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Ririnui: Address to NZ Institute of Forestry

212 June 2005

Mita Ririnui - Address to NZ Institute of Forestry Annual Conference

Associate forestry Minister addresses a major conference of forestry stakeholders

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I want to first congratulate the New Zealand Institute of Forestry for choosing Northland to hold it's annual conference and thank them for this opportunity to represent Government. Forestry in Northland can look back with pride and forward with confidence. From the first days of Maori living and working in the Kauri forests of Northland, through to the more exploitive era of kauri logging and on to the present day, forestry has been, and still is, a very important part of Northland's economic and cultural well-being.

It is fair to say that the art of plantation forestry, the hub of the present industry in the North, has not been without challenges.

Biosecurity One of those challenges is biosecurity. With New Zealand's international gateway of Auckland located at the southern end of the region, Northland is faced with the ever-present dangers of disease and pest incursions. The Government takes very seriously any threat to our biosecurity, for good reason. Roughly 2/3rds of the goods New Zealand exports are derived from our primary industries. Pests and diseases, such as foot and mouth, pose a huge risk to our economy.

To ensure that we can have confidence in our capacity to respond to incursions of new pests and diseases, we routinely run simulations to test and further develop our systems, processes and general readiness.

One of the inevitable casualties of the recent response to the foot and mouth scare on Waiheke Island, is the planned exercise to test our capacity to respond to a forest disease, pine pitch canker, has had to be deferred. The Ministry of Agriculture and Forestry (MAF) will pick this up again as soon as possible - our forests are too important a resource to leave them vulnerable to a disease of this sort.

Not that we have not had plenty of practice of late in dealing with forestry pests. Over recent years we have had to respond to incursions of Painted Apple Moth, Asian Gypsy Moth and Fall Web Worm, all potentially damaging to our indigenous and plantation forests.

Face up to Change When Ministers speak with the leaders of our primary industries, they mostly find enormous optimism and ambitious plans for future growth and innovation based on good science, continued rapid productivity gains, new investments and new approaches to marketing.

We have observed a striking turn around in our dairy and meat industries over the past decade - a result of the fundamental repositioning of these industries with respect to productivity, profitability, positioning in international markets and investor confidence. This is leading to bold ambitions with respect to future investments.

At this stage, it is probably fair to say that the New Zealand forestry sector is at the tail end of that path of optimism, and is having some difficulty in seeing a profitable and high productivity path forward. It needs to overcome that. Forestry is a very important industry for New Zealand. It has the potential to become even more important economically and socially as we move through this decade. The government is very interested in seeing this important industry reach its true potential.

We all know that the forest industry has been going through challenging market conditions over the past two and half years, with the high exchange rate, increasing freight costs, and higher electricity and insurance charges. But it is important to keep a longer-term perspective.

Working together The government and key leaders in the forest industry have agreed to accelerate their work together under a new relationship to promote the development of the forest industry. The Forest Industry Development Agenda (generally known now as the FIDA) is a new relationship between the forest and wood processing industry and the Government. It provides a means for the Government and the industry to develop a strategic approach for the industry's future growth.

It will see the Government invest $18.1 million to develop the industry, with a further $3.8 million contribution expected from industry. Areas to be funded are market access; market development; bio-energy; skills and training; and wood design. The market access and market development funding is dependent on securing industry co-funding of approximately 25 percent.

Will industry co-funding be secured and where will it come from? This remains to be worked out. It could come from the whole industry, from companies or groups of companies. It will be up to the industry to secure the funding if it wishes to access the Government contribution towards market access and market development. A Steering Group, largely comprising forest industry participants with limited Government representation, oversees, directs and champions the FIDA process.

The high level objective is to ensure the forest industry can make its optimal contribution to New Zealand's sustainable development.

A strategic pathway Movement towards achieving that objective needs some serious strategic spadework. The FIDA Steering Group wishes to identify and receive advice on the strategic issues that will affect the profitable commercial development of the New Zealand forest sector and the possible responses to these issues.

This would be a key initial step in preparing a development strategy for the New Zealand forest industry. In this context, the Steering Group has an outlook of some 10 - 15 years.

Groups and individuals in the forest industry have already done a significant amount of strategic analysis and much of this work is probably still valid. To help inform the development of a strategy, the FIDA Steering Group has asked industry players to make available as much of this analysis as possible.

The Ministry of Agriculture and Forestry (MAF), on behalf of the Steering Group, has engaged the services of a consultant to review all the information provided by industry players and incorporate it into a discussion document for the consideration of the Steering Group, and probably the wider forest industry.

At its broadest level, an industry development should help inform the decisions of all stakeholders in the New Zealand forest industry.

A strategy can only succeed if it improves that overall quality of decision-making amongst industry players, government and stakeholders. To do this it must provide robust information and analysis upon which better-informed decisions can be made. The strategy is not intended to provide a business plan for the forest industry or a blueprint for "flying in formation".

It must recognise that individual firms will and should have their own strategies and approaches to their business.

Promoting the use of wood Wood from well-managed forests is a truly sustainable material. It requires low energy to process compared to most alternative materials. Even where energy is required, the wood itself provides much of the energy by providing bio-fuels. Using wood from sustainably managed forests actually helps reduce global warming by removing carbon dioxide from the atmosphere.

In construction, wood's sustainability, low energy requirements and greenhouse gas advantages make it an ideal material. Interestingly, wood is probably cheaper than alternatives of concrete and steel for buildings up to 6 stories high. Yet wood is used in very few of the commercial buildings in New Zealand where it would be suitable and probably cheaper.

For a country well experienced in using wood for building houses there is a very shallow pool of talent in New Zealand for designing non-residential buildings using wood.

To help address this apparent market failure, the Minister of Forestry announced in March 2005 an investment of $2 million (GST excl) over the next five financial years to help promote excellence in wood design in the construction sector.

This initiative, is part of the FIDA process, it will support two timber design positions at New Zealand engineering schools. It will help ensure there are a good number of future engineering graduates skilled in designing commercial buildings using wood.

In turn this will help promote the wider use of wood, both domestically and in export markets, through the development and export of wood-based building solutions. But the New Zealand forest industry cannot just sit on its hands waiting for this to happen.

A partnership between Government funding to promote excellence in wood design on the one hand, and industry promotion of its products on the other, will go a long way towards improving the investment attractiveness of the forest industry. As Northland's pine forests produce some of the best construction timber in New Zealand this should be of particular interest to Northland foresters.

Looking to the Future Globally, forest products have a bright long-term future. Forestry, especially commercial well-managed forests, will benefit from many of long-term trends and environmental pressures facing the world.

China is a huge market and the building boom there is staggering in its pace and size. There is an enormous opportunity for increasing New Zealand lumber exports to meet just a fraction of the demand in China.

To help promote the use of New Zealand pine in China, New Zealand Trade and Enterprise has recently facilitated a joint-venture New Zealand Wood & Building Products Centre in Shanghai, staffed by local people. This will help raise the profile and image of radiata pine and provide a local 'face' to the New Zealand companies participating in the Centre.

Other trends Another trend that will benefit New Zealand's commercial forest industry is global moves toward sustainable forest management. Progress can seem glacially slow at times, especially given the enormity of problems like illegal logging. However, the trend is in one direction, toward sustainability and this means reduced volumes of timber resulting from wholesale forest destruction.

One of the hottest topics on the international policy agenda at present is illegal timber. The Government, led by MAF, is developing a comprehensive policy on illegal logging and trade in illegal timber. Be assured that the Institute of Forestry will be consulted as part of this process.

Another trend is toward integrated sustainable land management. Issues like soil and water management, mitigating adverse climatic events, biodiversity, nitrification, greenhouse gas management, and even aesthetics are becoming increasing important for land managers to think about.

Forestry can play an important positive role in all these areas. Foresters fully appreciate these other benefits provided by forestry

Summary I just want to summarise by touching on how Maori can contribute by playing a proactive role in growing the industry.

At this point it is estimated that Maori hold 10 percent of the forestry asset base in the country. I have no doubt the this will increase exponentially once the central plateau claims process is completed.

Given the substantial asset base that Maori organisations currently have, the opportunity for growth is absolutely huge. Therefore I want to remind everyone here to day that Maori interest in forestry will expand. It is up to the industry and Maori to get together and move forward.

Maori are beginning to take control of their asset base and I believe developing strategic partnerships with the forestry industry will be beneficial all around.

Thank you for inviting me here this evening, it's been a pleasure.

ENDS

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