Kiwi forest industry looks to China for investment

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New Zealand’s biggest ever forest industry delegation to China’s showcase Global Wood Trade Conference made the case for more investment in New Zealand forestry and timber processing.

Forest Owners Association President Peter Weir told delegates at Chongqing that more timber processing in New Zealand before export, reduced overall energy and carbon emissions required to produce and transport the finished product.

“There’s also a particular opportunity for primary processing of pruned logs in New Zealand, rather than the current approach of mixing quality logs with sap-degraded logs and a subsequent loss of value by both parties,” said Weir.

New Zealand Forestry Minister Shane Jones told the conference New Zealand was heavily reliant on access to foreign capital and also has a need to substantially increase its forest reserves.

That was behind the government creating a more streamlined process for investment in forestry using foreign capital, and created a special opportunity for those interested in working with New Zealand, he said.

“There’s also a particular opportunity for primary processing of pruned logs in New Zealand…” – Peter Weir, Forest Owners Association

Jones invited potential investors to consider connecting with the New Zealand industry representatives.

The invitation comes at a time when there is increasing concern in China with the implications of the US tariffs, with President Donald Trump recently announcing tariffs on $200 billion worth of products, on top of the $50 billion worth already taxed earlier this year.

If implemented, almost half of all Chinese imports into the US will soon face levies. The next wave of tariffs were scheduled to go into effect in late September, starting at 10 percent before climbing to 25 percent by January 1, 2019.

Numerous Chinese speakers at the conference referred to the trade war with the US and that they anticipated this would a long drawn-out battle.

Commentators at the conference believed the impact of increased US tariffs could cost China 1.5 percent of its GDP.

On the positive side, Weir said potential Chinese investors acknowledged the US trade problems were an opportunity to strengthen other trading partnerships and thus welcomed Jones’ comments.

New Zealand Forest growers and processors reported constructive engagement with members of the China Timber and Wood Products Distribution Association – the hosts of the Chongqing Conference.

The CTWPD has thousands of members across China and there has been interest from the Chinese members in both the opportunities to invest in forests and processing in New Zealand, as well as securing additional wood supply.

A number of the CTWPD group have expressed interest in a reciprocal visit to New Zealand later in the year to follow up on some of these options.

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