Greens wary of foreign-owned 'wall of wood'
The Green Party is warning that a proposal to set up a forestry company for smaller growers will defeat its own purpose if it becomes controlled by foreigners.
The United Forestry Group (UFG), set up to help forest growers with fewer than 1000 hectares, is ultimately owned by Australian and Chinese interests, the party says.
UFG is aimed at New Zealand's "wall of wood", much of which is maturing on 500,000ha of small or steep landholdings.
It aims to assist about 1400 small growers who by themselves might struggle with the economics of harvesting and exporting.
Green Party forestry spokesman Steffan Browning said he welcomed UFG's co-operative approach but with most forests already being foreign-owned, he feared that the operation could end up controlled by foreign entities interested only in locking in unprocessed logs for one market - China.
Companies Office records show UFG is ultimately owned by a joint venture called Superpen, which is jointly by Timber Audits and Technology of Australia, and by a company linked to China's Xiangyu Group.
"It is a company, not a co-operative, and it plans to sell the logs to one market - China."
Browning also questioned the company's commitment to processing. "We should be processing the logs into finished products such as structural timber."
However, UFG said Companies Office records were in the process of being changed.
Acting managing director Malcolm McComb said 30 per cent of UFG would be owned by the three New Zealand directors and a residential 10 per cent was being held unissued for other New Zealand shareholders. "The ultimate aim is that it will be a New Zealand-dominated and controlled entity once the forest owners come in."
McComb also clarified that the company was not a co-op, and that forest owners could use its services without being a shareholder.
"It's not about the services really, it's about creating the scale amongst the forestry owners themselves so they effectively provide their own services."
As for having one market, he said China "at the moment is the dominant procurer of logs in this particular industry".
"That changes from time to time over the years, so we maintain a strategic view where we're optimising the value and minimising the risk, and that requires you to have a presence in all markets."
- The Dominion Post