Forestry industry slipping

Fairfax

BAD TIMES: New Zealand's forestry sector is in bad shape, and getting worse, an expert says.

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An ailing New Zealand forestry sector is slipping further behind the international eight-ball, an organiser of a summit aimed at improving industry performance says.

"Over the last 10 years we've lost ground with our major competitors around the world," said Jon Dey, director of forestry consultancy Forme Consulting.

He is one of the organisers of the two-day Forestry Strategic Summit which kicks off in Rotorua today and aims to promote a collaborative approach to improving sector performance.

While a strong kiwi dollar and high shipping costs were making things tough, longer-term problems included a failure to keep pace with international harvesting techniques, lack of research & development (R&D) investment and maintaining a skilled workforce, Dey said.

Forme has estimated the New Zealand industry loses around $150 million through lack of efficiency, mainly in harvesting. "The industry here in New Zealand is quite isolated and is not aware of the degree of slippage that's happened. We've really lost a lot of ground."

Part of the problem was the industry structure in New Zealand with a large percentage of New Zealand forests owned by overseas funds, another set of companies that managed the forests as well as independent forestry contractors, Dey said.

"With so many people involved in the supply chain, it's difficult to get them all on the same page."

In R&D, New Zealand has gone from being one of the world leaders in harvesting research 15 years ago to losing much of its research capacity, Dey said.

A major aim of the summit was to help the local industry establish links with offshore harvest research institutes, he said.

Maintaining a skilled harvesting workforce was another big challenge, Dey said.

The volatility of log export markets led to reluctance by forestry companies to offer long-term harvesting contracts meaning contractors struggled to keep workers, he said. "You've got no investment stability from a contractor's perspective so they don't invest in new equipment."

A recent BERL survey, commissioned by the Forestry Industry Training and Education Council (Fitec), estimated the entire industry needed 4600 to 5000 new workers each year to 2011 to maintain current productivity levels.

Fitec chief executive Ian Boyd said that while the industry was getting by in recruiting enough staff the real challenge was getting people with the right skills. To help address the skill shortage Fitec had done a feasibility study on setting up an industry training school and was now starting to consult with government and the industry on the proposal, he said.

"The most appropriate model for us would probably be a government industry partnership although that's the sort of thing that we're getting into now."

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