Pulp And Paper Economics

Press, Volume CIII, Issue 30485, 6 July 1964, Page 10

Pulp And Paper Economics

The acquisition by N.Z. Forest Products, Ltd., of a shareholding in New Zealand Paper Mills, . Ltd., Mataura, does not improve the prospects of the establishment of a pulp and paper mill at Kaiapoi. It is nearly five years since the North Island firm announced its intention to build a mill in North Canterbury; and events have moved swiftly in the pulp and paper industry in that time. The industry has been delicensed, eliminating the possibility of a licensed monopoly for the production of pulp and paper in Canterbury. Paper Mills will soon become virtually a joint subsidiary of Forest Products and of Fletcher Holdings, which is a- major shareholder in Tasman Pulp and Paper. Whakatane Board Mills was taken over by Forest Products three years ago. To all intents and purposes, Forest Products and Tasman will control the entire production of pulp and paper throughout New Zealand in future. The third major development in the industry in recent years has been the destruction by gales of a large area of exotic timber in North Canterbury, which must raise serious doubts about the wisdom of investing heavily in a mill drawing supplies from forests in this area. Even before this, the economics of pulping South Island timber while much of the annual growth of exotic forests in the North Island was not used were open to question. In his annual report to shareholders in June of last year, the late Sir David Henry (chairman of Forest Products) said: “A forest policy has been evolved and is in operation “ which should provide the company . each year “ progressively with substantial additional logs until “ at least 1980, by which time the present annual “ crop should be doubled. Forest growth in your “ areas is most bountiful and- there is no natural “ reason to doubt that the company’s forest, policy “ for the future should continue along the new lines “ that now operate. We know of no cheaper way “ to secure substantial increased log supplies ... ”, Perhaps no cheaper way of supplying the pulp required at Mataura will be found than by supplying most of it, as at present, from the bountiful North Island production. If so, the chances of establishing a pulp and paper mill in North Canterbury will be slim indeed. . .