More Information

The case for new investment in wood processing in New Zealand

Authors: David Evison
Publication: New Zealand Journal of Forestry, Volume N.Z.J.For. 2016, Issue N.Z.J.For. 61(1) 2016, pp 4-10, May 2016
Publisher: New Zealand Institute of Forestry

Abstract: Recent strategic analyses and statements have highlighted that the New Zealand forestry sector can increase its contribution to the economy significantly through additional wood processing. A number of industrial processes have been found to be sufficiently profitable to encourage investor interest. This paper demonstrates that, as an example, the market prospects for Kraft pulp appear to be promising, but a new world-scale pulp mill would exceed the scale of our forests in most regions except the Central North Island. Other promising residue and solid wood processing options need to be evaluated for their suitability in these regions. The log export market provides an efficient way of selling the proportion of harvest that is excess to domestic requirements, with minimal capital investment. However without significant increases in prices, this option is unlikely to stimulate the expansion of the forest resource, and because we are close to the sustained yield, there is little opportunity to increase harvest. Our current export product mix provides limited opportunity for increased economic contribution from the forestry sector in the future. It is suggested that for the sector to reach its full economic potential we need: • A shared view of the processes and products that are most likely to lead to a major increase in the contribution of the sector to export receipts • A shared view of the significant barriers to achieving the strategy as articulated, and an action plan to remove or mitigate these barriers • Engagement by the sector with government to provide support for implementation. The formulation of, and agreement on, an action plan by sector participants is a necessary precursor to engagement with government and other enabling partners.