establish a New Zealand Wood and Building Products Centre in Shanghai.

Keynote speaker Matthew Brady, until recently General Manager of the American Forest & Paper Association Beijing office, told conference participants they faced stiff competition in China from the rest of the world, but China’s dependence on imported wood and wood products would continue to grow.

Sao Paolo based Trade Commissioner Simon Adamson drew attention to Chile’s expanding exports to China and to the strong prospect that, like New Zealand, Chile might soon initiate the negotiation of a free trade agreement with China.

Conference chair Stuart McKinlay, Senior Advisor to Pan Pac Forest Products, said China Wood had achieved its goal in developing industry unity around key opportunities in China.

“I think everyone present will have gone away with a strong sense of the scale of the opportunity, and also of the scale of the competition. I think we are all very clear on the need to cooperate if we are to succeed in China.”

The working groups established at the conference will aim to meet again before the end of the year to make further progress on developing the industry strategy.

China will need an estimated 260 – 280 million cubic metres of wood over the next six years, but its domestic industry can only supply only about half its needs. The country has become the world’s second largest importer of logs, and now has a zero-tariff rate on log and plank imports.

In addition, a large market exists for value-added wood products such as doors, windows, and flooring. Beijing alone needs 200,000 housing unit to be built each year between 2004 and 2010. China also has 300,000 hotel rooms which are set for upgrading, at a total spend of NZ$1.8 billion.

ENDS

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