The New Zealand Forestry Industry
Forest Production in New Zealand
Forestry plays an increasingly important role in New Zealand's economy. New Zealand's forest resource can be divided into two distinct types. The first is large areas of natural forest made up of species indigenous (and often endemic) to New Zealand and including both virgin and regenerating forest. The second type is a smaller, but still extensive, area of forest that has been planted with mainly non-native, coniferous species.
New Zealand's 6.4 million hectares of indigenous forest (24 percent of the total land area) is located mainly in the mountains and hill country, and on the West Coast of the South Island. The major indigenous tree species in these complex forests are beech, kauri, rimu, taraire and tawa. Public opinion favours the preservation of our indigenous forests, and approximately 77 percent of New Zealand's indigenous forest is in national parks and reserves, covering 18.2 percent of the total land area. New Zealand's national parks are a major tourist attraction, offering a wide range of walking tracks and other activities, and containing many unique wildlife species.
Land Use in New Zealand
The New Zealand forest industry is almost entirely based on planted forests, which cover 1.8 million hectares, or 6.6 percent of New Zealand's land area. New Zealand has had planted production forests, of mainly coniferous softwood species, since the early 20th century. Approximately 90 percent of this forest area is planted with radiata pine. This species grows quickly under New Zealand conditions, and the average time from planting to harvest is around 28 years. Much of the planted forest area is young, with 59 percent being 15 years old or younger, so production will increase substantially over the next ten years. Sixty-seven percent of the planted forest has been pruned to produce high quality timber.
In the year ended 30 June 2002 the forest industry:
- harvested 21.6 million cubic metres of logs from New Zealand's forests;
- exported the roundwood equivalent (from logs and residues) of 15.6 million cubic metres, in raw and processed form, earning $2.5 billion and ranking forestry third in terms of merchandise exports;
- exported to over 40 countries;
- employed over 25 000 people;
- accounted for approximately 3.9 percent of GDP.
The biggest concentrations of plantation forests are in the central North Island on the volcanic plateau and the Bay of Plenty. Other major growing areas are Northland, Hawkes Bay, East Cape, Nelson, Marlborough, Otago and Southland. Most of the trees are within a few large forests, but there are also many small holdings. Most of New Zealand's plantation forests are owned by private companies. The government now owns only 6 percent of plantation forests through Timberlands West Coast and Crown Forests, which manages forests planted on Maori leasehold land. Smaller private owners hold nearly 30 percent of total planted forest.
Until the 1980s the government was directly involved in forestry production through ownership of over half the country's exotic forests plus two large sawmills, administration of forestry encouragement loans, and regulation of activities such as log exports. Thus government could use forest policy to meet objectives such as provision of employment. In 1987 the Government decided to sell its planted forests (but not the land) to private companies. The Government's current policy is to ensure that New Zealand forestry is internationally competitive and not dependent on subsidies.
Land Use in New Zealand
Source: Land Cover Database 1.1
Research is particularly important to New Zealand's forest industry. The New Zealand Forest Research Institute Ltd (trading as Forest Research) based in Rotorua is internationally renowned. Scientists work with the forestry sector to continually improve the genetic quality of radiata pine through tree breeding, to develop better forest management techniques, and to expand value-adding wood processing. Forest Research scientists are developing processes, for example, to harden wood, change its colour and increase its strength. New timber treatment techniques are expected to increase the profitability of processing industries.
New Zealand's wood processing industry comprises four pulp companies and two paper companies, eight panelboard companies, around 362 sawmillers and 50 re-manufacturers. New Zealand's wood processing plants use 14 million cubic metres of wood annually, with the balance of 7.6 million cubic metres being exported. Wood products made from 6 million cubic metres of the harvested logs were used domestically with the balance being exported. The major wood processors, who are also New Zealand's major forest owners, have their processing plants close to or within their forests. The wood processing industry is concentrated in the central North Island, where most mature planted forest plantations are located.
By 2010 there will be another 10 million cubic metres of wood available annually for industry to further process, or export in log form. If all this extra production were to be processed in New Zealand, up to $5 billion would need to be invested in new wood processing facilities. Another 17 large to medium-sized sawmills, 29 re-manufacturing plants, three panelboard mills and three pulp and paper mills would be needed. Wood processors have publicly announced their intention to invest $2.2 billion in upgrading existing wood processing facilities and creating new ones.
World Forestry Production
In global terms New Zealand is a relatively small player, accounting for only 1 percent of the world's total supply of wood for industrial purposes. 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 increase by more than 40 percent by the year 2010.
At the same time as world demand for wood is increasing, supply is becoming increasingly restricted. Easily accessible old-growth softwood and tropical hardwood forests are being depleted, and pressure for conservation is increasing. These factors are limiting the availability of wood from traditional supply regions. New Zealand is well placed to serve the growing market, as the forest industry is based on a sustainably planted, renewable forest resource rather than the harvesting of natural forests.
Australia is New Zealand's largest single market, generating 26 percent of forestry export earnings, predominantly from sawn timber and newsprint. Of total forest exports, logs contribute 21 percent by value, wood pulp 14 percent, paper and paperboard 15 percent, and sawn timber 23 percent. In the year ended 30 June 2002, 5.8m cubic metres of logs were exported with a total value of $758 million. The major markets for logs are Japan and Korea, but China, India, and to a lesser extent Taiwan, are also significant. The international market for logs is strong, as many countries require raw materials for their own paper and timber industries.
Export Markets for Forestry Products
Year ended 30 June 2002
Source: Ministry of Agriculture and Forestry
Log Flow in the New Zealand Forestry Industry
Volumes in millions m3 roundwood equivalent. Year ended 31 March 2001.
Source: Ministry of Agriculture and Forestry
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