April 16, 2020
Under-investment, not price crippling wood processors.
The head of one of the country’s largest forest management companies is warning the government needs to aim for the right target if it wants to boost local timber processing.
Minister Shane Jones has asked officials to explore law changes or regulations that would ensure wood products is prioritised for New Zealand-based projects after the COVID-19 lockdown, rather than be shipped overseas.
P F Olsen chief executive Te Kapunga Dewes says while the total log harvest over the past 20 years has fluctuated between 20 million and 35 million cubic metres, local demand has been steady at between 12 and 14 million cubic metres.
He says there is a long-standing lack of the capital investment needed to make local processing more efficient so it can pay higher prices for raw material.
Tinkering with the price by regulation won’t fix that.
“That will end up being at the expense of the forest owner who has waited 25 years for her investment to mature. Something like this will have the effect of reducing returns to forestry which will cause a reduction in supply which will cost real jobs in our industry,” Mr Dewes says.
He says the Government would be better off stimulating local demand by adopting a wood first policy for its buildings, rather than continuing to support the import of concrete and steel.
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