The wisdom of Solomon
IDON’T ENVY THE TASK OF WOODCO CHAIRMAN, BRIAN STANLEY, WHEN HE gives his keynote address on the future of New Zealand’s forest industry at this month’s ForestWood conference in Wellington. He’s going to be walking a tightrope of opinion that has seen tensions rising between forest owners on one the hand and wood processors and manufacturers on the other with regard to the tight supply of logs in some regions.
You see, Mr Stanley is not only Chairman of WoodCo, which represents all facets of the industry, from growing and harvesting trees to milling and processing, he is also Chairman of the Wood Processors & Manufacturing Association. So he has a foot in both camps.
Towards the end of last year, the situation almost reached boiling point as some mill owners vented their frustrations at watching shipments bypass their doors on their way to the wharves instead of being offered to local processors.
In spite of meetings between forest owners and millers, the issue continues to simmer under the surface, even though it has been recognised that the problem mostly lies with farmers, woodlot owners and independent exporters, not the corporates.
However, it’s going to take the wisdom of Solomon to extract a solution. Future wood supply is the single biggest issue facing our industry and it seems incongruous to be discussing it just as we are hitting the Wall of Wood, with harvests increasing year-on-year for the next decade.
The underlying problem is China’s insatiable appetite for our logs, which has seen trees harvested as young as 18 years of age – too young to be any use to sawmillers and wood processors in New Zealand, even though the Chinese still manage to make something from them. Many of those trees are coming from woodlots, not corporate forests, and the buyers are often based overseas and not part of the main forestry structure, so they’re hard to deal with.
But the problem goes even deeper.
For the past 10-to-15 years we haven’t been planting enough new forests to maintain increased supplies of wood for the future. Worse, there has been wholesale deforestation in key areas like the central North Island. So the resource has actually been shrinking, especially in areas where the wood has been very accessible to major mills and wood processors. And by the late 2020’s, when the Wall of Wood has gone, it will shrink further due to the lack of new planting.
In the wake of the last ForestWood conference, a report into the future growth of the industry and the direction of the much-vaunted Strategic Action Plan was commissioned to see if the goal of doubling forestry exports by 2022 was still on course. The conclusion made depressing reading. The 2022 target depended on more wood being processed in New Zealand, particularly in the pulp and paper sector. But without surety of future supply, few seem willing to make such huge investment calls. And who can blame them.
We’ve now got a government that is prepared to help us expand our future wood supply, but the results are at least 25-to-35 years away. Much can happen by then.
In the meantime, the two sides of our industry are going to have to learn to co-exist better and be more supportive of each other. They’ll need to. China may not always be the big market it is now.