The Forest Processing Investment Environment

Chris Brown and German Ortiz

A Report prepared for
the Ministry of Agriculture and Forestry
by Forest Research

Technical Paper No: 01/05

ISSN - 1171-4662
ISBN - 0-478-07970-2

June 2001

Acknowledgements
Executive Summary

PART I PROCESSING INVESTMENT DRIVERS AND IMPACTS

Introduction
Patterns in forest ownership and wood processing
Opportunities in wood processing
Key factors influencing domestic and foreign investment
Review of key policies affecting forestry
Financial performance of the New Zealand forestry sector

PART II BENCHMARKING NEW ZEALAND COMPETITIVENESS

Introduction
Benchmarking New Zealand competitiveness with other major producers
Review of the investment environment in other major producing countries
Review of market risks and issues for New Zealand forest product exports

PART III POLICY INITIATIVES

Factors driving investment in other major producing countries
Major impediments to forest processing
Policy initiatives that may facilitate processing investment
Risks and impacts of policy adoption
List of References
Appendix 1: Review of competitiveness
Appendix 2: List of criteria used in the World Competitiveness Yearbook

Tables and Figures

Figures

Figure 1: Proportionate State and private ownership of planted forests in New Zealand
Figure 2: NZ planted forest ownership in 1989 and 1999
Figure 3: New Zealand production of sawn timber
Figure 4: Projected wood supplies by region (base cut scenario)
Figure 5: Electricity prices by sector (1979-1999)
Figure 6: Employment in forestry and first-stage processing by wood supply region in 1999
Figure 7: Share Performance Fletcher Forests
Figure 8: Share Performance Carter Holt Harvey
Figure 9: World competitiveness ranking for selected countries

Tables

Table 1: Sales of State-owned planted forests 1990-1996
Table 2: Estimated Maximum Practical Capacities for NZ Pulp and Paper Mills (1995)
Table 3: Estimated Fibreboard Production and Capacity by Mill
Table 4: Number of sawmills in New Zealand by capacity
Table 5: Overseas investment in forests and wood processing in New Zealand
Table 6: Estimated regional wood production and derived processing capacities in 2000
Table 7: Regional processing capacities and surplus wood production
Table 8: Regional log type outturns compared with processing capacity type
Table 9: Indicative rates of corporate taxation
Table 10: World Competitiveness Yearbook results for 2001 and converted index
Table 11: Evaluation of Forestry Factors (First Stage)
Table 12: Evaluation of Forestry Factors (Second Stage)
Table 13: Wood Processing Competitiveness Index
Table 14: Wood Processing Factors
Table 15: Final Results Wood Processing Competitiveness Index

PDF Version

Contact for Enquiries

Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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