Demise Of Forest Industry “Somewhat Exaggerated”

NZ Farm Forestry Association

Despite recent suggestions to the contrary, forestry in New Zealand has great prospects, says Ken Stephens, president of the NZ Farm Forestry Association.

“Several recent events do not seem to bode well, but suggestions of forestry’s imminent demise are somewhat exaggerated,” he says.

“One was economist Gareth Morgan's address to Property For Industry shareholders where, in his normal ebullient style, he roundly criticised New Zealand's ‘over-investment’ in forestry.

“A second was another rather lacklustre result from Carter Holt Harvey, and a third, the ongoing problems with the Kaiangaroa forest sale.”

What hasn’t been explained is that forestry is a complex collection of different, though inter-related, industries. Some have been doing very well over recent years and some have been struggling, says Mr Stephens.

“There is a widespread and false public perception that radiata pine logs are a relatively uniform commodity – simply feedstock for some ill-defined value-adding industry,” he says.

“Logs are as variable in value, quality and end use as the raw materials flowing from any other primary industry. Top grade, high value, pruned logs have as much in common with low grade, pulp logs as super fine Merino wool has with crossbred dags.”

Mr Stephens says there are two basic forestry philosophies operating in New Zealand. One philosophy aims to add value inside the forest gate. The other aims to produce cheap wood fibre and increase value during processing.

“The first plays to New Zealand's competitive advantage, requires far less processing investment, produces a more valuable product and continues to reward forest growers handsomely,” he explains.

“The second option has been more problematic.

“Surprising as it may seem, knot-free, kiln-dried clearwood sawn from pruned logs – the output from the first philosophy – is one of our most valuable forestry exports, yet comes from processing facilities with the lowest capital costs.”

Mr Stephens acknowledges there are challenges facing the forestry industry, including investment needs, wood quality issues, infra-structure, biosecurity and so on.

“But there are also great prospects for radiata pine and other plantation species we are growing. Not least is the inherent appeal of wood as a low energy, renewable, natural material - the atmosphere's natural guardian.”

[ends]

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