New Zealand’s forestry industry could face a wave of closures without Government intervention, says the Red Stag boss, a major timber company in the country.
The Minister of Forestry Shane Jones has proposed a levy on exports to ensure logs went to New Zealanders first.
Red Stag Timber chief executive Marty Verry said while he expected a good uptake of activity in the New Zealand’s forest industry in the next two to three months, the end of the year and into 2021 is uncertain.
There were 60,000 people supported by the sector which could rise by 5000 if there was a push to buy local wood. He also said it could drop by 10,000.
He said there should be no restrictions on the industry once supply in New Zealand was met. He said five financial quarters of recession was forecast and Government intervention would be needed.
Without support, “we’re going to see a wave of closures or shifts”, he said, and a push to buy local logs for local projects could ease the uncertainty.
The minister would put forward a proposal of a levy on exported logs and a register of log-buyers.
The sector generated $6.8 billion revenue, 55 per cent of which was from international trade with China as a primary trading partner.
He said the forestry sector needed to expand in New Zealand creating a better range of products.
Jones said a reference group which was made up of ministers David Parker, Damien O’Connor, Eugenie Sage and James Shaw, had discussed options to incentivise trade of downstream processing to guarantee the delivery of adequate raw material to the local processing sector.
“I want to be absolutely explicit, the Government has no agenda to ban exports.”
He said the Government wanted forest owners to prioritise New Zealand needs and the downstream processing industry over selling raw logs internationally.
“A lot of owners of the forest believe it’s not their job to solve the unemployment woes or manufacturing management woes,” and prioritised maximising profit for their owners who were predominantly foreigners, he said.
The Forest Owners’ Association had told him about a predicted spike in international prices due to shortages overseas and were keen to take advantage of this.
Last Tuesday, parts of the forestry sector could began working again while others which supplied essential wood continued throughout lockdown.
Uptake of the Government’s wage subsidy had been high among the sector, Jones said.
Forestry sector businesses that can operate at alert level 3:
• Forestry management including aerial spraying, weed and pest management.
• Nursery operations, planting and seed collection.
• Log harvesting and haulage.
• Log sales.
• Wood processing.
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