forest talk
Significant drop in log exports predicted LOG EXPORTS, WILL PEAK AND THEN DROP by more than a third within a decade, says investment house Forsyth Barr in its latest industry report. “Export volumes will peak by 2026 then decline as insufficient planting activity after the 1990s boom means total harvest volumes will fall,” says report author and head of research, Andy Bowley. “The use of wood domestically is undergoing a transformation through the use of trees to sequester carbon, power boilers and as a low carbon building material alternative.” The medium-term outlook is driven by small forestry owners, who will influence export log volumes depending on demand and supply chain constraints, he explains. Industry dynamics are changing along with the government’s plan to shift the industry towards more domestic processing and higher value processed products. A further shift to net-zero emissions will further impact the industry as moves to biofuels and carbon sequestering may spur more planting and higher prices, but not for the export trade as it currently operates, says Mr Bowley. “Over the medium term this could be detrimental to export volumes but over the longer term could be very beneficial,” he adds.
Forest Owners Association Chief Executive, Phil Taylor, agrees that small forest owners will remain influential in the near term but that could change depending on market conditions. “Back in the 1990s, it was the small forest owners who largely developed or established new forests on the back of very strong markets at that time, so they currently represent quite a significant component of the harvest volumes coming out of New Zealand. “Typically, the small forest owners have one opportunity in say, 28- to 30 years, to
optimise the return on their investment so they are very sensitive to what’s happening out in the market, and they have the ability to either harvest or stop harvesting at very short notice.” He adds that large owners can weather out market downturns but bigger challenges to the sector loom on the horizon with ambitions to encourage more local processing. “We may actually see a high proportion of the logs that are currently exported processed domestically, and then exported as a higher value product.” NZL
Sawn timber key for construction NEW ZEALAND FACES CHALLENGES IN meeting demands for key construction materials for infrastructure, with a risk of delays to major projects, says The New Zealand Infrastructure Commission, Te Waihanga, These findings are among those detailed in Te Waihanga’s Infrastructure Resources Study, which looks at four key materials: timber, aggregates such as gravel and stone, cement/concrete, and steel. Te Waihanga Chief Executive, Ross Copland, says New Zealand is blessed with an abundance of natural resources but over time various constraints have emerged which are limiting the supply of these resources, creating cost pressures, environmental challenges, and access issues for important
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infrastructure projects. “New Zealand has a wealth of physical resources at its fingertips, but this study highlights the need to better manage them to ensure they are available for our critical infrastructure projects. Without ready access when they’re needed, we risk creating an unnecessary handbrake for the construction sector.” Mr Copland says sustainably produced timber is a material with attributes that mean it will be in high demand for years to come. “Recent advances in engineering and the need to reduce carbon emissions is leading to a wider range of uses for timber including in multi-storey construction, but there are obvious land-use implications to large-scale production forestry which need
to be balanced as well,” he says. “This study finds that work needs to be done to both improve the domestic supply of sawn timber and look at the opportunities and risks of importing it. Research is also needed on how to best value the carbon benefits of timber as a construction material. “Based on this study, Te Waihanga has included recommendations for ensuring a secure supply of these materials in our recently released draft New Zealand Infrastructure Strategy, which we are currently working to finalise,” Mr Copland says. NZL