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TIMBER MARKET OF NEW ZEALAND The forest growing and first stage processing industry currently provides regular employment for nearly 28,000 people. Since 1970, export earnings from forestry and forest products have increased from $66 million to over $2 billion - over 10 per cent of total export earnings. Global Status Historically, world consumption of wood has been increasing steadily in line with population growth. The United Nations food and Agricultural Organisation (FAO) forecasts that at current prices, world wood demand will continue to increase by more than 40 per cent from current levels to over 5000 million cubic metres annually by the year 2010. This is driven by a world population increase of 37 per cent and a 7 per cent increase per capita in wood consumption. At the same time as world demand for wood is increasing, supply is becoming increasingly restricted. Depletion of easily accessible old growth softwood and tropical hardwood forests and pressure for conservation is reducing future supply options. This diminishing yield is predicted to impact severely on traditional supply regions. New Zealand is potentially well placed to serve this market because the forest industry is based on sustainable planted forests rather than natural forests. New Zealand's planted production forest harvest will double over the next 15 years to 25 million cubic metres as a result of the 1970s and 1980s planting boom. The level of log harvest beyond this point is tied to the rate at which new planting continues. Current experience is that nearly all harvested areas are replanted. A further 50,000 hectares per annum of new forest establishment is seen as achievable and this would provide a total resource of six million hectares. The Ministry of Forestry predicts that new plantings will reach 60,000 hectares in 1993. The existing New Zealand processing industry consumes around 10 million cubic metres of roundwood annually with the remainder being exported in log form. As the harvest levels rise the investment opportunities for processing that harvest increase dramatically. From 2005 a further 15 million cubic metres of logs will be available for new processing facilities. There are several options for the export of the timber resources coming on stream. New Zealand has a competitive edge with the quantity of high quality logs produced compared to other countries. New Zealand forests are well suited to producing structural and building timber. Remanufacturing is also an area of potential growth provided the industry can attract sufficient investment. Australia is New Zealand's largest single market, generating one third of export earnings and predominantly through sawn timber and newsprint. In the year to March 1993 Australia bought $685 million worth of forestry products; Japan $531 million; Korea, $219 million and Taiwan $121 million. Of total forest exports, logs and poles contribute 25 per cent by value, while wood pulp, paper and paperboard, and sawn timber and railway sleepers each contribute around 18 per cent. The major markets for logs and poles are Japan and Korea, with China and to a lesser extent Taiwan also significant. The international market for logs is strong as many countries want raw materials for their own paper and timber industries. We exported 4.5 million cubic metres of logs in the year ended March 1993. Australia is the largest customer for New Zealand exports of Sawn timber sawn timber where it is mainly used in the construction industry. Significant quantities are also exported to Japan and to a range of Asian countries for packaging and temporary construction. More recently markets have been developed in the United Kingdom for framing, and the United States for clearwood for further processing, replacing their domestic pines. Sawn timber exports in the year ended March 1993 totalled 949,000 cubic metres. Remanufactured Products New Zealand exporters have expanded rapidly into the remanufacturing of semi-finished high value solid wood components for North America, Europe, and North Asia. Each year, New Zealand's furniture industry exports around $30 million worth of wooden furniture and furniture parts to many different countries. Some of the wood used is from natural forests. Panel Products New Zealand is a relatively small plywood and veneer producer, with most of the product sold within New Zealand and in Australia. Total annual product ion is about 65,000 cubic. 34 metres, although this rose to over 85,000 cubic metres in the year ended March 1993. Small volumes of veneer for plywood manufacture are sold to Asia and Japan. Overseas markets favour radiata pine fibre in the manufacture of medium density fibreboard (MDF) because of its light colour, and the export demand in Asia is increasing. MDF markets are growing as they continue to replace thin plywood and particleboard. A major area of expansion is with furniture manufacture. We exported more than $37 million worth of furniture in the year ended 31 March 1993. Particleboard exports have also improved in recent years and currently total 76,000 cubic metres. The major markets are in Asia. Laminated veneer lumber (LVL) is finding increasing interest in the United States and Japan. Pulp and Paper New Zealand's pulp and paper sector is closely linked to the rapidly expanding markets of Pacific/Asia. Presently major pulp markets are Japan, Australia, Taiwan, and Indonesia. Export markets for paper are dominated by Australia (60 per cent) with Hong Kong, Malaysia and Singapore otherwise significant. Exports of pulp have averaged 600,000 tonnes per annum in recent years, while annual paper (and paperboard) exports have been around 330,000 tonnes. Off Shore Investments Key to Continued Expansion The forests maturing from the 1970s and 1980s planting boom mean that New Zealand is an extremely attractive proposition for new investors. The forestry industry in New Zealand is under capitalised. To process the new wood coming on stream into sawn timber, panel products and wood pulp could require as much as $3.5 billion of investment over the next 15 years. The opportunities for further processing or "adding value" are extensive. Additional investment of $120 million into reprocessing facilities could generate $1100 million in export earnings. Future expansion and making the most of our resource depends on high levels of new investment. |
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A Geographical
Insight into New Zealand |
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