Challenging Times Ahead for Critical Sector

5 May 2009

A report on the state of the forestry industry released today by the Ministry of Agriculture and Forestry (MAF) highlights the importance of the sector - but says there are challenges ahead.

In launching the report, MAF Deputy Director-General Policy, Paul Stocks highlighted the importance of forestry for New Zealand's economy and environment.

"Forestry provides economic returns of more than three percent gross domestic product, employment and economic benefits to New Zealand. Thirty percent of New Zealand is tree covered - 23% in the conservation estate and 7% in plantation forestry. The potential economic and environmental benefits of forestry are substantial.

"There are some exciting opportunities for the sector including new markets and improved prospects for solid wood, reduced harvesting costs, ongoing research in biomaterials and bioenergy, and new returns through non-timber services," he says.

"However, along with opportunities come challenges. Forestry is an industry with long run time frames (at least 25 years from planting to harvesting), significant capital investment requirements and infrastructure issues ranging from roading to energy. For example, the availability of wood will increase from 2010, potentially almost doubling from 2024 - this will pose significant challenges in terms of processing capacity.

"International economic development, climate change and the emphasis on forests as carbon sinks will also generate major changes for the industry over the next 20 years. Maximising the opportunities associated with these changes is one of the keys to sustained growth across the sector."

MAF's Forestry Sector Study is the most comprehensive to date on the state of the industry, the drivers for change and the nature of the challenges ahead. It identifies the current strengths and weaknesses of the commercial forest industries, and five key drivers that are likely to have significant and growing influence on the forestry sector in the next 20 years.

"By taking a step back and providing a broader view of the sector, we hope to support the sector in planning the way forward. I look forward to some robust debate across the sector on how we can maximise the potential and meet the challenges facing the forestry sector."

MAF's Forestry Sector Study report is the first in a series of sector studies aimed at fostering discussion and debate on the future direction of the primary industry sectors.

The report, and its companion Future Drivers for New Zealand Forestry, are available for download on the MAF website at www.maf.govt.nz/forestry/publications.

Media contact:

Deborah Gray, MAF Communications, Ph: 04 894 0715, Mb: 029 894 0715, dborah.gray@maf.govt.nz

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