West Coast Forest Industry and Wood Availability Forecast - June 2008
8 Opportunities and Constraints
Opportunities
Favourable characteristics of West Coast radiata pine
Although radiata pine grown on the West Coast produces wood of low density, it also has long internodal lengths, light colouration and high sheen. As a result, pruned logs are suited to long-length clear and select grades and mouldings. Unpruned logs can produce high quality cuttings grade lumber suitable for window and furniture components, finger-jointed products and finished goods. The light colouration and high sheen are favoured characteristics for furniture manufacturing.
The cypress resource
There will be an opportunity to develop a modest special-purpose timber-based industry as the cypress resource matures, starting in about ten years, but more particularly from the late 2020s as the bulk of the resource reaches harvesting age. Well grown cypresses produce high quality timber with even texture and lustre which is often compared to kauri (Miller JT; Knowles FB (1990) Introduced Forest Trees in New Zealand: Recognition, Role, and Seed Source – 9. The Cypresses, Ministry of Forestry, Forest Research Institute, Rotorua.)
Constraints
General constraints
There are a number of factors that are and have been constraining the development of the forest industries across New Zealand. The most prominent include: provisions of district and regional plans prepared under the Resource Management Act 1991 (these are not generally a constraint on the West Coast); uncertainty associated with climate change policy development; compliance costs; skills shortages; distances from markets; shipping costs; the strength of the New Zealand dollar; the fragmentation of the industries; increased competition from low cost producers; non-tariff barriers; and the pressure from wood substitutes.
Particular constraints for the West Coast are described below.
Decrease in local log supply over the next ten years
The radiata pine wood availability forecast for the next ten years suggests there will be about a 15 percent decrease in local sawlog supply by 2010. This will put additional pressure on the existing wood processing industry on the West Coast, assuming they wish to at least retain their current levels of production. There is no potential for any investment in additional wood processing capacity unless logs are sourced from other regions, or existing processors constantly operate well below capacity or exit the industry.
Resource gap
There is a four-year period when little radiata pine was established on the West Coast (see Figure 4.1). This will potentially affect wood availability around the period 2016 and 2019 unless the industry carefully manages this, to ensure a sustainable level of harvest.
Distance to major markets and export ports
With a regional population of only 30 500 there is not a large market for wood-based products on the West Coast. This means products must be transported to, and sold on, other home markets or exported. Christchurch and Nelson, the closest cities and locations of export ports, are considerable distances from most West Coast wood processing businesses resulting in significant transport costs.
Lack of local market for chip logs
Between 10 and 20 percent of the harvested volume from a radiata pine forest will usually be chip logs, but there is no significant market on the West Coast for this log type. Some chip logs are trucked to MDF plants in Nelson or Canterbury, but the distances are considerable and this is sometimes dependent on sawlogs being back-loaded to the West Coast.
Low growth rates
Most of the older plantation forest resource is located on low productivity sites where the recoverable volumes at harvesting are often between 220 and 280 cubic metres per hectare. The average total recoverable volume for clearfell radiata pine in New Zealand in 2005/06 was 486 cubic metres per hectare (NEFD as at 1 April 2006, MAF 2007). The low growth rates on these sites constrain the economics of forest management.
Concluding comment
The outlook for the development of the West Coast forest industry has changed dramatically over the last couple of years. The previously forecast significant expansion in available wood from the region’s plantation forests has been re-assessed to indicate a 15 percent decrease until 2015 compared with the estimated harvest for 2007. The region also faces a number of other constraints that require considered management to sustain the industry.
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