The value of New Zealand radiata pine forestry as an investment is clear to corporate forest owners and international pension funds who own large areas of plantation forests in New Zealand. So it makes sense that New Zealanders have the opportunity to profit from forestry investment too.
Global market conditions favour wood and New Zealand’s competitive advantage puts forestry into the top three export earning sectors in the country. We are close to the Asian markets and we have excellent growth rates meaning we can supply quality radiata pine in shorter time frames. Our forestry exports are worth $5 billion to the New Zealand economy and this will grow. The industry is a big contributor to regional economies and its role is recognised in the government’s regional economic development action plans.
Global demand for wood alternatives is declining while demand for wood products is increasing. Population growth continues to increase demand for wood, and wood consumption increases further with a country’s increase in economic and social development. We see this in the ‘rising middle classes’ of China, India and Korea, our major export markets. With the global movement to preserve dwindling native forest resources, by either not logging at all or by logging on a sustainable basis, the trend is towards a log supply reduction and increased demand for plantation forest products.
The substitute products for solid wood like steel, aluminium, plastic and cement all have very high energy inputs and high carbon outputs. As the cost of energy increases and as carbon taxes are progressively introduced to limit climate change, inevitably the price for these substitutes will also increase.