Lets be more selective about foreign investment forestry
Lets be more selective about foreign investment into the NZ forest sector
As the Government considers various foreign investor applications in the forest and wood processing sectors what should it be looking for? More than anything it should be looking for the opportunity to bring improved management into the industry and joint ventures with local parties.
It is no secret that the forestry industry has not performed as well as it could have and that New Zealand has not benefited as well as it should have. Compared to other economic activity over the past decade the forestry sector has declined. It has declined from 0.7 percent of GDP in 1995 to 0.6 percent of GDP in 2017. This decline has been in the face of all the right fundamentals.
The Wood Council has estimated that the returns from processing a cubic metre of wood on-shore are in the regions of six times the returns from exporting it in raw log form. This opportunity has not been taken advantage of and won’t until we are more selective about the sort of foreign investment we let in.