Forestry future ‘not all growth’

Press, 4 February 1982, Page 17

Forestry future ‘not all growth’

By

OLIVER RIDDELL

In 1980-81. forestry earned New Zealand $5BB million, or 10 per cent of its total export earnings; by the year 2000 forestry is expected to earn more than $lOOO million (in 1981 terms) overseas. For many reasons it is viewed as one of the safest and cheapest expanding industries in the country.

Yet. in spite of. or perhaps because of. the euphoria about the future of the industry expressed at the 1981 Forestry Conference, a forestry academic has grave doubts about the “rosiness" of this, future. He is Mr John Walker, senior lecturer in wood science and technology, at the School of Forestry at the University of Canterbury. Mr Walke'r says that he knows of no report which explores the economics of the forest sector step by step, identifying the areas of costs and profit; also, that there is an unhealthy ignorance among both farmers and foresters who are expected to generate growth in

the industry about its detailed economics.

New Zealand, he says, should not become mesmerised by clearwood. It is being led to believe that markets will exist for all the clearwood produced and that, since virgin forests are vanishinng at an alarming rate, a grateful world will queue up to buy New Zealand's clear radiata.

He does not query the wisdom of pruning; pruning widens the marketing options while not significantly increasing the total cost of the logs delivered at the mill over unpruned logs. Even so, there will still be large volumes of unpruned logs and considerable marketing efforts will be needed to quit all this industrial wood. Talk of the virtues of clearwood are high in faith

but ■ short on detail. Mr Walker says: talk. too. of a world timber shortage, of the inaccessibility of Siberian forests, and of the decline in available quality wood, is by itself not enough. Overseas price lists help, but what is needed is a far more detailed review’ with facts and figures of supply and demand, done region by region. The greater the value of the; product, whether through high price or scarcity, the greater the risk of substitution. It is the high-priced board grades that have suffered most competition; flooring, panelling, sarking. and furniture are the province of panel products today, and veneer and plastic overlays look real enough for most people. The markets of tomorrow’ will be very different from those of today.

About half the total world consumption of wood is still as a fuel for cooking in the Third World.

There is great scope for innovation and improvement in wood products which substitute for sawm timber,- but very little can be done to boost the quality (and' thus’ the marketability) of sawn clearwood — except to r the extent that more effective treatments are needed., to avoid yellowing of pine furniture and to harden the surface so that it marks less easily. ■ - The long-term trends' in product development / will probably reflect social and economic changes, Mr Walker says. Cost of labour has increased year by year.

forcing industries- to employ people more efficiently. The manufacture of reconstituted wood products, and pulp and paper, is suited to large-scale operation, continuous flow, automation, and standardisation. These products are technologically progressive materials suitable for aggressive marketing. In the short-term, he says, New Zealand may be facing a period during which energy and finance are relatively more costly, than labour, but hopefully that will not last long as'the situation would be the antithesis of prosperity. . Although a considerable revolution has taken place in the business world with the advent of the “marketing"

concept, this development has only very recently filtered through to foresters. "Marketing” focuses upon the needs of the consumer and adapts the production cycle to meet those needs, perhaps even Creating the need; “selling" is simply the seller’s need to cash in on their product as quickly as possible.

The seller has a “disposal mentality.” Forestry, with its traditionally heavy emphasis on the economics of silviculture and scant attention to the the complex needs of the market, is still in the “selling era" as shown by the structure of various institutions, such as the Forestry Research Institute and the School of Forestry. Mr Walker considers the absence of researchers and teachers with a thorough grounding in

the • principles of modern marketing is a serious deficiency’.

Many seem averse to market research, arguing that industry handles this quite capablv already. He rebuts this on three grounds: 1. Manv confuse the activity of selling with marketing. Market research is much more broadly based. The failure to match the Pinus contorta resource with the desired end use at Karori by Winstone Samsung Industries,t and the need to convince the Japanese that their ring-u-idth requirements are unduly restrictive on Pinus radiata for construction, both fall within this market research strategy. So does product and market identification and penetration. 2. Those who are involved in selling may nave no

formal qualification in marketing or related studies, and are reluctant to acknowledge the need for it. Is this satisfactory for New Zealand in the 1990 s and beyond? 3. Confidence is essential. The forest products industry relies to a significant degree on others to supply roundwood for processing. These suppliers need assurance that their resource will be processed as efficiently as possible so that sufficient earnings can be generated to support a profitable industry and pay an equitable price for the timber resource.

Mr Walker says that it is a “bit deflating” to be told at the 1981 Forestry Conference that on the one hand the forestry industries have a great future while on the other 'hand the forest growers were asking for subsidies. Subsidies and incentives such as the forestry industry has received do not engender confidence in the industry's long-term future.