Loss of pruned logs to hit pruned mills hard

PROCESSORS THAT RELY ON PRUNED LOGS TO MAKE THEIR products will struggle to survive beyond the next decade, a leading forester believes.

Jeff Tombleson told the New Zealand Institute of Forestry annual conference in Rotorua last month that the trend for forest owners to quit pruning trees will provide major challenges for mills that source prunes to make a variety of clear wood products.

He carried out a survey recently to determine when the flashpoint would occur and his figures show that the first squeeze will come in less than three years, in 2020, and would be followed by a major reduction in supply by 2030 – just 13 years away.

Mr Tombleson, a log marketer, concentrated his study on the central North Island, where 12 mills are currently dependent on pruned logs for their business.

Those mills collectively consume around 1.226 million cubic metres of prune logs annually and employ 1,576 staff, and their total turnover is approximately $734 million annually.

They draw their supplies from four sources; the largest being Kaingaroa Timberlands (producing 400,000 tonnes pa, or 37% of the total), followed by medium-sized forest owners (300,000 tonnes pa, 26%), then small scale foresters (just over 260,000 tonnes pa, 22%) and Taumata Forests (180,000, 15%).

He asked the forest owners to project their supplies of pruned logs over the next 20 years, out to 2037 and the results were sobering.

By 2020, mills face a reduction of 10% in the prune log supplies, which would challenge some mills. By 2030, the squeeze really comes on with a 30% reduction in prunes (around 400,000 tonnes less than today), with Taumata finishing completely in 2024. Worse still, is that by 2037, the prune log supply will have plummeted 70%, by which time Kaingaroa Timberlands will have exhausted its prunes.

Mr Tombleson says: “The big concern for these pruned log mills is that there is little if any opportunity to move their businesses from pruned wood across to structural.

“Markets for structural timber on a world scale is very limited. It’s dominated by two large scale sawmills and we have a limited domestic demand. Australia is largely the only export market.”

He doesn’t see any opportunity for them to move across to remanufacturing timber from knotty logs because “the business case on that only stacks up with the supply of very cheap logs and customer demand is very low”.

The saviour for timber exports from New Zealand in the future, Mr Tombleson adds, will largely depend on a “mega demand” for knotty lumber.

He also notes that the success of our log exports in recent years and well into the future is dependent on the use of concrete forming in construction and we’d better hope concrete continues to be in demand.

NZL