Why NZ’s wood processors are under stress

The closure of Whakatāne Mill has put the ailing wood processing industry in New Zealand back in the headlines, with calls for urgent steps to avoid more closures.

“This is a violation of our responsibility to future generations,” says David Turner, the executive director of Sequal, a wood processing factory in Kawerau that employs 80 people. He predicts more mills with specific business and product issues will close, “but the real issues are going to start to emerge in another five years or so”.

Turner explains to The Detail why the wood processing industry is under stress and why New Zealand continues to send so many raw logs to China without turning them into something more valuable. Forestry is our third biggest export, according to the Ministry for Primary Industries, earning more than NZ$6.7 billion a year.

Most of those exports are logs and between 70 and 80 percent of them go to China. Since 2008 log shipments to China have surged from 1 million tonnes a year to about 20 million this year. But at the same time, our value-add wood exports have stagnated. Turner says the Government has a “delusional idea that we’ll be able to attract foreign capital because the fundamental issue is lack of capital.

“There’s no lack of capital, there’s a lack of environment to make that capital efficient and successful.” Unlike the Whakatāne Mill, Turner’s Sequal plant just 33 kilometres away is “definitely not in distress. What I’d say is that there should be 10 businesses like Sequal in New Zealand, not just one.”

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Source: newshub