A few simple facts highlight the importance of New Zealand’s forest industry, and its potential as an investment:
- Forestry is New Zealand’s third largest industry, behind dairy and meat products.
- Total exports exceed NZ$3 billion annually.
- Currently only 5% of global timber supply comes from sustainably managed, plantation forests.
- Timber from non-sustainable native forests is becoming increasingly scarce. Long term plantation forestry will have to provide the bulk of global timber supply.
- Demand for wood is proportional to population and standards of living. As both of these increase demand for wood will increase accordingly.
- 90% of New Zealand’s 1.7 million hectares of sustainably managed, renewable plantation forest is planted in Radiata, or New Zealand pine.
- New Zealand has over one hundred years experience growing New Zealand pine.
- Selective breeding has improved the quality and manageability of New Zealand pine.
- The industry infrastructure, including transport, silviculture, harvesting, processing and research facilities, is very well developed.
- New Zealand is one of only a few industries in which New Zealand has a unique competitive advantage; we grow softwood trees quicker and more efficiently than every other country in the world.
Major Export Markets
New Zealand is particularly well located to be able to supply the Asian Pacific region, where demand for timber is increasing at a great rate. New Zealand’s main markets for its forest products are Japan, Australia, USA, Korea, and other SE Asian countries. India and China are both significant emerging markets with the potential to become very big importers of New Zealand forest products.
Wood Availability Forecast
New Zealand currently provides less than 2% of the global timber supply. However New Zealand has the opportunity to dramatically increase this over the next few decades. Annual harvest production is expected to increase from 16 million cubic metres to over 50 million cubic metres by 2025. There is still tremendous potential for expansion of processing to handle the increased volume of timber that will be harvested over the next few decades.
An increasing proportion of New Zealand pine is being pruned in order to produce higher value clearwood timber from the butts of pruned trees.
Clearwood timber from pruned butts currently sells for NZ$180 per cubic metre, compared with less than NZ$50 for pulp grade wood.
Approximately two thirds of harvested logs are processed in New Zealand. The remainder are exported in log form.