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The O'Brien Column: Infrastructure hitch but foresters still happy

Friday 22nd September 2000

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A leading forest company executive says people's views on the surge in wood supplies can be divided into the pessimists and the optimists.

Evergreen Forests chief executive Mark Bogle says the pessimists see a wall of wood and the optimists see a wave of opportunities.

He was commenting on the relationship between wood supplies in the next few years, the ability of the country's infrastructure to cope with the industry's demands and the availability of export markets (NBR, Sept 15).

Problems with infrastructure, such as roads and general regional development, reflected poorly on the nation's planners over the past 20 years. It did not require special insight to know there would be a substantial increase in wood supplies from 2000 and beyond.

Confirmation of the point can be seen in Evergreen Forests' latest annual report.

The company said it was traditional for its annual reports to include in-depth discussions on topics related to advantages of wood as a material and plantation forestry as a resource.

This year the company looked at the role of plantation forestry in the environment.

Evergreen included a graph showing the amount of new land planted in production forest from 1920, a year after the establishment of the then State Forest Service, to 1999.

The graph showed about 50,000 hectares of new forest were planted in 1975.

Evergreen's report said annual new plantings in the late 1970s and early 1980s were more than in the years of the Depression of the 1930s, when they peaked at just under 40,000ha. That level was not reached again until the early 1970s.

There was a decline from 1985 to 1990 as a result of changes to the taxation regime.

Removal of the tax problem in 1990 saw an immediate increase in new plantings, which came close to 100,000ha by 1995, before dropping off during the Asian economic crisis.

The annual new plantings were still more than 50,000ha up to last year.

The figures have not been presented suddenly. They have been known each since records started and local, regional and national authorities should have seen the implications years ago.

Perhaps they did but deferred doing anything about them for the obvious political reason that spending money now (or then) on infrastructure such as roads that would not reach peak usage until several years into the future can lead to public resistance.

The transport issue is surmountable. Mr Bogle suggested there would probably be an increase in the amount of wood shifted by rail in future to take it to processing plants and/or ports.

He also said infrastructure was a small proportion of the total investment in the forest industry.

New Zealand has an advantage when forestry is considered from an environmental viewpoint.

The industry is based on plantation forestry, rather than logging indigenous timber as in many other countries where environmental pressure is restricting felling.

Evergreen Forests' report noted more than 90% of New Zealand's plantation estate was in radiata pine.

"Because these 'forest farms' now provide much of this country's needs, there is little pressure to harvest indigenous trees.

In the words of forestry expert Dr Wink Sutton - a recognised authority on global plantations - 'plantation forestry is saving and enhancing New Zealand's indigenous biodiversity."

The company said the export trade also helped relieve pressure on indigenous forests in other countries.

"That New Zealand is able to supply 1.1% of the world wood products trade (and 8.8% of Asia-Pacific wood products trade) from just 0.2% of the world's forestry area highlights not only this country's fertile climate, but the efficiencies inherent in sustainably managed forest farms."

The future seems good for the industry, and for the listed forestry companies, irrespective of perceived potential problems with infrastructure.

Mr Bogle said forest products would be the country's No 1 export earner in five years, heading off dairying.

That may or may not happen but the comment indicated the growth available in forestry and wood-based products, the latter offering good opportunities on a value-added basis.

There could be the odd lurch along the way, such as the Asian economic crisis of recent years but the long-term outlook seems bright.

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