Hon. Jim Sutton
Speech Notes 31 March 2004
Austimber seminar, Albury, Australia

Ladies and Gentlemen:It is great to be here, to join with you all in the NZ Pavilion at Austimber.

Wood is one of the oldest building materials known to humankind. But it is one of the most versatile, as well, and even today, people are coming up with new ways to use wood and new products. We just have to have a look around here at Austimber.

Austimber is the premium forestry event for the industry in both New Zealand and Australia. I am impressed with the prominence that New Zealand has at the show, with Guest Nation Status, and such an excellent turnout of New Zealand companies.

Austimber is more than just an Australasian show, and that many of you have customers and guests from all round the world. I welcome you all.

During the course of today, I have listened to the video playing here in the information area on the history of New Zealand forestry. It is a remarkable story both in terms of the scale of the plantings, and the home-grown technology that we have developed over the years. New Zealand has led the way in many areas, and especially in producing clear wood from pruned trees

But as we all know, the New Zealand forestry sector is currently suffering because of an emphasis on commodity exports. 65% of our forestry revenue comes from logs and sawn lumber. We face increasing competition from lower cost suppliers.

Against this backdrop we have growing volumes of timber coming on stream. Forestry is currently New Zealand's No 3 export earner, and the Government and the industry have set ambitious goals to take the sector to become our No 1 earner. We would like to see $ 3 billion in investment in wood processing in New Zealand by 2010.

But of course it is not just about volume.

If the New Zealand forest sector is to have a profitable future, then we need to be operating at the high value end of the spectrum. This means moving the industry into niche markets and getting much closer to the end consumer in the value chain.

In February I led a successful wood mission to India, China, and South Korea.

China has been a typical commodity market, with our logs and lumber going mainly to the furniture industry. But we found extensive opportunities for high value wood products
- especially in the construction sector. To capitalise on these opportunities, we will need to invest in a lot of smart production technology.

That is where you all come in.

Wood technology is a key component in the success of our industry. We need smarter ways to grow the right type of trees with the right qualities for future markets. We need world class harvesting technology. We need highly trained engineers and technicians. We need efficient timber drying and handling equipment. We need state of the art sawmilling and remanufacturing machinery. In short, we need a state of the art world class wood technology sector.

While walking around and meeting with you all over the last two days, the first thing that has impressed me is the quality and innovation that New Zealand does have to offer. I can't name you all but we do have state of the art technology in most of the areas I just mentioned:
- Forest Research is internationally recognised as a world class forestry research centre
- I have seen some amazing high tech scanning, measuring and optimising products
- In the wood harvesting area there are a number of companies here that really exemplify the ability of kiwis to produce state of the art engineering that is also simple, safe and cost effective
- We have world class wood drying technology along with the associated automation and energy related engineering
- The RADI centre is a new centre of forestry training excellence based in Rotorua
- And finally I have to mention the noisy cluster of New Zealand portable sawmill companies

I have been talking a lot about your role in the wider New Zealand Forestry sector. But of course you are all technology exporters in your own right. Some of you are just starting on that road, while many of you already export world
- wide, often in association with overseas partners. I know that many of your international partners are here.

It seems to me that what you have achieved here at Austimber is to present the wood technology expertise that New Zealand clearly has, under a banner that really can make some impact. New Zealand is a land of small businesses and you will achieve much more as a group than you can alone. The spirit of collaboration here is self evident, and I hope you can continue to develop this as a brand of New Zealand wood technology excellence in all your markets. This industry co-operation is necessary here
- in other more distant, more challenging markets, it will be even more vital.

Finally, I appreciate the kiwi heart and enthusiasm that you all have. I know that the last year has been a tough one for our domestic industry, and it is great to talk with such a dedicated group of exporters. You don't need me to tell you that as a nation we depend on exporting. I wish you all the best for the future, and I hope that you all write some great business over the next two days.

ENDS

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