The NZ timber industry has taken the government’s goal of doubling exports within a decade to heart, with its own action plan to increase exports from $5.7 billion a year to over $11 billion by growing the value-added products sector.
That is according to Mark Ross, the CEO of the Wood Manufacturers and Processors Association (WMPA), who will discuss the plan at the WPMA conference next month, and said that in an industry where almost two-thirds of its production is sold as unprocessed logs, it must move more aggressively and quickly to drive more value into processed products.
“The log trade return is really always going to be a lower value and pretty flat. The only way we can grow is through increased value, processed here in NZ.”
The action plan has identified that adding $5.75bn in added value exports from the sector will require a quadrupling of current processing capacity. But it also notes that the wood to be sold as value-added in 2034 is halfway through its growth cycle. It notes that timber is likely to be of smaller quantity than present, of lesser quality, and harvested at a greater distance from port and processors.
Ross pointed to distinct premiums opening in European and United States markets for NZ’s value-added timber sector to capitalise on in the coming years: “We have China generating about $370 per cubic metre for sawn Pinus radiata, compared to $2227 a cubic metre in the United States and $1187 in the Netherlands, all for the same grade timber. Asian markets are not necessarily the strongest, but are still where a lot of our product is going.”
A key area the industry wants to work on with the government is boosting the knowledge and presence of forest product trade experts in overseas posts, helping link processors with potential customers seeking high-value niche timber products.
“And we need to work better as an industry across all the supply chain to better understand those markets and tell the NZ story more clearly.”
He acknowledged the sector’s tendency to work through markets on a company-by-company basis, rather than collectively. This was something the plan aims to change. The plan comes at a time when there have been several mill closures in recent months. However, Ross is optimistic about what he sees at mills that are still operating nationally.
“We are seeing a lot of re-investment still going ahead in mills, a million spent here, a million there. We are seeing new kilns being installed, mills adopting AI tech for more productive throughput. A number also have additional capacity to ramp up production if they work to growing their value-added output.”
He said the recent announcement of a collaborative project between Taranaki Pine and Techlam in Levin was a positive sign of how companies can advance their respective strengths to take on high value overseas market opportunities. The action plan is set for a formal launch at Wood Processors and Manufacturers conference in early October.
